India reveals slump in foreign funds for food processing

By Ben Bouckley

- Last updated on GMT

Related tags Food processing Food processing sector Investment

Dr Charan Das Mahant, India's minister of state for the food processing industries
Dr Charan Das Mahant, India's minister of state for the food processing industries
The Indian government has released figures showing that Foreign Direct Investment (FDI) in the food processing sector fell significantly during 2010-2011.

Dr Charan Das Mahant, Indian minister of state for the food processing industries, said in a written reply to the Lok Sabha (the lower house of India’s parliament), that his department had not assessed the effect of investments.

Government figures show that US $188.67m (€145.2m) was invested from 2010-2011, a significant decrease on investments during 2009-2010 ($278.89m), but a major uplift on 2008-2009 ($102.71m).

India permits 100 per cent FDI in its food processing sector, but investment by foreign firms in the country is a controversial topic.

As reported by our sister site FoodNavigatorAsia.com​, in late November the nation’s government approved a proposal to allow 51 per cent FDI in its multi-brand retail sector.

Such a move could open India’s $450bn market to international firms, but the resulting furore from protectionist groups forced the government to shelve the idea pending further talks.

But defending FDI in food processing, Das Mahant said: “FDI not only complements and supplements domestic investment, but also bring state-of-the-art technology and best managerial practices, thereby providing better access to foreign technology to the domestic industry.”

This enabled the “easy integration”​ of India’s food processing industries within the global market, he added.

At the end of November, another minister from Mahant’s department, Sharad Pawar, told the Lok Sabha that the country did not have data to assess its level of food processing compared to neighbouring or developed countries.

With India’s food processing sector growing at an average of 8 per cent per year between 2007-2010, he added that the government (along with private enterprise) was investing heavily therein.

Pawar said: “The government have taken up a number of schemes for setting-up mega food parks, establishing cold chains and constructing and modernising abattoirs, setting-up new food processing plants, upgrading technology in existing plants and schemes for improving skills development.”

Related topics Processing & Packaging

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