Punjab has proven that foreign equity in food retail with 100 per cent local sourcing can be a win-win formula for everyone, union Food Processing Minister Harsimrat Kaur Badal said in Mumbai.
"I still oppose FDI in multi-brand retail, but my demand is FDI with 100 per cent sourcing only in the agricultural sector," she said on the margins of the 'Make in India Week.' Walmart has 20 of its 25 outlets in Punjab and no kirana (grocery) shop has been driven out of business there, Harsimrat said, adding, "There is space for everyone to exist."
India currently allows - at least on paper - up to 51 per cent foreign direct investment (FDI) in multi-brand retailing. But no proposal has been approved as the current government has not yet firmed up its stand on the subject and continues to hold consultations.
Far from displacing small traders, foreign equity in multi-brand retailing will boost India's agro industry in a big way, the minister said. Harsimrat said the "sunrise sector" of food processing currently accounted for only two per cent of the perishable produce and needed to do much more.
"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," she earlier said.
India allows 100 per cent FDI in food processing except for alcohol, beer, and sectors reserved for small-scale industries.
