"Bharti's retail venture would be entirely owned by the Indian promoters," an official of the Department of Industrial Policy and Promotion (DIPP) said.
However, the US firm will provide technical know-how and training to the Bharti Group, which has announced its plans to open stores next year.
As per the present government policy, foreign direct investment is not permitted in retail trade except 51 per cent holding in single brand retailing. However, there is no restriction on foreign companies from undertaking wholesale cash and carry business.
In the cash and carry business, the company operates like a bulk dealer on behalf of several manufacturers and sells the merchandise to retail traders.
FDI in retail has been strongly opposed by Left parties, the key allies of the UPA Government. While the policy does not prohibit entry of big business houses like Reliance, Shoppers' Stop and Future Group into retail trading, they are also facing resistance, including in states like Uttar Pradesh.