The Delhi government is understood to have withdrawn approval to foreign direct investment in multi-brand retail, saying it may hinder foreign investments flowing into the country.

According to the Economic Times, the Aam Aadmi Party-headed government has written to the Department of Industrial Policy and Promotion (DIPP) seeking to withdraw its permission to allow FDI in multi-brand retail in the state.

The news comes just 15 months after the policy change and one month since the state received its first investment proposal.

The measure allowing foreign retailers to own 51% of multi-brand retail outlets was brought in in 2012. The Indian government then eased restrictions on foreign investment into the multi-brand retail sector in August last year - nearly a year after initial reforms were introduced.

Conditions included the power for individual states to block the opening of multi-brand outlets.