Worried over rising food inflation, Assocham today suggested that the government should consider early opening of retail sector for foreign investors to bridge demand-supply gap. "The prevailing restrictions in FDI in retail chains should be reviewed as such ventures (setting up retail stores) require large capital and considerable expertise," it said.

It said that though large business houses are taking initiatives to set up retail stores and are eager to invest in supply chains and storages "provided government makes suitable changes in agricultural marketing laws and enables them to invite foreign direct investors in their ventures". The promoters of the chains, it said, would invest in huge retail stores and storage facilities after picking up the products from centres near the farms. "Assocham demands an early policy announcement," it said adding delivery of farm produce to sell at throwaway prices.

The government is considering to liberalise the politically sensitive multi-brand retail sector for FDI. A committee, which has evaluated the comments of stakeholders on the issue has submitted its report to the industry ministry. It said that healthy supply chain connecting farmers and consumers will benefit both and in turn help in cooling food prices. For the week ended December 18, food inflation rose to 14.44 per cent. Currently, the government permits 51 per cent FDI in single brand retail and 100 per cent in whole sale trading. But FDI is prohibited in the multi-brand retail.