The Union government will soon clear retail giant Amazon’s proposed $ 500 million investment in retail of food products, according to Food Processing Minister Harsimrat Kaur Badal.
“There was some delay due to abolition of the FIPB [Foreign Investment Promotion Board]. It [Amazon’s proposal] will soon be cleared,” she said on Tuesday.
Amazon’s proposal will now be vetted by the Department of Industrial Policy and Promotion (DIPP) under the Commerce Ministry.
Ms. Badal said more investment in the food processing sector iwas need of the hour to reduce the huge wastage during post harvesting and transportation.
Despite India being the world’s largest producer of vegetables and fruits, the processing level is very low at 10%, she said, adding that foreign investment would bring new technologies, products, processes and markets.
The government had received investment proposals from three companies — Amazon, Grofers and Big Basket — worth $695 million for retail of food products.
While the U.S.-based Amazon is one of the major e-commerce players in India, Grofers and Big Basket are into online grocery space. Amazon has proposed to invest around $500 million in food products retail.
The government in the last year allowed 100% foreign direct investment (FDI) through approval route for trading, including through e-commerce, in respect of food products manufactured and produced in India.
In 2016-17 (April-December), the food processing sector in the country received FDI of $663.23 million.
The Union Cabinet, in May 2017, decided to wind up the 25- year-old FIPB, which was vetting FDI proposals requiring government approval, to expedite the clearance process.
Under the new mechanism, the proposals will be approved by the Ministries concerned as per the standard operating procedure approved by the Union Cabinet.