Future Retail drops on FDI rules clarification

MUMBAI (Reuters) - Shares in Future Retail Ltd fell as much as 3.4 percent on Friday after the government said foreign supermarkets entering India must invest in new supply infrastructure, rather than buying existing assets.

The government clarification issued on Thursday was seen reducing prospects that foreign supermarket operators such as Wal-Mart Store Inc , Carrefour , or Tesco would buy into Indian companies or their assets.

The government allowed global supermarket operators to enter India in September.

Future Retail shares were down 2.3 percent as of 9:21 a.m, compared to a 0.2 percent fall in the broader Nifty.

(Reporting by Abhishek Vishnoi and Rafael Nam; Editing by Supriya Kurane)