Addressing a seminar organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) on investment opportunities in West Bengal at the India International Trade Fair (IITF), Mr Nath said the government would have to decide whether the required investment in the retail sector should be domestic or foreign.
More investment has to flow into the retail sector to take care of the 25 million people coming into the middle class every year, but it has to be seen whether the investment should be domestic or foreign, he said.
The minister added that the government was studying the matter closely as had also Thailand faced serious problems with FDI in retail.
West Bengal chief minister Buddhadeb Bhattacharya said while his government was open to allowing FDI in areas like cold-storage and packaging, it was not yet ready to open retail sector for foreign direct investment.
There is a need for a very cautious approach because if big companies enter the retail sector, thousands of intermediaries will lose their jobs, he said.
On the issue of labour problems, Mr Bhattacharya said the government was trying its best to ensure peaceful industrial relations.
Mr Bhattacharya said his government valued FDI in the IT sector and said that irresponsible trade union activities will not be allowed in the area.
West Bengals commerce and industry minister Nirupam Sen said the states industrial policy envisages encouragement of FDI in focussed sectors that was mutually beneficial.