The Cabinet headed by Prime Minister Manmohan Singh cleared the decision at a meeting this evening, a Union minister, who asked not to be identified, said here.
For single-brand retail, the Cabinet decided that any firm seeking waiver of the mandatory 30 per cent local sourcing norms would have to set up a manufacturing facility in the country, the minister added.
In November last year, the government had approved 51 per cent FDI in multi-brand. This was, however, put on hold due to political opposition, including from UPA constituent Trinamool Congress.
The minister said since the implementation of the decision was put on hold, it had to go to the Cabinet again before going ahead with the decision.