Lok Sabha Question No. 4509 (UNSTARRED), answered on 2019-01-08
Subject: Growth of FPI Sector
Ministry: FOOD PROCESSING INDUSTRIES
Asked by: CHANDRA PRAKASH JOSHI, BIDYUT BARAN MAHATO, SUMEDHANAND SARASWATI

## GOVERNMENT OF INDIA

## MINISTRY OF FOOD PROCESSING INDUSTRIES LOK SABHA UNSTARRED QUESTION NO. 4509 ANSWERED ON 8 TH  JANUARY, 2019

## GROWTH OF FPI SECTOR

## 4509. SHRI CHANDRA PRAKASH JOSHI: SHRI BIDYUT BARAN MAHATO: SHRI SUMEDHANAND SARASWATI:

Will the Minister of FOOD PROCESSING INDUSTRIES be pleased to state:

- (a) whether the food processing sector in the country is the largest sector in terms of production, growth, consumption and exports, if so, the details of the steps taken by the Government to promote the food processing sector from 2014 onwards till date;
- (b) the quantum of foreign investment made in the Food Processing Industries sector from the year 2014 to till date and the names of the areas in which this environment has been made along with the details thereof;
- (c) whether globally more than 72 percent of the sale of food products takes place through super stores and if so, the present status thereof in the country;
- (d) the details of the steps taken by the Government to improve the situation in this regard from the year 2014 onwards till date; and
- (e) the percentage share of retail market and super stores in the trade of food products in the country at present and the reasons therefor along with the details thereof, State-wise?

## ANSWER

## THE MINISTER OF STATE FOR FOOD PROCESSING INDUSTRIES (SADHVI NIRANJAN JYOTI)

(a): As  per  the  latest  Annual  Survey  of  Industries  (ASI),  2015-16,  in  terms  of  number  of  registered  manufacturing factories/units, contribution to the total output by the registered manufacturing industries and generation of employment by these registered industries, the food processing is the largest in the country. Food processing sector also occupies an important place in export as the sector accounts for nearly 11.7% of the country's total export. The Government has taken a number of measures to promote food processing sector. It has permitted 100% Foreign Direct Investment (FDI) through automatic route in manufacturing of food products and 100% FDI under Government approval route for retail trading, including through ecommerce,  in  respect  of  food  products  produced  and/or  manufactured  in  India,  a  special  fund  of  Rs.2000  crore  has  been created in National Bank for Agriculture and Rural Development (NABARD) to provide affordable credit to food processing projects/units, food & agro-based processing units and cold chain infrastructure has been classified as agriculture activity for Priority Sector Lending (PSL), lower Goods & Service Tax (GST) rates for majority of food products have been fixed,   100 percent income tax exemption from profit derived from activities such as post-harvest value addition to agriculture by FPOs' having annual turnover up to Rs.100 crores have been provided to attract investment in the sector.

Further,  the  Ministry  of  Food  Processing  Industries  (MoFPI)  is  implementing  a  Central  Sector  Scheme  named  as Pradhan Mantri Kisan SAMPADA Yojana (PMKSY). Under PMKSY, capital subsidy in the form of grants-in-aid ranging from 35% to 75% of the eligible cost of the project  subject to maximum specified limit is provided to investors under the various schemes for undertaking infrastructure, logistic projects and setting up of food processing units in the country. The MoFPI has recently launched a new Central Sector Scheme 'Operation Greens'' for integrated development of Tomato, Onion and Potato (TOP) crops value chain, with an outlay of Rs.500 crore to, inter alia, promote Farmers Producers Organizations (FPO), agri-logistics, processing facilities and professional management of FPOs.

(b): As per the latest available data, during April 2014 to June 2018, US$2781 Million FDI equity was received in the food processing sector and they are invested largely in the segments like dairy products, chocolate and sugar confectionery, fruits and vegetable processing, bakery products and prepared animal feeds.

(c) to (e): Apart from the super markets, food products are also traded through e-commerce in the organized retail market. However,  no  study  or  survey  on  the  share  distribution  of  different  market  channels  in  the  organised  retailing  has  been conducted by the MoFPI.