Foreign direct investments would have to wait to open Indian multi-brand in retail business and for now they might have to focus on contemplating back-end operations development. This selective information for global retail giants came from commerce minister of India Anand Sharma in Davos.

As the government is currently allowing only 51% FDI in a single-brand retail venture however in wholesale cash-and-carry 100% is permitted. Under single-brand retail business, a store is allowed to stock goods of the same brand.

However, most foreign retailers use the wholesale cash-and-carry route and that these stores are only permitted to sell to entities such as provision stores and restaurants with restrictions on sale to individuals.

With the fear of a politically upsetting criticism from domestic provision stores constituency, that can strongly support the opposition party BJP, the government is contemplating opening the multi-brand business to foreign investment at present. This is a major factor that is stopping the government from giving a positive nod to FDI in retail business.

Although the issue is likely to be pursued further for discussion at the ministerial level soon, sources indicated that FDI in back-end operations including creation of warehouses and cold chains is a key factor.

It has been proposed that a minimum investment of Rs 500 crore is likely to be decisive in the decision-making process of the department of industrial policy and promotion with the comments having been referred to the relevant committee.