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Jul 23, 2012, 01.40 PM IST
Shares in Indian retailers fell on media reports government coalition members Samajwadi Party and leftist parties have opposed allowing foreign direct investment into multi-brand retail outlets.
Leaders from these parties have written to Prime Minister Manmohan Singh expressing their opposition, according to newspapers report on Monday.
However, sources told CNBC-TV18 that the government on notifying FDI in retail. The commerce minister will reach out to the UP CM for support and all efforts will be made to gather support.
Sources say FDI in retail doesn’t require Parliament or cabinet nod. It will be operationalised through notification and states will have the final authority to give licenses.
Shares in Pantaloon Retail fell 5.2%. India's top retailer had surged 26.4% since the end of May to Friday's close, far outperforming Nifty's 6.5% gain, on hopes the government would open up the retail sector.
Shoppers Stop, which operates the Hypercity retail chain, loses 4.1% after gaining 19.9% during the same period.
India last year scrapped plans to allow up to 51% foreign ownership of multi-brand retail because of political opposition.
Investors had seen retail FDI as one of the key reform measures being considered by the government after the presidential elections.
(With inputs from Reuters)
May 22 2013, 11:25
- in FII View
May 22 2013, 10:44
- in Economy