Flipkart proposal for entering food retail rejected

New Delhi, June 1: The Department for Promotion of Industry and Internal Trade (DPIIT) has rejected Walmart-backed Flipkart's proposal seeking approval for entry to the food retail sector citing a regulatory issue, an official said on Monday.

The government permits 100 per cent foreign direct investment in food retail for food produced and manufactured in India.

Last year, the company had set up a new local entity—Flipkart Farmermart—to focus on food retail in India, and had applied for requisite licences from the government.

Flipkart group CEO Kalyan Krishnamurthy, at that time had said that the move an important part of the company's efforts to boost Indian agriculture as well as food processing industry in the country.

"Yes, the department has rejected the proposal," the government official said.

Commenting on the development, a company spokesperson said that Flipkart intends to reapply for the permit.

“At Flipkart, we believe that technology and innovation driven marketplace can add significant value to our country's farmers and food processing sector by bringing value chain efficiency and transparency. This will further aid boosting farmers' income and transform Indian agriculture. We are evaluating the department's response and intend to re-apply as we look to continue making significant impact on small businesses and communities in India," the spokesperson said.

Interestingly, Amazon had received the government's nod for its $500 million investment proposal for retailing of food products in India in 2017.

Thr grocery segment accounts for a significant portion of the unorganised retail segment in the country. The market is worth over $200 billion.

—PTI

Market cheered lockdown easing and timely advance of monsoon rains in Kerala with more than 2.5 per cent gain for Sensex and Nifty-50.

After a firm start on positive Asian markets cues, the Sensex rallied 1250 points intra-day touching a high of 33,673 but due to profit taking, the benchmark index finally closed 879.42 points up at 33303.52. The broader Nifty-50 index closed at 9826.15 up 245.85 points or 2.57 per cent.

Monsoon rains this year are expected to be 102 per cent of the long period average rainfall , 2 per cent more rainfall than what was assumed during the month of April, as per revised June 1 forecast by Indian Meterological Department.

"The prevailing and predicted conditions (sea surface temperature) over the Pacific and Indian Oceans are favourable for a normal monsoon season," IMD said in a statement.

With lockdown easing in phases from June 1, the consumer focused sector stocks rallied led by financials, consumer durables and FMCG names.

The cheer in market was seen in even mid-cap and small-cap stocks as BSE Mid-cap index gained 2.65 per cent and BSE Smallcap index gained 3.03 per cent.

Siddhartha Khemka, head-retail research, Motilal Oswal Financial Services, said, "Investors ignored the weak GDP data for the March quarter as well as muted factory activity for the month of May and cheered phased out opening of economy. 'Unlock-1' will be initiated in India from June 8.”

Foreign portfolio investors bought shares worth Rs 1,575.46 crore on Monday as per provisional data while the domestic institutions were net sellers by Rs 459.25 crore.