The government will soon clear the US retail giant Amazon's proposed USD 500 million investment in retail of food products in India, Food Processing Minister Harsimrat Kaur Badal said on Tuesday.
"There was some delay due to abolition of the FIPB. It (Amazon's proposal) will soon be cleared," Badal told reporters on the sidelines of an event in New Delhi.
With the abolition of the Foreign Investment Promotion Board (FIPB), Amazon's proposal will now be vetted by the Department of Industrial Policy and Promotion (DIPP) under the commerce ministry.
Badal said that more investment in the food processing sector was the need of the hour to reduce the huge wastage during post harvesting and transportation.
Despite India being the world's largest producer of vegetables and fruits, the processing level is very low at 10 per cent, she said, adding that foreign investment will bring new technologies, products, processes and markets.
The government had received investment proposals from three companies -- Amazon, Grofers and Big Basket -- worth USD 695 million for retail of food products.
While US-based retail giant Amazon is one of the major e-commerce players in India, Grofers and Big Basket are into online grocery space. Amazon has proposed to invest around USD 500 million in retail of food products.
The government last year allowed 100 per cent foreign direct investment (FDI) through approval route for trading, including through e-commerce, in respect of food products manufactured and produced in India.
In 2016-17 (April-December), the food processing sector in the country received FDI of USD 663.23 million.
The Union Cabinet last month decided to wind up the 25-year-old FIPB, which had been vetting FDI proposals requiring government approval, to expedite the clearance process.
Under the new mechanism, the proposals will be approved by the ministries concerned as per the standard operating procedure approved by the Union Cabinet.
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