Friday, February 10, 2012: 04:10:32 PM


Need for Increased FDI in Food Processing

The Ministry of Food Processing Industries has highlighted the need for FDI in the food processing sector. The Government of India currently permits 100 percent FDI in this sector through the automatic route.

The inflow of FDI in 2008–09 was `456 crore ($103mn). It rose to `1314 crore ($279mn) during the period 2009–10. But it fell to `858 crore ($188mn) in 2010–11—a 32 percent drop.

Dr Charan Das Mahant of the Ministry of Food Processing Industries explains that FDI enhances domestic investment and brings foreign technology and managerial expertise into the country. To help increase FDI in food processing, a government sponsored study entitled ‘Vision 2015’ has been undertaken by Rabo bank. It seeks to enhance India’s value addition to food processing from 20 percent to 35 percent, and to improve India’s share in global food from 1.5 percent to 3 percent by 2015. An investment of `1,00,000 crore is the estimated requirement to accomplish this goal. The government’s share in the same is estimated at `10,000 crore.

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