At present, foreign direct investment is not allowed in the multi-brand retail sector, which is dominated by neighbourhood kirana stores making it a politically sensitive topic.
"Policies are not cast in stones. Once they are made, they keep on evolving, responding to the emerging scenario," Commerce and Industry Minister Anand Sharma told reporters in New Delhi.
Under his charge, the Department of Industrial Policy and Promotion (DIPP), would soon float concept papers on the policy changes for FDI in retail as also other sectors like defence and agriculture.
Expressing concern over high food prices, Prime Minister Manmohan Singh had recently suggested whether a FDI policy change was required in sectors like retail to narrow the gap between the consumer and farm gate prices.
"We need greater competition and therefore need to take a firm view on opening up of the retail trade," the prime minister had said recently.
In defence production, foreign investors can have stakes up to 26 per cent in Indian joint ventures while FDI is not allowed in most of the agri-related areas.
Sharma said the DIPP, the nodal agency for FDI policy, has started a process which is 'inclusive and democratic'.
He said consultations with stakeholders on the new manufacturing policy which proposes flexibility to the industry for hire and fire in special industrial zones, are almost complete.
Since FDI is not permitted in the multi-brand retail, some of the global majors like Wal-Mart and Metro have opened cash and carry (wholesale) stores where 100 per cent overseas investment is allowed.