Business

India: Retail stocks fall after BJP says no to multi-brand FDI in manifesto

Retail stocks fell sharply on Monday after the BJP said it would not welcome foreign direct investment in multi-brand retail. In its 52-page election manifesto, the BJP said it would allow foreign direct investment wherever needed for job and asset creation - including in infrastructure.

On Monday morning, Future Retail traded 5% lower, while Titan declined 3%. Trent fell 1.8%. Kewal Kiran Clothing traded 1.3% lower. The broader Nifty traded 0.4% lower at the same time.

The UPA government opened India's US$ 500 billion retail industry to foreign investors in late 2012, allowing companies such as Wal-Mart Stores and Tesco to own a majority stake in local chains for the first time.

But the policy was pushed through in the teeth of fierce opposition from domestic retailers and political parties, who said it would cause mass job losses in a sector that is mostly dominated by small, family run shops. Moreover, strict sourcing norms and a requirement that companies must ask permission from local state governments before opening stores have made most supermarket giants wary.