New Delhi: In a landmark move, the Union Cabinet has allowed 100% Foreign Direct Investment (FDI) via automatic route in single-brand retail.
It may be noted that the current FDI, under automatic route in single brand retail in was at 49 percent, and government approval is required beyond the limit.
However, the Cabinet on Wednesday reviewed the clause and decided to increase FDI to 100 percent in a move to attract more investments.
The FDI during the April-September quarter this fiscal registered a growth of 17 percent ($25.35 billion), while FDI into India increased 9 percent to $43.48 billion in 2016-17.
Impact on share market
Soon after the decision, the share markets witnessed mixed reactions, reported The Economic Times.
It may be noted that shares of Soril Infra Resources, RCL Retail, Shoppers Stop, Principal Pharmaceuticals and many others surged, while shares of several other companies such as TAAZAINT. REI SIX TEN Retail, Koutons, Provogue (India), and Aditya Birla Fashion and Retail went downhill. However, most of the retail sector stocks were trading higher as a result of the approval.