The government is understood to have approached the National Agricultural Co-operative Marketing Federation of India (Nafed) asking it to join it in the venture.
A source close to the Indian government said: “It has been established that a co-operative model is best suited to sustain a retail venture. Thus, the government thinks that Nafed would be an ideal agency to carry the proposal forward.
“Farmers have been dealing with Nafed for 50 years. Getting Nafed to start the retail chain would mean a win-win situation for farmers and consumers. They already have a retail operation – it is just a matter of expanding on it.”
Last month, thousands of farmers and shopkeepers took to Mumbai’s streets to protest against the threat of organised retail to the country’s traditional retail model, which is characterised by thousands of small, unbranded stores.
Nafed, which has 13 retail stores under the Nafed Bazaar fascia as well as established supply chain links, is said to be cautious about the proposal. Sources said Nafed would not be able to match the competition from the likes of Indian retail giant Reliance, nor afford high real estate prices.
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