 "At least $10 bn of FDI waiting for right signals, says Harsimrat Kaur Badal")
The country could be looking at an initial investment of more than $10 billion (Rs 65,000 crore), if the government gives a final nod to desired changes in foreign direct investment (FDI) in retailing.
The changes in question would allow global retailers to sell a percentage of non-food items, said Union food processing minister Harsimrat Kaur Badal.
"It would be at least $10 bn initial investment if 'food plus' gets the final nod. Not just for India; we have the UAE and Japan planning on making in India and taking it to their country. Before (the) 'World Food India' (event, scheduled for September), a lot of things might just get tied up," she hopes.
The ministry of food processing industries (MoFPI) hopes some of these decisions would be taken by the year-end. Badal stresses the 'food plus' component in the policy on FDI in retailing suggested by her ministry would not be a backdoor entry for multinational entities such as Walmart, Tesco or Auchan. She said global retailers would only be allowed to set up shop if they put investment in the back-end, at the 'farm gate' level which would directly benefit cultivators.
"I put in a request that if besides their investment in retail, if they put some extra investment at the farmgate level, then the government might think of allowing them some small percentage of other home care products. I have made it clear that whatever investment they do at the farmgate level, some percentage of that they may be allowed to keep on other things, which also must be manufactured in India," she said.
Food accounts for about 70 per cent of India's $600-bn retail market. The government is looking at tripling this over the next five years, Badal said.
Major retailers had said they have an existing model which would cover items beside food, the minister explained. Only food does not manage to meet their costs. While the definition of 'food plus or non-food' and what all would be allowed in food plus has not been decided, Badal said it would mainly have home care and fast moving consumer goods, fully made in India.
"First of all, we have to see whether we allow it or not. I have sent suggestions and a note to the prime minister's office. Once the PM says yes to the suggestions, further details of the plan would be charged," she said.
On the percentage of non-food items to be allowed, MoFPI is playing it safe. "I have suggested that whatever investments they make in the back-end infrastructure, it should be around 20 per cent of that," added Badal.
According to the ministry, not only Walmart but other global entities such as Tesco, Auchan, Harrods, Partridges and Marks & Spencer had all shown interest in setting up shop in India if 'food plus' was allowed.
"I am pushing the policy (change). We have got a company like Auchan which has said that they would like to work with farmers. Our aim is that major companies tie-up with farmers," she said.
Govt plans Model Food Policy
The Ministry of Food Processing Industries has come out with a Model Food Policy which it has uploaded on its website for comments. It hopes that states will adopt a final policy before the World Food Fair. For the next round of 50-odd cold storages, approval for which has been sought by various companies, Harsimrat Kaur Badal said that she would do a proper satellite mapping of food and vegetable clusters before inviting expression of interests. BS Reporter