Finance Minister Arun Jaitley today announced that 100 per cent foreign direct investment will be allowed in the retail of domestically processed food in order to give an impetus to the country's farming sector.
In his budget proposals for the financial year 2016-17, presented in the Lok Sabha, Jaitley said the approvals for such projects would be routed through the Foreign Investment Promotion Board (FIPB).
The move would enable retailers such as Marks & Spencer, Tesco, Walmart, and IKEA to set up food-only retail outlets.
This was the main demand of Food Processing Minister Harsimrat Kaur Badal.
Last month, the Ministry of Food Processing Industries had urged Prime Minister Narendra Modi to consider 100 per cent foreign direct investment (FDI) in multi-brand retail of food products, saying it would benefit farmers as well as common man.
"It will benefit the consumer by reducing inflation, will reduce wastage, increase availability of fresh and processed variety of food at a stable price, and improve farming technology," Badal had said this month,while writing to the Prime Minister's Office to consider her request.
The move would benefit farmers with increased price realisation, reduction in wastages, job creation, besides acting as an incentive for global players in the sector to start operations in India, she wrote.
With inputs from PTI