Global retail majors including Walmart have expressed interesti n investing in India’s food retail sector that was thrown open to foreign direct investment in June. One of Brazil’s largest poultry firms is also learnt to be in talks with Kishore Biyani’s Future Group to set up shop in the country, food processing secretary Avinash Srivastava said.
Brazil has some of the world’s biggest meat processing companies, including JBS S.A. and BRF. Srivastava added, “Several companies such as Pepsi, Coke are tying up with the farmers for the supply of fruits and potatoes. We will provide all assistance to them.” Ramesh Abhishek, secretary of department of industrial policy and promotion (DIPP), said $1.04 billion of FDI infl ows have come to the country from April 2014 to March 2016 from companies including Kellogg, Ferrero India and Mars International. Greater food processing is part of the government’s strategy to double farmers’ incomes by 2022. It expects 100 new cold chains to come up with investment of nearly `3,000 crore. The government is hopeful that investments from Walmart will help build the required infrastructure in the food processing sector. Walmart was one of the companies whose views were sought at the time of drafting the recent changes to the FDI policy in the food processing sector. The company is keen to sell food products directly to Indian consumers through brick-and-mortar and online stores. The country is offering fiscal incentives such as 100% income tax exemption for the first five years of operation and 25% thereafter for the next fi ve years to food processing units. The ministry is also inviting expression of interest for six new food parks where preference would be given to companies which have 26% foreign equity. According to government data, with the addition of 32 lakh capacity of cold storage created with an investment of `9,000 crore, India has managed to reduce wastage by 10% per annum.
(Source: The Economic Times, Mumbai, August 18, 2016)