Mumbai : Punjab and Gujarat have favoured foreign direct investment (FDI) in multi-brand retail in food items while many others have vehemently opposed the idea, a government official informed.

"Punjab has said FDI is necessary for economic growth. Some percentage of FDI should be allowed in retail business of food grains and vegetables as this will remove the middleman and help farmers get good prices," the official said.

Narendra Modi-led Gujarat government has also favoured the concept. According to the Gujarat government, FDI in multi-brand retail should be allowed but the small retailers should not be affected.

The consumer affairs ministry, which monitored retail businesses, had invited suggestions from states on allowing FDI in multi-brand retail.

"So far, 13 states have responded, of which only Punjab and Gujarat were in favour of allowing FDI in multi-brand retail in food grains and vegetables while Maharashtra, Andhra Pradesh, Tamil Nadu and Karnataka were yet to reply," the official said.

Earlier, a Parliamentary Standing Committee on Commerce had given a 11-point suggestion manual to the consumer affairs ministry on the retail sector. These included imposing a blanket ban on domestic corporate heavyweights and foreign retailers from entering into retailing of groceries, fruits and vegetables.

The other recommendations were setting up of a retail regulatory authority, the Shopping Mall Regulation Act, commissioned to study problems of retail sector, reservation policy for small and medium retail enterprises and financial assistance scheme for small retailers.