Allow FDI in retail to boost food processing sector: Assocham

The government should allow FDI in multi-brand retail sector as it will help the food processing industry adopt new technologies and improve productivity, industry body Assocham today said.

Despite high growth, the food processing industry is still dominated by small scale and unorganised sector, mainly involved in producing low-value added products, Assocham Secretary General DS Rawat said.

Only seven% of the total agriculture produce is processed in India compared to 53% in the US and 42% in New Zealand, he said.

"The need of the hour is to improve technology and productivity in order to be competitive globally," he added.

Further, Rawat said that investment in the sector in Odisha very low.

"If FDI in retail is allowed, flow of investment would jump manifold into Odisha which has huge potential," he said.

He said that the state accounts for only 4.5% of the total investment of about Rs nine lakh crore food processing industry.

Seeking concrete steps to raise investment in the sector in Odisha, Rawat said that ASSOCHAM Cluster Development Foundation in collaboration with the state government has proposed to adopt two districts for setting up food and agri processing clusters.

This would be on the lines of its initiatives taken in West Bengal, Jammu and Kashmir and Bihar with full support from United Nations Industrial Development Organisation (UNIDO) and Central government, he said.

The UNIDO team would be in India in the first week of March and their association shall also be explored, he said.