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The food processing sector witnessed a surge in Foreign Direct Investment (FDI) inflows in FY22 after it had recorded a massive dip in FDI inflows in the previous fiscal.
According to the latest Economic Survey, FDI in the food processing sector in the April-September period in 2021 stood at $410.62 million. This was up 86 per cent compared to the corresponding period in the previous year. FDI inflows in the sector in the April-September period in 2020 was at $220.42 million.
Overall in FY21, FDI inflows in the sector had declined by about 56 per cent to about $393.4 million from $904.7 million in FY 2019-20. The massive dip was likely due to the pandemic outbreak in the year.
“The sector has witnessed FDI equity inflow of $4.99 billion during the period April 2014 to September 2021. The FDI equity inflow in FPI (Food Processing Industries) sector during April to September 2021 was $410.62 million in comparison to $220.42 million in the corresponding period last year,” the Survey said.
The government allows 100 per cent FDI in the food processing sector under the automatic route. However, in case of trading of food products manufactured or produced in India, including through e-commerce, 100 per cent FDI is allowed under the Government approval route.
In December, the Minister of State for Food Processing Industries, Prahlad Singh Patel had informed the Rajya Sabha in in a written reply, that the share of FDI in the food processing sector is only 1.5 per cent of the total FDI inflows and the sector needs more investments-- both domestic as well as foreign direct investment. He had also said the Ministry is implementing a Central sector scheme, Pradhan Mantri Kisan Sampada Yojana, since 2016-17 for overall growth and development of the sector including for boosting investment.
The various component schemes under PMKSY being implemented by the Ministry include mega food parks, integrated cold chain and value addition infrastructure, infrastructure for agro-processing clusters, creation of backward and forward linkages, creation and expansion of food processing and preservation capacities, Operation Greens and Food Testing Laboratories.
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