The government retained the 49 percent foreign equity cap in commodity exchanges but made the route automatic to help bring more investment and make the existing exchanges more competitive.
Commerce Minister Anand Sharma announced the decision after Prime Minister Manmohan Singh reviewed foreign direct investment in several sectors.
Earlier, FDI in commodity exchanges needed an approval from the the Foreign Investment Promotion Board (FIPB). "No FIPB approval would be required now," said an official.
