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FDI in food processing sector falls 57 pc to $393M in FY21

Foreign Direct Investment (FDI) in food processing sector declined 57 percent to $393.4 million (around Rs 2,926 crore) in 2020-21 as compared to the previous year, the government said on Tuesday.

In a written reply to the Lok Sabha, Minister of State for Food Processing Industries Prahlad Singh Patel said the FDI policy and data are the under purview of the Department for Promotion of Industry and Internal Trade (DPIIT).

“As per extant policy, 100 percent FDI for FPI sector is permitted under the automatic route implying that no prior approval of the Government or RBI is required. As per the Foreign Exchange Management Act (FEMA), the Indian recipient company has to report the inflow of FDI to Reserve Bank of India,” he said.

The FDI received by food processing industries (FPI) sector during 2020-21 stood at $ 393.4 million as against $ 904.7 million in the previous year.

During 2018-19, FDI in FPI sector stood at $628.24 million.

Patel said the ministry has been implementing Central Sector Umbrella Scheme – Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) since 2016-17 for overall growth and development of the food processing sector, including processing of agro products and thus increasing the income of farmers.

The component schemes of PMKSY are Mega Food Park, Integrated Cold Chain and Value Addition Infrastructure, Creation /Expansion of Food Processing & Preservation Capacities, Infrastructure for Agro-Processing Clusters.

Besides, Creation of Backward & Forward linkages, Food Safety and Quality Assurance Infrastructure, Human Resource and Institutions and Operation Greens are part of PMKSY.

Under these schemes, the ministry provides mostly credit linked financial assistance (capital subsidy) in the form of grants-in-aid to entrepreneurs for setting up food processing/preservation industries.

“So far, the Ministry has approved 41 Mega Food Parks, 353 cold chain projects, 63 agro processing clusters, 292 food processing units, 63 creation of backward & forward linkages projects and six Operation Green projects across the country,” Patel said.

These sanctioned projects are estimated to benefit about 34 lakh farmers on completion, he added.

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