Govt allows FDI in multi-brand retail, aviation

India opened its supermarket sector to foreign chains on Friday after months of dithering, pushing ahead with the boldest reforms yet in Prime Minister Manmohan Singh's government as it tries to revive the country's tottering economic growth.

The government has decided to allow foreign airlines to buy stakes of up to 49 per cent in local carriers, heavy industries minister Praful Patel said on Friday, in a much-awaited policy move that provides a potential lifeline to the country's debt-laden airlines by opening up a fresh source of funding.

The move allows global firms such as Wal-Mart Stores to set up shop with a local partner and sell directly to consumers for the first time, which supporters say could transform India's $450 billion retail market and tame inflation.