Pepsico India Holding need not divest 49 per cent equity in bottling firms to Indian companies, with the government today exempting it from the obligation following change in foreign direct investment (FDI) rules for the food processing sector.
The exemption also prepares the ground for infusion of Rs 250 crore ($50 million) FDI by the beverages major in India.
The decision was taken by the Cabinet Committee of Economic Affairs as 100 per cent FDI in the food processing sector is now allowed in the country.
Earlier, when Coca Cola and Pepsico came to India they were asked to mandatorily offload 49 per cent stake in bottling firms to Indian cos in due course.
This way Pepsico will bring in $50 million into the country, Science and Technology Minister Kapil Sibal told reporters after the meeting.