Attracting FDI and Formulating Special Schemes for FPIs

The Foreign Direct Investment in food processing sector has increased from USD 170.21 Million in 2011-12 to USD 505.88 Million in 2015-16.

Foreign Direct Investment inflows into the food processing industries has been one of the reasons for 5.78 % growth of gross value added in food processing industries in 2014-15 at 2011-12 prices. Further, as per the Annual Survey of Industries the number of food processing industries in the registered sector has also grown from 36880 in 2011-12 to 37450 in 2013-14.

To promote food processing units in the country, the Ministry of Food Processing Industries is implementing schemes of Mega Food Parks, Cold Chain, Value Addition and Preservation Infrastructure, Setting up/Modernization of Abattoirs and Strengthening of Institutions. Under these schemes, grant-in-aid is given for setting up projects. In addition to permitting 100% foreign direct investment in food processing sector through automatic route, Government has also allowed 100% FDI in retail marketing of food products produced and manufactured in India through approval route. To encourage the development of food processing industries Government has reduced excise duty on food processing and packaging machinery from 10% to 6%, allowed food processing units 100% income tax exemption on profits for the first five years of operation and after that at the rate of 25% income tax exemption on the profits for the next five years, etc.

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