51% FDI likely in food retailing

The government may allow foreign direct investment up to 51 percent in food retailing in select metros and cities.
 
The minister of food processing made a strong case to this effect before the empowered group of ministers on food processing headed by Union Agriculture Minister Sharad Pawar which met on Tuesday.
 
The ministry, in a presentation, suggested that FDI up to 51 percent could be permitted in the initial phase given the high risk in the sector.
 
It has also sought income tax waiver for ten years for producers of perishable and non-perishable food items.

Government officials said that the suggestions, if approved by the EGoM, could be announced later this year.
 
Some of the other concessions for the sector include an 8 percent custom duty on the processing and manufacturing of perishable and  non-perishable items, VAT and excise duty waiver for perishable items and six per cent excise duty and 4 percent VAT on the non-perishable products.
 
Making a case for providing preferential treatment to the sector, the ministry said that the government could also consider granting investment in the sector the status of infrastructure.
 
It also suggested setting up of mega food parks and modern abattoirs, integrated cold chains, deep-sea fishing and landing centre to incentivise private sector participation.
 
In order to raise the required investment of Rs 100,000 crore for the sector, the ministry said the government could consider setting up of an Agro-processing Development Bank of India, as a subsidiary of Nabard, and create an agro-processing infrastructure and marketing development fund with a corpus of Rs 1,000 crore.
 
The ministry also suggested creating a global promotional campaign for exports in identified products and creating an online global market user interface.