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FDI in Food Retail will be a Game Changer: Badal
24 July 2017

Relaxed norms for FDI in food retail along with the Rs.6,000 crore SAMPADA food processing scheme that the Cabinet approved recently will be a game changer for the sector, says Food Processing Minister Harsimrat Kaur Badal. She expects a decision on allowing foreign food retailers to sell personal care products well before the gathering of global firms at the World Food Fair in November. The minister expects foreign investment of $10-15 billion in the sector to be on the ground in a couple of years. She is also seeking a new financial institution for the sector. “The government is looking at issues from machine manufacturers, technology people, reefer (refrigerated) van people and food processors. Once the issues are consolidated, we will sit down and brainstorm and see what is the outcome,” she said. “We are working towards creating a food processing bank or a special fund. Rabo Bank and Yes Bank have proposed it. There needs to be something which lends out to agriculture and infrastructure for food processing as well, because the way multibrand retail will come, it will zoom and there will suddenly be a huge demand. If there is a separate bank or authority that just focuses on this sector like National Bank for Agriculture and Rural Development (NABARD), it will be good. “Amazon is going to invest Rs.3,500 crore in the next three years. This is for the first time that Amazon is moving towards brick-and-mortar. It says a lot. So, e-commerce has already decided to go ahead. Don’t be surprised if there is a quantum jump. With the government already thinking of relaxing norms on home care products, I think we can’t even imagine how it will change the things. The home care products will be manufactured in India only.” This SAMPADA scheme alone, with an allocation of Rs.6,000 crore, is expected to leverage investment of Rs.31,400 crore, handling of 334 lakh MT agro-produce valuing Rs.1,04,125 crore, will create 6.5 lakh jobs. This will directly and indirectly benefit at least 20 lakh farmers. “In this scheme, we will work towards changing the mindset of farmers. There is going to be an agency that will map clusters. They will let us know that if there are clusters made by farmer’s producer organisations (FPO) and the sort of infrastructure required in that region.” Badal adds, “Through the Sampada scheme, we will start from the farm where these FPOs will hopefully be linked to not only cold chains but also to mega food parks. I am creating that seamless grid from production to consumption. Somewhere, I think, we need a council or something, which is a national food grid development body, for which we will be thinking to bring in a Bill and work towards that once the World Food Fair is over and the SAMPADA scheme progresses. It will converge all the ministries and states and Centre like the National Highways Authority. It will plan the future, mapping what is there, creating a 20-year road map where the country is heading, what are the issues, what needs to be done.” The main focus of the Government is to stop wastage. The infrastructure gaps will be compressed, so as to ensure that 50% more food is available. In perishables, around 62 million metric tons is currently getting processed. In the SAMPADA scheme, the Government envisages creation of capacity to process another 33 million metric tons, which means an additional 50% processing of perishables.

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