Maharashtra receives bulk of FDI in food processing sector in FY'08 & FY'09

Maharashtra received the bulk of a total of 141 foreign direct investments in the country, worth a total $171.72 million, in the food processing sector during the first two years of the 11th five-year plan (April 2007-March 2009)

The Maharashtra region, comprising of Maharashtra, Dadra and Nagar Haveli, Damn and Diu, received 48 investment proposals worth around $28.73 million during the period, minister of food processing industries, Subodh Kant Sahai, informed the Rajya Sabha in a written reply.

The extant policy permits FDI under the automatic route in most sectors/activities, including food-processing industries. No specific criteria have been laid down for FDI into sectors under the automatic route. However, proposals requiring prior government approval are considered by the Foreign Investment Promotion Board (FIPB), an inter-ministerial recommendatory body, which takes into account the policy and sectoral guidelines for FDI, according to the minister.

The FIPB, he stated, also examines whether the proposal would jeopardise an existing joint venture or technology transfer/trade mark agreement, if any, in the same field in India. There is no definitive indication about the adverse impact of FDI on the small food processing units and no data is available centrally regarding the effect of FDI on the domestic industry, he added.
    
Foreign direct investment, he said, complements and supplements domestic investment. FDI brings in, apart from capital, state-of-art technology and best managerial practices, thereby providing better access to the domestic industry to foreign technology and integration into the global market, he added.

The government has also announced a number of incentives for the development of the food processing industry in the country, including its inclusion in the list of priority sector for bank lending, automatic approval for foreign equity up to 100 per cent for most processed food items excepting alcohol and beer and those reserved for the small scale sector subject to certain conditions, zero excise duty on processed fruits and vegetables, income tax holiday and other concessions for certain food processing industries sectors, etc. No state specific policy packages have been announced so far, he stated.

Besides, the ministry of food processing industries has been implementing various infrastructure development schemes such as setting up of mega food park, cold chain, modernisation of abattoirs and value added centres.

The ministry has also been undertaking schemes for technology upgradation/ establishment/ modernisation of food processing industries, quality assurance, codex, standards and R&D, human resource development, strengthening of institutions and upgradation of quality of street food.