An executive decision by India’s cabinet to ease laws on foreign direct investment (FDI) in the country’s retail market was met with opposition from large sections of the parliament.

Under the decision, announced yesterday (24 November), foreign companies can now own 51% of multi-brand retail stores. Previously, major retailers like Wal-Mart Stores, Tesco and Metro could only sell wholesale in India.

Discover B2B Marketing That Performs

Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.

Find out more

However, opposition groups, and even some key government allies, were furious at the decision, claiming it will force smaller retailers out of business and hit prices paid to farmers. As the ruling was made by the cabinet, it did not to go to a parliamentary vote.

In a press conference yesterday, commerce minister Anand Sharma said 10m jobs will be created over the next three years and prices will be reduced as a result of the reforms.

The legislation contained a number of conditions for foreign retailers that invest in India. They must invest at least US$100m, half of which must be spent on infrastructure. Companies will also be forced to buy 30% of produce from small and medium enterprises and are only able to establish stores in cities with a population of one million people or more.

As India is a federal country, individual states will have to give their consent to allow foreign companies to open stores, which may prove a problem for states controlled by parties opposing FDI.

GlobalData Strategic Intelligence

US Tariffs are shifting - will you react or anticipate?

Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.

By GlobalData

Just Food Excellence Awards - The Benefits of Entering

Gain the recognition you deserve! The Just Food Excellence Awards celebrate innovation, leadership, and impact. By entering, you showcase your achievements, elevate your industry profile, and position yourself among top leaders driving food industry advancements. Don’t miss your chance to stand out—submit your entry today!

Nominate Now