The managing director of India's leading department store retailer, Shoppers Stop Ltd, has described the government's move to allow more overseas investment in the sector as "a good starting point."

Speaking today (26 September) at the IAF World Apparel Convention in Portugal, Govind Shrikhande, customer care associate and managing director, said the government's decision to allow overseas investors to own 51% of multi-brand retail outlets "is not going to change the life of India in the short term."

He added: "FDI (foreign direct investment) in India is a good starting point, but I don't see a lot of brands waiting out there who want to enter India immediately."

Among the conditions placed on overseas retailers is that they will have to procure 30% of their merchandise domestically from Indian small businesses.

Foreign retailers cannot start e-commerce operations; an investor must spend at least US$100m, half of which must be spent on back-end infrastructure; and stores can only be set up in cities of at least one million people, although states in favour of reform without cities of that size can open multi-brand outlets in locations of their choice.

Another condition states that stores can only open in those states that have agreed to allow FDI in multi-brand retail.

Shrikhande points out there are 30 states in India, "and each state is like a country, so it's not a big issue, it's more like testing the market."

"I believe these are not really very tough conditions," he says, adding: "Investing in India will generate a lot of jobs.

"We welcome FDI and we will look at whether we need partnerships in one or two formats."

Shoppers Stop operates 50 stores and has also introduced new formats like HomeStop, which sells home furnishings, and HyperCity, a "premium shopping destination" that sells a range of products including food, homeware, home entertainment and fashion.