New Delhi: The Union government is contemplating on giving a nod to the Foreign Direct Investment (FDI) in the multi-brand retail sector. The proposed move would allow foreign retail giants like Walmart and Carrefour to make way in the Indian market through joint ventures for multi-brand stores.

If things augur well, stores of some prominent international retailers would be opened in major cities like Lucknow, Kanpur, Ranchi, Patna, Amritsar, Noida and Gurgaon.

Government is giving a serious thought to permit the entry of foreign retail companies on conditional grounds. A major condition is that in the initial phase, stores would be opened in 36 cities which have a population in excess of 10 lakh each. Meanwhile, the percentage of equity to be held by the foreign companies has yet not been decided.

According to the sources, Prime Minister Office (PMO) has passed orders that the issue of entry of foreign retailers in Indian market should not be prolonged any further. A decline in the FDI in the last financial year 2010-11, is being regarded as a major reason behind the orders issued by PMO. Apart from it, the Central government has been under pressure from the US to allow FDI in multi-brand retail sector.

During his visit to India, US President Barack Obama has asked the Union government to approve the entry of foreign retail companies in the Indian market. Similar requests have also been made by France and England.

The government currently allows 51 per cent FDI in single-brand retail sector. Whereas, the entry of foreign retailers in multi-retail sector is still not permitted in the Indian market.  India allows 100 percent FDI in cash-and-carry operations. Department of Industrial Policy and Promotion had prepared a draft in this regard in November 2009.