FDI in food: Govt may permit foreign companies to import ingredients

New Delhi: The government is expected to permit foreign companies to import certain key ingredients like flavours and preservatives under the proposal to allow 100 per cent FDI in the food processing sector.

The Centre may also permit players to retail their products online, sources said. They said since some key ingredients of a food product may not be available in the country, the government may permit companies which want to set up units in India to import those inputs.

The Department of Industrial Policy and Promotion (DIPP) has proposed to allow 100 per cent foreign direct investment (FDI) through government approval route in marketing and selling of food products produced and manufactured in India. The DIPP, under the Commerce and Industry Ministry, deals with FDI related matters.

However, another source said the Food Processing Ministry is insisting on making it mandatory for the foreign players to invest a minimum of about 25 per cent of their total investments in rural ares to create infrastructure like cold chains to benefit farmers.

The government has said FDI in food processing will help farmers, reduce wastage of fruits and vegetables, give impetus to the industry and create vast employment opportunities. During April-December, FDI into the country grew by 40 per cent to USD 29.44 billion.