India on Monday allowed 100 per cent FDI in multi-brand retail of food products manufactured or produced in India. However, FDI proposals in this sector will need FIPB approval.

“It has now been decided to permit 100 per cent FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India,” said a senior government official.

“Permitting food products manufactured in India to be offered through FDI in trading and e-commerce will help bring in more investments into the food retail chain and increase production in the organised sector,” said apex industry chamber CII, director general Chandrajit Banerjee.

While the BJP government is against FDI in multi-brand retail, it has allowed it in processed food to bring more investments into the food retail chain and increase production in the organised sector. It is in line with the Modi government vision to double farmers income by 2022 by boosting farming and allied activities.

While FDI in food processing was announced in the Union Budget, its notification had been delayed may be due internal differences. Earlier, food processing minister Harsimrat Kaur Badal had demanded that foreign players, who were planning to invest in the sector, should mandatory invest a portion of their investments in building infrastructure at the farm gate level. The minister was pitching for a condition that 25 per cent of the foreign inflows should be invested in creating agri infrastructure.

However, DIPP secretary Ramesh Abhishek said that 100 per cent FDI has been allowed in marketing of food products without any condition.