United States’ retail biggie Amazon has been interested in investing in retail of food products in India for sometime now. And according to latest reports coming in, the Indian retail sector is rife with rumours that Amazon is on the brink of getting an official stamp of approval from Indian authorities on the matter.
Amazon’s proposal to invest US $500 million in retailing food products in India had earlier been pending with the Foreign Investment Promotion Board (FIPB), which was recently dissolved by the government. Now, with FIPB abolished, Amazon’s investment plan is with the Department of Industrial Policy and Promotion (DIPP) which is expected to give its go-ahead Amazon anytime now.
Prior to the abolishment of FIPB, the DIPP under the Indian commerce and industry ministry had already cleared Amazon’s investment and sent it to the FIPB for the final approval. But, with FIPB out of the picture, the road ahead looks smooth for Amazon.
The 25- year-old FIPB, which was responsible for vetting FDI proposals requiring government approval, to expedite the clearance process, was dissolved by the Union Cabinet last month as it was decided that the proposals will now be approved by the ministries concerned as per the standard operating procedure approved by the Union Cabinet.
According to an ET report, the Indian government had initially got investment proposals from three companies- Amazon, Big Basket and Grofers -worth a whopping US$ 695 million for retail of food products in the Indian subcontinent.
US-based retail giant Amazon is already giving a strong competition to homegrown Indian e-commerce giant, Flipkart, which currently acquires the numero uno position in the e-commerce market. Big Basket and Grofers are basically mainly into the online grocery space.
The proposals are a result of the Modi government allowing 100 per cent foreign direct investment (FDI) through approval route for trading, including through e-commerce, in respect of food products manufactured and produced in India last year.
According to Food Minister Harsimrat Kaur Badal, FDI inflows brings with it new technologies, products, processes and markets. In 2016-17 (April-December), the Indian food processing sector received FDI of US$ 663.23 million.