The Indian government needs to hasten various policy and regulatory reforms like right compensation for land acquisition, liberalization of FDI in multi-brand retail, implementation of Good and Service Tax (GST) and 'Green Channelling' for agri produce to push India-UK collaborations and investments in food supply sector where huge opportunities and potential remain to tapped fully, reveals a report.
According to the report, 'India-UK Collaborations and Investments in Food Supply Chain, "For last three-four years the government is struggling hard to bring in much awaited reforms in agriculture and food processing sector."
But the progress is slow because reforms in these two sectors touches majority of the population. We still do not have unified or national market. Marketing system has to improve very fast if we want farmers, who are in distress, to get better price," said Siraj Hussain while releasing the report.
"Food Processing Industries require last mile reform- that is in retail. Modern retail is very important. The government has allowed 100 percent FDI in Food or Agri, however we are struggling to take it to investors. We need unified and national market for agri produce. With National Agriculture Market in place, I hope things will move faster for the sector. The report is very timely and would help in attracting foreign as well as domestic investments," he added.
It is also pointed out during the survey that along with transport infrastructure, there is a need to construct truck docking stations in fuelling stations along the national highways and state highways.
Highlighting the key findings of the Report Dipankar De, Partner, D and B Tangram says, "The logistics and supply chain performance is currently impacting India's global competitiveness by increasing operating costs and capital expenditures, delays and unpredictability, reduction in overall business activities and restricting potential integration with global value chains."
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The Study focuses on five areas of the food supply chain, namely storage and warehousing, cold-chains, packaging technology, skill development and research and development. It provides an overview of each of these segments in India and the UK, examines the regulations, identifies the areas of collaborations and identifies the barriers faced by the UK companies in India.
Food and Drink is a priority sector for the UK government in its trade and investment with India. The report charts out clear action points for UK Trade and Invest (UKTI) and UK India Business Council (UKIBC) to increase awareness and market understanding of the UK companies and work collaboratively with the centre and state governments in India to enhance India-UK trade and investment in food supply chain.
It observes that all these measures and initiatives are likely to attract foreign companies, including companies from the United Kingdom (UK), to invest in India's food supply chain.
The food supply chain in India is fragmented, and is characterized by the presence of a large number of unorganized operators in each segment. As a result, transportation costs in India are very high and so are the wastages involved in food transport due to mishandling, lack of storage facilities, etc.
Dr. Arpita Mukherjee, Professor, ICRIER and one of the authors of the report says skill development through joint efforts would be a critical component in pushing the sector through collaborations with UK companies and research and development also needs to be a focus area.
Commenting on taxation, she says, "Multi-layered taxes and variation of taxes across states make it difficult to have a pan-India pricing and hub-and-spoke model of operation."
Other recommendations made in the reports were better centre-state coordination, infrastructural support, corruption free administrative machineries, Skill Development and policies should be directed towards investment in better technology, clean technology, and connecting farmers to the global markets, among others.