Politically-sensitive multi-brand retail sector is likely to be opened for foreign investors with an FDI cap of 51 per cent, as efforts are being made by the industry ministry to evolve a consensus on the vexed issue. According to sources, the government will have to allow a minimum of 51 per cent foreign direct investment (FDI) in the multi-brand retail, the same as was permitted in single brand retail.

FDI in multi-brand retail below 51 per cent was not feasible, as it would lead to “arbitrage” opportunities, sources said. However, they did not elaborate on arbitrage opportunities.

Yesterday, Planning Commission Deputy Chairman Montek Singh Ahluwalia favoured opening up of the multi-brand retail sector to foreign investors, saying it will benefit farmers and also help in containing food inflation.

Food inflation fell to 15.52 per cent in the week ended January 8.

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