The DIPP may put certain conditions for foreign investors in the Cabinet proposal for allowing FDI in food processing sector.

Officials of the Department of Industrial Policy and Promotion (DIPP) and Food Processing Ministry are discussing mutually agreeable conditions to be included in the proposal, an official said.

The development comes in the wake of Ministry of Food Processing asking to put a condition of investing 25 per cent of the foreign inflows for creating agriculture infrastructure in the proposal.

The original proposal sent to the Union Cabinet did not have any condition.

Food Processing Minister Harsimrat Kaur Badal is demanding that foreign players looking to invest in the sector would have to mandatorily invest a portion of their investments in building infrastructure at the farm gate level for the benefit of farmers.

The minister wants to put a condition of investing 25 per cent of the foreign inflows for creating agriculture infrastructure.

However, another official said that inclusion of any kind of condition in the proposal may hamper investments in the sector.

As per the original proposal, DIPP had proposed to allow 100 per cent FDI in marketing of food products produced and manufactured in India after approval from the Foreign Investment Promotion Board (FIPB).

The government is also likely to permit business-to-consumer online selling of food products produced and manufactured domestically.

Food processing sector has attracted $5,285.66 million FDI during April 2012 to December 2015.

The government had stated that FDI in food processing will benefit farmers, reduce wastage of fruits and vegetables, give impetus to the industry and create vast employment opportunities.

Overall FDI in the country had registered a growth of 29 per cent in 2015-16. It stood at $40 billion during the fiscal.

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