Govt allows 100% FDI in trading of food products

THE government on Monday allowed 100% foreign direct investment (FDI) in trading of food products, including through e-commerce, to provide a boost to the country’s food processing sector.

The decision was take nat a meeting chaired by Prime Minister Narendra Modi. “It has now been decided to permit 100% FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India,” an official statement said.

The government had in the Budget this year announced that 100% FDI would be allowed through FIPB route in marketing of food products produced and manufactured in India. Department of Industrial Policy and Promotion (DI PP) secretary Ram es hAbh is hek said 100% FDI has been allowed in marketing of food products without any condition.

Food processing minister Harsimrat Kaur Badal had earlier demanded that foreign players looking to invest in the sector should mandatorily invest a portion of their investments in building infrastructure at the farm gate level. The minister was pitching for a condition that 25% of the foreign inflows should be invested in creating agri infrastructure.

The food processing sector has attracted $5,285.66 million FDI during April 2012 to December 2015 period. Bad al had recently said the foreign direct investment in the food processing sector could cross $1 billion in the next two years, helped by reforms in FDI space and stream lining of regulations by food safety regulator FSSAI.

The government is making efforts to double the food processing level of fruits and vegetables, which currently stands at only 10%. “Price fluctuation in vegetables like tomato can be controlled effectively if we strengthen entire chain of food processing,” minister of state for agriculture Sanjeev Balyan said. PTI