The foreign direct investment (FDI) fell by 30 per cent to Rs 5,037.06 crore in India’s food processing industry in the last fiscal year, shows the official data. In FY2023, the food processing industry saw FDI of Rs 7,194.13 crore.
The Food Processing Industries Ministry submitted data to the Lok Sabha indicating that the food processing sector received foreign direct investment (FDI) of Rs 5,290.27 crore in FY22 and Rs 2934.12 crore in FY21.
FDI was Rs 6,414.67 crore in FY20; Rs 4430.44 crore in FY19; Rs 5,835.62 crore in FY18; Rs 4,865.85 crore in FY17; and Rs 3,312 crore in FY16 in the food processing sector.
The ministry has implemented a number of initiatives to increase foreign investment in the food processing industry, including allowing 100 per cent of FDI through an automatic route for the industry, subject to sector-specific restrictions.
Under the government-approval process, it has permitted 100 per cent FDI in trade, including e-commerce, for food goods made or produced in India. The government has exempted all processed food items from the purview of licensing under the Industries (Development and Regulation) Act, 1951.
The GST rate is reduced for both processed and raw goods. More than 71.7 per cent of food products under various chapter heads/sub-heads are covered in lower tax slabs of 0 per cent and 5 per cent.
Processed food exports fell 17 per cent to $10,881.81 million in FY24 from $13,078.3 million in the previous fiscal year.
The Pradhan Mantri Kisan SAMPADA Yojana (PMKSY), the Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) and the Prime Minister Formalisation of Micro Food Processing Enterprises (PMFME) programs are being implemented by the ministry to promote the growth of this industry. These three programs are all nationwide in nature and are driven by demand.
These programs aim to build a state-of-the-art infrastructure with effective supply chain management from the farm gate to the retail outlet. They also aim to improve farmer returns, create jobs, decrease waste, raise the processing level, and boost processed food exports.
(Source- The Financial Express)
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