DIPP’s proposal of 100% FDI awaits Cabinet's nod
The Dollar Business Bureau
The DIPP (Department of Industrial Policy and Promotion) is pressing ahead the demand for sanction of 100% FDI in the food processing sector in a bid to make the existing FDI policies simpler.
A proposal to the effect has been sent to the Cabinet which might give the go-ahead soon. However, DIPP is also waiting for an acknowledgement from the FIPB (Foreign Investment Promotion Board) to put it into action.
The proposal of DIPP has been drafted and forwarded to the cabinet for consideration, claim sources. And only food products produced and processed in India will be covered under the policy. The items produced in India are likely to have online sales business-to-consumer model after getting the FIPB nod. The sources claimed that the government will not put any caps on the foreign investors investing in the food industry.
The legalization of 100% FDI in the multi-brand food industry will indirectly benefit farmers, lower the wastage of vegetables and fruits, give a momentum to the sector and also generate employment.
During April 2014-December 2015, FDI rose by 40% to $29.44 billion. And as per data records of 2012-13, the food processing industry covers an extensive market segment and commanded a share of 9.8% in the GDP of manufacturing industry. It also contributed 13% of employment under the registered factory sector.
Earlier in 2013, the government had permitted 51% of FDI in the food processing sector of multi-brand retails, keeping 30% of domestic financing mandatory.
India was among the top six exporters of agricultural products in 2013.