Wal-Mart Stores (WMT) CEO Michael Duke said he is "optimistic" that foreign companies will be allowed to invest in the Indian retail sector.

Wal-Mart is hoping that India's government will loosen restrictions on foreign investment after the trade ministry invited views from the industry, Bloomberg News said.

"The opening of dialogue the ministry has initiated is very productive, and I view that as progress," Duke said at a press conference in New Delhi Monday.

Currently, overseas can only invest in single-brand retail or wholesale operations.

Loosening the foreign investment rules would help curb inflation and may create 3 million jobs, Duke said today.

India's growing economy and expanding middle class will help increase the country's retail sales by 35% in three years, consultancy AT Kearney said.

AT Kearney ranks India as the third-most attractive market for global retailers among the 30 largest emerging markets.

Duke is currently in India to meet with government officials and visit wholesale stores that Wal-Mart operates with Indian company Bharti Enterprises.