The Shiromani Akali Dal (SAD) is an important ally of the National Democratic Front (NDA), which has been strongly opposing foreign investment in the multi-brand retail sector.
In a letter to Indian Commerce and Industry Minister Anand Sharma Thursday, Badal said: "We strongly believe that opening FDI in multi-brand retail will bring in the expertise, experience and resources of foreign retailers."
"A major beneficiary of back-end investments would be farmers, who will gain substantially through agricultural best-practices of international retail companies, thus improving the quality and quantity of their yield, and will also get better remuneration," the letter said.
Investments in supply chain infrastructure and stores would also generate hundreds of thousands of employment opportunities for rural and urban youth, it said, adding that an efficient supply chain will also help decrease inflation.
"Considering these benefits, I offer my complete support to you and your government for taking this major step that will benefit millions of farmers and youth in our state," Badal said in his letter.
Thursday, the Indian Cabinet decided to allow 51 per cent FDI in multi-brand retail sector, as well as remove the 51 per cent cap on foreign direct investment in single-brand retail.
Recently, senior Bharatiya Janata Party (BJP) leader Murli Manohar Joshi had said: "We are opposed to FDI in retail market as it will... kill all small traders and farmers in the long run. BJP will oppose it in Parliament and outside."