Foreign Direct Investment (FDI) in the food processing sector dropped by 57 per cent to USD 393.4 million (around Rs. 2,926 crores) in 2020-21 as compared to the preceding year.
Minister of State for Food Processing Industries Prahlad Singh Patel said that the FDI policy and data are the under the purview of the Department for Promotion of Industry and Internal Trade.
He stated that as per extant policy, 100 per cent FDI in FPI sector is permitted under the automatic route implying that no prior approval of the Government or RBI is required. As per the Foreign Exchange Management Act (FEMA), the Indian recipient company has to report the inflow of FDI to the Reserve,” he added.
The FDI received by food processing industries (FPI) sector during 2020-21 stood at USD 393.4 million as against USD 904.7 million in the previous year. During 2018-19, FDI in the FPI sector stood at USD 628.24 million. The ministry has been implementing Central Sector Umbrella Scheme – Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) since 2016-17 for overall growth and development of the food processing sector, including the processing of agro products and thus increasing the income of farmers.
The component schemes of PMKSY are — Mega Food Park, Integrated Cold Chain and Value Addition Infrastructure, Creation /Expansion of Food Processing & Preservation Capacities, Infrastructure for Agro-Processing Clusters. Besides, Creation of Backward & Forward linkages, Food Safety and Quality Assurance Infrastructure, Human Resource, and Institutions, and Operation Greens are part of PMKSY.
Under these schemes, the ministry provides mostly credit-linked financial assistance (capital subsidy) in the form of grants-in-aid to entrepreneurs for setting up food processing/preservation industries.
“So far, the Ministry has approved 41 Mega Food Parks, 353 cold chain projects, 63 agro-processing clusters, 292 food processing units, 63 creations of backward & forward linkages projects and 6 Operation Green projects across the country,” Patel said. These sanctioned projects are estimated to benefit about 34 lakh farmers on completion, he added.