Foreign direct investment (FDI) rules in agriculture may be relaxed, albeit only in non-farm wasteland and degraded lands.
The Union ministry of agriculture and the department of land resources under the ministry of rural development have given "in principle approval" to a proposal of the Department of Industrial Policy and Promotion (DIPP) to invite FDI for developing non-arable land through better technology into fertile and cultivable land.
Currently FDI in agriculture is prohibited, barring allied sectors like horticultre, floriculture, pisciculture, animal husbandry, aquaculture and development of seeds, vegetables and mushrooms under controlled conditions.
The proposal mooted by DIPP, the foreign investment policy-making body under the ministry of commerce, aims at coping with the problem of limited arable land and food shortage in the country.
Under this proposal to be classified as investment in land and agriculture, a foreign company could invest through an Indian company under a joint venture or technical tie-up for imparting the necessary technology for converting waste land into fertile land.
"The investments could be in drylands like deserts or marshy land or salty and barren land," said an official.
The department of agriculture has stated in its comments to DIPP that the nature of technology to be used, its proven track record in other countries and time line of the project would be essential before drawing up the final blueprint for the proposal.
And, if any land happens to be owned by a farmer or individual or an entity, he or it should be treated as a stakeholder in the final proposal or venture.
It has also suggested DIPP look into ownership issues, as to whether any public sector undertaking, through the department of land resources or agriculture or relevant state government, may be made a partner in the project to take care of public welfare.
"In what form the FDI comes, whether in a new company or existing company and whether the operations of the existing company supplements agriculture is to be examined before inviting FDI," said an official source.
The department of land resources will be mapping such non-fertile land, which could be given on lease to a company for inviting FDI. There are 24 types of degraded land in India.
