FDI in food processing sector down 31% at $ 628.24 million in 2018-19

The foreign direct investment (FDI) in the food processing sector fell by 31 per cent in 2018-19 to $ 628.24 million, the government told the Lok Sabha on Tuesday. FDI inflow into the sector stood at $904.90 million during 2017-18 financial year.

The sector attracted FDI worth $ 727.22 million in 2016-17, said Food processing minister Harsimrat Kaur Badal in a written reply to a question in the lower house of Parliament.

Singh also said that as per annual survey of industries (ASI), the invested capital in the registered Food Processing sector, by 2014-15, 2015-16 and 2016-17 are in the order of Rs 3,68,433.71 crore; Rs 3,86,339.38 crore and Rs 4,17,690.89 crore. Further, as per the latest available data under the ASI, the total number of persons engaged in registered food processing units by 2014-15, 2015-16 and 2016-17 were 17.73 lakhs, 17.65 lakhs and 18.54 lakhs respectively.

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. India opened food retail for foreign investment in 2016. A year later, Amazon sought to invest $500 million, but the government wanted it to separate warehouses, logistics and inventories for the food-only venture from those of its online marketplace in India.

Food processing minister Harsimrat Kaur Badal in March this year had said that over 30 companies have started working on their projects with investments of around $11 billion out of $14 billion they had proposed. She listed out investments into wholesale retailing Metro Cash & Carry and Thailand’s Siam Makro as part of the $11 billion mega investments into India.

The minister had said that FDI in food processing has nearly doubled from $500 million to $905 million during her tenure. Coca-Cola, Britannia, Cargill, Tilda Hain are investing in the country, she had informed adding that the major sectors that have attracted FDI were food retail, dairy, grains, fruits and vegetables, animal feeds and oil .

The food processing sector is annually seeing a growth of more than 11%. Despite a huge domestic market of 1.3 billion customers with the youngest population globally and an abundant agricultural base, the processing levels in India remain low at 7.7% behind several economies such as China, Malaysia and US, according to the ministry data. India’s share in global exports of processed food is only 2%. Besides, India also has a high share of harvest and post-harvest losses from major agricultural produces on account of poor storage, transportation and logistics to the extent of Rs 92,651 crores,according to government data.

Source:-https://retail.economictimes.indiatimes.com/news/food-entertainment/grocery/fdi-in-food-processing-sector-down-31-at-628-24-million-in-2018-19/70260655