India signs cooperation agreement with World Food Programme for 2023-27
FDI is expected to allow overseas investors in the food retail segment to offer ‘Made in India’ non-food items as well which will pave the way for multibrand foreign retailers to tap the Indian market.
According to the news reported by The Hindu, Food Processing Minister Harsimrat Kaur Badal said in an interview that the Prime Minister’s Office (PMO) had assured her ministry that the concerned foreign direct investment (FDI) norms would be tweaked as a ‘sweetener’ for foreign investors likely to attend a mega World Food Forum being held in the national capital this November.
Investors pointed out that multibrand food retail ventures demanded lot of investment in infrastructure but the margins on food would be very small. She observed that investments worth $10 billion were waiting in the wings for the right policy framework.
The minister said that the food-only model was a challenge for them. India had opened up 100% FDI in multibrand food retail and food processing sectors in early 2016. Ms. Badal said that she had flagged the issue of how multibrand food retail ventures would compete with the little kirana shops which might sell all imported goods and other items as well while the multibrand ventures were allowed to sell only food with Prime Minister Narendra Modi.
Ms. Badal said that their focus was on doubling the farmer’s income too as the farmer is suffering today because he doesn’t even have the basic storage facilities to hold his produce for 2-3 months and get a better rate and added that food retailers might partner with farmers.
Ms. Badal suggested to put a clause that said that 20-25% of the total investment can be done on home care items which are manufactured in India only. She is of the opinion that the promotion of the products made in India will create employment in the country.
She concluded that this would be convenient for consumers too as they can buy food and small home care items from one place instead of going to different retailers.