Decline in FDI in India’s Food Processing Sector in 2023-24 [Current Affairs]
Foreign direct investment (FDI) in India’s food processing sector experienced a significant decline of 30% in the fiscal year 2023-24, totaling Rs 5,037.06 crore, down from Rs 7,194.13 crore in 2022-23. This decline follows a series of fluctuating FDI levels over recent years, with previous figures including Rs 5,290.27 crore in 2021-22, Rs 2,934.12 crore in 2020-21, and higher amounts in preceding years.
Historical FDI Trends
- 2019-20: Rs 6,414.67 crore
- 2018-19: Rs 4,430.44 crore
- 2017-18: Rs 5,835.62 crore
- 2016-17: Rs 4,865.85 crore
- 2015-16: Rs 3,312 crore
Government Measures to Boost Investment
To enhance foreign investment in the food processing sector, the Indian government has implemented several measures:
100% FDI: Permitted through the automatic route subject to sectoral regulations.
Government-Approval Route: Allows 100% FDI for trading (including e-commerce) of food products manufactured or produced in India.
Licensing Exemptions: Processed food items are exempt from licensing under the Industries (Development and Regulation) Act, 1951.
GST Reductions: Lower GST rates for raw and processed food products, with over 71.7% of food products covered under lower tax slabs of 0% and 5%.
Export and Scheme Impacts
Export Decline: The export of processed foods dropped by 17% to USD 10,881.81 million in 2023-24 from USD 13,078.3 million in the previous fiscal.
Government Schemes
The Ministry is implementing several schemes to boost the sector:
- Pradhan Mantri Kisan SAMPADA Yojana (PMKSY)
- Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)
- Prime Minister Formalization of Micro Food Processing Enterprises (PMFME)
Source: currentaffairs by adda247
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