Pepsico India exempted from 49-per cent equity dilution

The cabinet committee on economic affairs has given its approval to the proposal of Pepsico Holding Private Limited for 100-per cent ownership in its Indian operations subject to the conditions that it brings in an additional investment of $50 million.

This has been done as per the recommendation of the Foreign Investment Promotion Board (FIPB).

As per the earlier foreign investment norms, Pepsico India Holding were to divest 49 per cent equity in bottling firms to Indian companies. But, with the government making changes in the FDI policy in the food processing sector since then, Pepsico has been exempted from the obligation.

The new FDI policy allows 100 per cent foreign equity in the food processing sector in the country. The CCEA decision follows this.

''The government has relaxed the investment conditions for the company to invest in India,'' science and technology minister Kapil Sibal said after a meeting of the cabinet.

''It would now no longer be asked to divest its 49 per cent stake in its Indian subsidiary, PepsiCo India Holdings Pvt. Ltd," he added.