India opens door to foreign supermarket chains

India threw open its $450 billion retail market to global supermarket giants on Thursday, approving its biggest reform in years that may boost sorely needed investment in Asia's third-largest economy.

Trade Minister Anand Sharma said on Friday that the government's new policy to allow foreign supermarkets into the country would create 10 million jobs over three years, while not affecting smaller, domestic retailers.

The world's largest retail group, Wal-Mart Stores Inc, and its rivals see India's retail sector as one of the last frontier markets, where a burgeoning middle-class still shops at local, family-owned merchants.

Allowing foreign retailers to take stakes of up to 51 percent in supermarkets would attract much needed capital from abroad and ultimately help unclog supply bottlenecks that have kept inflation stubbornly close to a double-digit clip.

Wal-Mart hailed the decision, but said it would take a close look at the fine print to see what the decision entails for its ability to do business in India.