(FE)
The government is considering a proposal to ease foreign direct investment (FDI) guidelines in the retailing of food products to allow a certain percentage of locally-produced non-food items along with the edible products. Food processing minister Harsimrat Kaur Badal told FE her ministry has suggested that a foreign retailer be allowed to sell locally-produced non-food items worth 25% of its investments at the farm-gate level. However, a final decision will likely be taken after comprehensive consultations among ministries, including commerce and industry, food processing, and finance.
The move to relax the rule comes after several global retailers such as Walmart, Tesco, Metro Cash and Carry and Auchan Group conveyed to the government their willingness to set up shops here, provided the rules are relaxed to add more items to the shelves, official sources had told FE early last month.
Even a Brazilian retailer is learnt to be exploring opportunities to invest in India with a local partner. Although these retailers haven’t submitted details of investments that they may make in India, the food processing ministry believes potential investments could be as much as $5-10 billion if rules are suitably relaxed.
