But it said investors would have to put in at least $100 million to set up multibrand retail stores and would only be allowed to operate in cities with at least one million people, the Press Trust of India said late Friday.

The proposal to more fully open up the Indian retail market, whose annual sales are estimated at around $450 billion, now must go to the federal cabinet for approval and then overcome widespread political opposition.

The move would mark one of the biggest reforms by India's Congress-led government. But analysts say it could be difficult for the embattled government to push through the major changes as it fends off a slew of corruption charges.

Multi-brand foreign groups such as US-based Walmart currently operate as wholesalers but cannot sell directly to the public, amid fears that big international retail chains could swamp small family-run stores.

India's tight foreign investment rules are aimed at protecting small "mom-and-pop" stores in the

AFP