FDI In Food Multi-Brand Retail No Threat To Small Shops, Says Minister

Allowing foreign direct investment (FDI) in food multi-brand retail can never be a threat to small mom-and-pop shops in India and it should be permitted to sell food grown and processed in India in the domestic as well as foreign markets, said Harsimrat Kaur Badal, Union minister for food processing industries.

Speaking at a seminar on opportunities in the food processing sector at the Make in India venue in Mumbai, the minister said the food processing industry in India was going to explode in the next few years as the country has the largest raw materials base and its food production levels have quadrupled in the past few years.

"We are a food secure country and have the potential to become the food factory for the world," she said.

Allowing FDI in food multi-brand retail will not only help in reducing the wastage of food worth Rs 92,000 crore, it will also help to modernize the Indian farmer with newer and efficient farming technologies, she added.

"India can take its nascent levels of mere 10 per cent in food processing to the next level of 30 per cent," the minister said while releasing a report entitled "Make in India – Review of Food Processing Opportunities In India" at the seminar.

"Our industry should look abroad at the large expat population and the huge opportunities that lie with traditional foods both abroad as well as here," she added.

The food processing sector in India currently contributes as much as 11 per cent and 9 per cent of GDP in agriculture and manufacturing sector respectively.

It is also one of the largest industries in India, ranked fifth in terms of production, consumption, export and expected growth. The government had recently proposed 42 food parks that will significantly impact processing capacity in the sector, which has huge potential for elevating the country’s agricultural economy, raising farmer’s income, generating employment and enhancing forex earnings.

Avinash K. Srivastava, secretary of the ministry of food processing industries, said the National Agricultural Markets initiative of the government seeks to modernize the "mandis" across various states.

There are also measures afoot such as procurement of pulses by the government with the objective to create adequate buffer stocks as well as offer assurance to farmers of the purchase of their produce.

Highlighting the immediate needs of certain reforms in the sector, banker Rana Kapoor, MD and CEO of Yes Bank, suggested that developing brand India through foods that have specific geographic appellations. These items provide for traceability and trust factors that help identify foods belonging to particular countries, for example, the popularity of the Kiwi fruit from New Zealand.

According to Kapoor, India has untapped opportunities in horticulture and floriculture and enjoys many geographical and seasonal advantages.