100% FDI decision in food processing sector will play a big role in doubling farmers’ income by 2022: Minister



100% FDI decision in food processing sector will play a big role in doubling farmers’ income by 2022: Minister


Aspire to turn India into the food factory for the world in the next few years: Minister

I am looking at a market that goes to the farmer’s doorsteps: Smt. Harsimrat Kaur Badal

Food Processing Industries Minister inaugurates 31st edition of AAHAR

Highest ever participation in International Food and Hospitality Fair 2016

Amidst the global slowdown, India continues to be one bright spot. Many foreign players whom I met at international food expositions, requested me to put in a word, so that they can participate in AAHAR. This is testimony to the changed global outlook towards India and the strengthening of ‘Brand India’, thanks to the global outreach of Hon’ble Prime Minister Shri Narendra Modi. Under his leadership, the Government has worked hard to create an environment conducive to the growth of the economy. The food processing sector in India is going to be one bright spot which will propel this growth.

-          Union Food Processing Industries Minister, Smt. Harsimrat Kaur Badal, at inauguration of AAHAR 2016


Inaugurating the International Food and Hospitality Fair 2016, being held at Pragati Maidan, New Delhi, the Minister said that the Budget decision to allow 100% FDI in multi-brand retail for food products produced and processed in India will play a catalytic role in leapfrogging Indian economy. She underlined that the decision pertains to FDI in 100% swadeshi and home-grown food.


The average Indian spends 40% of his income on eatables, and only 10% of what we grow is processed in India. Recalling these facts, the Minister pointed to the huge opportunity that beckons investors. She said that the FDI decision would give a boost to the sector, and would contribute to the eventual aim of uplifting farmers and doubling farmers’ income by 2022.

I wish I did not have to go the market; I wish the market came to me.

Recalling the big market access challenge that India’s farmers face, Smt. Badal said that she is looking at a market that goes to the farmer’s doorsteps, an industry that chases the farmer. She said that the 100% FDI decision would usher in a partnership between industry and farmers, play a huge role in creating backward infrastructure linkages and plugging wastages, thereby improving the farmers’ prospects.

The Minister spoke also of the e-marketing platform that is slated to be launched in April 2016, hailing it as a revolutionary initiative by the Prime Minister. She said that the digital platform will integrate 585 regulated markets, providing farmers and traders with access to opportunities for purchase/ sale of agri-commodities at optimal prices in a transparent manner. Smt. Badal spoke also of the Government’s vision to tap the potential for organic farming in North East India.

Stating that 42 Mega Food Parks are coming up, the Minister said that foreign players can tie up with these parks in pursuing ‘Make In India’, even for specific nations of their choice. This would be facilitated by the plug-and-play model under which these parks would operate, wherein common infrastructural facilities would be provided. Smt. Badal said that she aspires to turn India into the food factory for the world in the next few years.

Aspire to turn India into the food factory for the world in the next few years
-          Union Food Processing Industries Minister, Smt. Harsimrat Kaur Badal

The Minister congratulated the India Trade Promotion Organization for the unprecedented participation response to AAHAR 2016, especially with its focus on new and young entrepreneurs, and added attractions such as a Culinary Art Competition.

The Chairman and Managing Director, ITPO, Shri L. C. Goyal said that AAHAR has transformed from a trade promotion event to a growth propelling event. He said that it has become India’s best known brand in food and hospitality sector, having acquired a prominent place in the global calendar of international expositions.

Shri Goyal said that the decision to allow 100% FDI in the sector would have a huge multiplier effect, by reducing post-harvest wastage, helping crop diversification, incentivizing global players to invest and produce in India and by creating a large number of jobs. He said that this would also help the other objectives of Make in India, Skill India and Start up India.

The Chairman said that ITPO’s role is being reoriented, with introduction of e-tendering and e-refunds. He said that the proposal to redevelop Pragati Maidan Complex into a world-class exhibition-cum-convention complex is at an advanced stage of consideration. He underlined that the administration will not allow any event to be adversely affected, due to the redevelopment project. Noting that AAHAR 2016 has broken previous records in terms of both number of exhibitors and space given to exhibitors, Shri Goyal said that the new motto of ITPO is ‘Better and Bigger’.

On the occasion, the Union Minister also presented cheques of 1 crore rupees each to Swachh Bharat Kosh and Clean Ganga Initiative of the Government of India, on behalf of ITPO.




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Flagship Programme in FPIs 

Thedevelopment of food processing industries in the country, the Ministry is implementing a major flagship Central Sector Scheme of Infrastructure Development for food processing having components of Mega Food Parks, Cold Chain, Value Addition and Preservation Infrastructure and Setting up / Modernization of Abattoirs.As per latest Annual Survey Industries: 2012-13, the total number of factories in the registered food processing sector in the country was 37,175.In terms of investment in fixed capital, registered food processing sector is growing annually at an average of 18.47 per cent during five years ending 2012-13. As per latest, ASI 2012-13, the Fixed Capital in food processing industries was at ₹ 1,58,865 crore. 

For setting up of integrated cold chain and preservation infrastructure facilities in the country, Ministry of Food Processing Industries is implementing a Central Sector Scheme of Cold Chain, Value Addition and Preservation Infrastructure since 2008. Under the scheme, financial assistance @ 50% of the total cost of plant & machinery and technical civil works in general areas and 75% for NE region and difficult areas (North Eastern states, Sikkim, J&K, Himachal Pradesh and Uttarakhand) subject to a maximum grant-in-aid of ₹ 10 crore per project is provided for setting up the cold chain infrastructure.Under this scheme, a total 66 projects with 2,92,391 metrictonne storage capacity for fruits and vegetables have been sanctioned by the Ministry during the last three years and the current year. In addition, 30850 MT cold storage capacity for fruits and vegetables, have been created in 7 operational Mega Food Parks projects under the Scheme of Mega Food Parks of this Ministry. 

Government is also providing various other incentives to promote creation of cold chain infrastructure in the country as detailed below: 

Services of pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits and vegetables have been exempted from Service Tax in Budget 2015-16. 

Loans to food & agro-based processing units and Cold Chain have been classified under Agriculture activities for Priority Sector Lending (PSL) as per the revised RBI Guidelines issued on 23/04/2015. 

Under Section 35-AD of the Income tax Act 1961, deduction to the extent of 150% is allowed for expenditure incurred on investment for (i) setting up and operating a cold chain facility; and (ii) setting up and operating warehousing facility for storage of agricultural produce. 

Government has extended Project Imports benefits to cold storage, cold room (including for farm level pre-cooling) or industrial projects for preservation, storage or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat. Consequently, all goods related to Food Processing, imported as part of the project, irrespective of their tariff classification, would be entitled to uniform assessment at concessional basic customs duty of 5%. 

Refrigeration machineries and parts used for installation of cold storage, cold room or refrigerated vehicle, for the preservation, storage, transport or processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat under Tariff Head: Chapter 84 are exempted from Excise Duty. 

Construction, erection, commissioning or installation of original works pertaining to post-harvest storage infrastructure for agricultural produce including cold storages for such purposes are exempted from Service tax. 

Capital investment in the creation of modern storage capacity has been made eligible for Viability Gap Funding scheme of the Finance Ministry. Cold chain and post-harvest storage has been recognized as an infrastructure sub-sector. 

This information was given by the Minister of State for Food Processing Industries SadhviNiranjanJyoti in a written reply in Lok Sabha today. 

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Modernization of Abattoirs 

Ministry of Food Processing Industries is implementing the Central Sector Scheme for Setting up/ Modernization of Abattoirs under which assistance in the form of grant-in-aid is provided for setting up of new and modernisation of existing abattoirs to local bodies (Municipal Corporations and Panchayats)/ Public Sector Undertakings/ Co-Operatives/Boards under Government. The Scheme has flexibility for involvement of private investors on Public Private Partnership (PPP) basis.The proposals that are to be implemented under PPP mode shall follow the guidelines for financial support to Public Private Partnerships (PPPs) in infrastructure, issued by Department of Economic Affairs, Ministry of Finance, Government of India, as adopted by each State Government. 

The scheme was transferred to the State Governments for implementation under the Centrally Sponsored Scheme of National Mission on Food Processing (NMFP) with effect from 1.04.2014. Proposals received up to 31.03.2014 are being processed by the Ministry under the Central Sector Scheme. Fresh proposals with effect from 01.04.2014 are to be submitted to State Governments. However, the Centrally Sponsored Scheme of NMFP has been delinked from Central support from financial year 2015-16

The scheme envisages a grant of 50% in general areas and 75% in difficult areas for cost of Plant and Machinery (P&M) and Technical Civil Work (TCW) and other eligible items subject to a maximum of Rs.15 crore per abattoir. Difficult areas include North Eastern States including Sikkim, Jammu & Kashmir, Himachal Pradesh, Uttarakhand and ITDP notified areas of the States. 

In addition, Department of Animal Husbandry, Dairying and Fisheries, Ministry of Agriculture & Farmers Welfare is running a programme of Rural Slaughter Houses (establishment/ modernization/ expansion) through Panchayati Raj Institutions as a Component under the National Livestock Mission. This Component supports slaughter houses in rural areas, with grant-in-aid under the scheme. However, no grant-in-aid has been released under this component till date. 

This information was given by the Minister of State for Food Processing Industries SadhviNiranjanJyoti in a written reply in Lok Sabha today. 

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