India to relax FDI regulations in food processing sector

October 5, 2018

NEW DELHI – India’s Government is expected to announce a decision soon to relax foreign direct investment (FDI) regulations to boost the food processing sector, which has attracted already US$8.7 billion in foreign investment.

A senior Government official said: “We are in the process of removing bottlenecks as we see huge FDI investment potential in this sector.”

Confirmation that the Government will relax FDI regulations came from India’s Ministry of Commerce and Industry DIPP Joint Secretary, Rajiv Aggarwal, who spoke to the Press Trust of India on the sidelines of World of Food India conference.

MNCs and investors were facing some hurdles, which had now been removed in terms of modifications and harmonisation, he said.

At present, 100% FDI in the food processing sector is allowed in setting up a manufacturing unit, and no permission required to conduct a wholesale business in the sector either, Aggarwal said.

India’s Financial Express newspaper reported that the proposed policy would encompass the use of new technologies, such as artificial intelligence and IoT to open new avenues for investment in India.

“We need technology and investment in the supply chain mechanism,” Aggarwal said, adding that the industry faces huge wastages from farm to table.

“We only process 7% of perishable goods compared to 65% in the US, 23% in China and 78% in Phillipines.” (ATI).