Considering the political sensitivity over full-scale opening of foreign direct investment in multi-brand retail, the government should initially allow only 49 per cent foreign investment, according to Bharti Walmart.

In its comment on the industry department's discussion paper on foreign direct investment in multi-brand retail, the joint venture between Bharti Enterprises and Walmart, said though 100 per cent foreign direct investment should be allowed in the sector, it would endorse a calibrated opening.

"Bharti Walmart recognises. . .the political sensitivity around the retail sector. Recognising the government's stand to adopt a calibrated approach, we would endorse a position where as a first step, multi-brand retail is opened up at 49 per cent," the company said.

"Should the government pursue this option, there should be a clear path towards 100 per cent FDI in near future," it said, adding foreign investment without any restrictions would create the conditions for the greatest flow of investment to the back-end with related benefit for farmers, small businesses and consumers.

The government has taken a tentative step to open the sector, which employs 34 million people, to global players with the Department of Industrial Policy and Promotion releasing a discussion paper on the issue.

As per estimates, India loses fruits and vegetables worth thousands of crores of rupees annually due to lack of proper cold chains and back-end infrastructure. Bharti Walmart runs wholesale cash and carry stores in India under the 'Best Price Modern Wholesale' brand.

On the DIPP's query of who should be allowed to bring in FDI in the sector, Bharti-Walmart said it was 'fairly easy' to identify genuine global players. However, "in case a mandate is absolutely necessary, a minimum threshold limit of $100 million be fixed for the food category," it said.

The joint venture firm also suggested that global players entering the sector should source more than 50 per cent of their goods locally to develop India's industry.

It also favoured that FDI in retail should be permitted in the 200 cities with a population of more than 200,000 and not only in cities with about 40 lakh (4 million) population.