Lok Sabha Question No. 793 (UNSTARRED), answered on 2016-03-01
Subject: FDI in Multi Brand Retails for Food Products
Ministry: FOOD PROCESSING INDUSTRIES
Asked by: HEENA VIJAYKUMAR GAVIT, VIJAYSINH MOHITE PATIL, T. RADHAKRISHNAN, SUPRIYA SADANAND SULE, DHANANJAY BHIMRAO MAHADIK, RAJEEV SHANKARRAO SATAV

## GOVERNMENT OF INDIA MINISTRY OF FOOD PROCESSING INDUSTRIES

## LOK SABHA UNSTARRED QUESTION NO. 793

ANSWERED ON 1 ST  MARCH, 2016

## FDI IN MULTI BRAND RETAILS FOR FOOD PRODUCTS

## 793. DR. HEENA VIJAYKUMAR GAVIT:

SHRI MOHITE PATIL VIJAYSINH SHANKARRAO: SHRI T. RADHAKRISHNAN: SHRIMATI SUPRIYA SULE: SHRI DHANANJAY MAHADIK: SHRI SATAV RAJEEV: SHRIMATI V. SATHYA BAMA: SHRI KIRTI AZAD:

SHRI PR. SENTHIL NATHAN:

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

- (a)  whether the Government has a proposal to allow up to 100 % foreign direct investment in multi brand retail for food products;
- (b)  if so, the details and the objective thereof;
- (c)  whether  the  Government  is  also  considering  a  10  year  tax  holiday  for  food  processing units  besides  relook at  FDI  policy  in  multi  brand  retail  in  food processing as  a  part of  the Make in India initiative;
- (d)  if so, the details thereof along with the time by which a decision in the matter is likely to be taken;
- (e)  the details of the likely effect of 100% foreign direct investment in multi brand retail for food products on small enterprises; and
- (f)  the steps taken by the Government for reducing wastage, helping farm diversification and encouraging global giants to produce locally rather than import items?

## ANSWER

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

- (a) & (b): Yes sir. A proposal is under consideration to allow 100% foreign direct investment in  multi-brand  retail  of  food  and  food  products  produced  and  manufactured  in  India.  The objective  of  the  proposal  is  to  enable  big  multinational  retail  chains  in  the  food  and  food processing  sector  create  back-end  infrastructure  and  bring  in  latest  technology  to  the  farm sector.  This  would  increase  the  level  of  food  processing  in  the  country,  reduce  wastage, control food inflation, create employment opportunities and increase income of the farmers.

(c) & (d):  Yes sir. A proposal has been submitted to allow 10 year tax holiday for setting up food processing  units  in  Mega  Food  Parks.  Government  has  examined  the  proposal  along with other tax proposals while finalizing the Union budget of 2016-17.

(e):    The  creation  of  back-end  infrastructure  by  multinational  food  retail  chains  would provide common facilities for supporting food processing industries. Such facilities include collection centres, cold chain, packaging, logistics and food testing laboratories, which would benefit the small enterprises. The presence of multinational food retailers would also provide an assured market to farmers and small enterprises for selling their food and food products.

(f):    For  reducing  wastage  and  helping  farm  diversification  government  has  been  actively supporting setting up of Mega Food Parks and creation of integrated cold chain infrastructure through  provision  of  subsidy  and  tax  benefits.  A  special  corpus  of  Rs.2000  crore  has  also been constituted with NABARD to provide concessional credit for financing of Mega Food Parks  and  processing  units  to  be  set  up  therein  and  in  other  designated  food  parks. Government  was  also  providing  subsidy  for  setting  up  food  processing  units  before  the scheme  was  transferred  to  the  state  governments.  All  credit  disbursed  for  setting  up  food processing units and cold chain infrastructure has been brought under priority sector lending by the RBI in order to urgently attend to the financing needs of the food processing sector. For encouraging global giants to produce locally, Government has been running the 'Make in India' campaign. The 'Make in India Week' was recently organized in Mumbai to promote India  as  an  investment  destination  for  most  of  the  sectors  including  the  food  processing industries.

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