FDI in India’s Food Processing Sector Accelerates

July 27, 2017

2 Min Read
FDI in India’s Food Processing Sector Accelerates
FDI is growing in India's food processing industry. Image courtesy of Flickr user sanyambahga

Foreign direct investment in India’s food processing sector reached $727 million in the 2016-2017 fiscal year, representing a 40% jump over the previous year, Union Minister of Food Processing Industries Harsimrat Kaur Badal said at an event in Hyderabad on Thursday.

$183 million was invested in the past two months alone. The Indian government recently committed Rs 6000 crore to supporting the development of 42 mega food park and has engaged in other efforts to bolster the country’s burgeoning food processing sector.

“We have allowed 100% FDI in multi-brand retail and allowed the creation of the market as well which this infrastructure can feed,” the minister said, according to the Financial Express of India’s report. “The result has been that, from last year to this year, there has been a 40% increase in FDI.”

The minister, speaking at a gathering to promote the upcoming World Food India 2017 event, noted that despite India’s strengths in agricultural production, processing of the country’s crops remains small compared to other countries in the region.

“Just 10% of our food produce is being processed. If countries like Thailand and Malaysia are processing 70% of their produce, why can’t we? With our recently released policy of ‘Kisan Sampada Yojana’ and a corpus fund of Rs 6000 crore, we are hoping to raise food processing output by another 5% including incentives,” the minister said, as quoted in The Hindu.

Formerly known as SAMPADA, or Scheme for Agro-Marine Processing and Development of Agro-Processing, the ministry’s renamed effort, Kisan SAMPADA Yojana, will provide financial support through 2020 for mega food parks, integrated cold chain and value addition infrastructure, the creation or expansion of food processing and preservation capacities, and other food and agriculture-related projects.

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