The government will not allow foreign companies to operate in multi-brand segment and necessary action will be taken against people indulging in predatory pricing, Commerce and Industry Minister said Wednesday.

The minister said this in a meeting with representatives of associations of kirana stores, traders and retailers in Delhi.

He "reiterated that will not allow multi-brand retail by foreign companies and on the pretext of B2B (business-to-business) no entry will be allowed for multi-brand retail," the ministry said in a statement.

Goyal also "asserted that will not be allowed and necessary action will be taken against defaulters," the statement said.

He asked all the participants to send their suggestions on the draft policy in the next five days.

The policy will be finalised only after taking into account every suggestion received by the Department for Promotion of Industry and Internal Trade (DPIIT), the minister said.

Goyal also asked the traders to use government and MUDRA scheme to promote their business.

Representatives of the associations of kirana stores, traders and retailers discussed the need for a level playing field and the impact of anti-competitive practices like and other discriminatory methods that are being faced by them from foreign

In a separate statement, Confederation of All Traders (CAIT), which attended the meeting, demanded early formulation of policy.

"A regulatory authority should be constituted to regulate and monitor the business with adequate powers to penalise or take action against entity which violates the policy," it said.

CAIT Secretary General Praveen Khandelwal also said that it needs to be be ensured that all kinds of malpractices, including and deep discounts by e-retailers should be stopped.

According to FDI policy, permits foreign direct investment in the multi-brand retail sector with a cap of 51 per cent ownership by overseas players.