FDI, Foreign Direct investment in the food processing sector has rose 24 percent in the financial year 2017-18 to $ 904.9 millions, states the official data. FDI inflow into the sector stood at $727.22 million during the financial years 2016-17.
The sector attracted FDI worth $505.88 million and $515.86 million in 2015-16 and 2014-15 respectively, the data showed. The government had in July last approved American e-commerce major Amazon’s proposed $500 million investment in retailing of food products in India.
At present, 100 percent FDI in food processing sector is allowed through automatic route. In the year 2016, the Centre has allowed 100 percent FDI through the approval route for retail trading, which also includes through e-commerce, in respect of food products produced and manufactured in India.
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Food Processing Minister Harsimrat Kaur Badal had in February this year said FDI in the sector could touch $1 billion in 2017-18. The sector would attract an investment of $14 billion over the next 2-3 years as committed by the domestic and foreign investors during the world food summit, she had said.
The World Food India 2017, organized by the ministry, attracted participation from 61 countries, 60 Global CEOs and more than 200 global companies. As per extant Policy, FDI up to 100%, under the automatic route, is allowed in food processing industries. Further, 100% FDI under Government route for retail trading, including through e-commerce, is permitted in respect of food products manufactured and/or produced in India.
The Government reviews FDI policy on an ongoing basis with a view to liberalize and simplify the FDI policy so as to provide ease of doing business in the country leading to larger FDI inflows. However, no such estimation or assessment is possible, as the FDI is largely a matter of private business decisions.
India is ranked to be second in the total food production and is also called as the largest producer of several agricultural commodities. The annual growth rate of the food processing sector is more than 7% and the online food delivery industry grew by 150% year on year in 2016.
With the largest diversified production base, India offers numerous opportunities that can be capitalized along the food value chain. Expect to grow with India’s flourishing economy, large workforce, strategic location, and the ease of doing business here.
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