Mumbai: Prime minister Manmohan Singh has directed the industry ministry to set up an independent experts group to undertake a comprehensive review of FDI policy in the retail sector.

The group, to be set up soon, would do a cost-benefit analysis of further opening up of the sector. It would be constituted soon, highly placed sources

Moreover, i n the wake of the controversy surrounding FDI in the retail sector, the government wants to study the implications of the policy on small players before arriving at a policy decision.

Commerce and industry minister Kamal Nath had indicated majority foreign shareholding in select multi-brand retailing in specialised categories of items such as electronics. A cabinet note has also been prepared on further opening of the retail market for stationery and construction material.

"You won't have to wait very long for changes in the FDI retailing policy to come through," Kamal Nath told reporters at the launch of the India Retail Report 2007. "We have been looking at various sectors that need both domestic and foreign investments. We are also in discussions with the prime minister on various aspects of FDI in the sector that would include single brand as well as specialised goods retailing like sports goods, electronics and stationery," he added.

However, as things stand now, the government would take a decision only after the experts group submits its report, sources said.

The terms of reference of the group would include an assessment of the possible impact of FDI in retail on economic growth, prices, small-scale retailers, vendors, farmers, consumers and manufacturers.

On the basis of the cost-benefit analysis, the group would make suggestions on the sectors that might be opened up.

The local kirana stores need to be better integrated with the organised retail industry to strengthen and benefit the consumers, if they are not to be wiped out. But to generate employment, the retail industry in the country will have to be better organized in the future.