Finance Minister Arun Jaitley has continued the Government’s endeavor in strengthening the Food Processing Industry of the Country. Budget 2016- Major Boost to Food Processing Industry.

In the budget speech he announced a bold initiative of allowing 100% Foreign Direct Investment (FDI) through FIPB route in food products which is produced and marketed in India. This will encourage foreign direct investment in this sector which must be welcome news for the Industry and the Startup community related to the sector. Global leaders like Del Monte and Ferrero has already shown significant interest.

 

The Industry has been a focus area of the Government’s Make in India initiative. The Government has already opened 5 Major Food Parks in the country and have announce a target of opening 42 Food Parks by 2019.

 

Right from the starting the Government has acknowledged the huge potential of this sector. As per the Government records this sector is growing at a rate of more than 8% per year and contributes to around 9.8% in the GDP of the Manufacturing sector. India is already the 6^th largest exporter of agricultural products and with its strategic geographic location, demographic dividend and close proximity to food importing nation the sector is poised for further development.

 

FM admitted the fact that there is a huge potential for growth and this proposal shall have social and financial impact on this sector. Thus he went on to add, “This will benefit farmers, give impetus to the food processing industry and create vast employment opportunities.”

 

The government has previously announced various tax soaps and has promised further innovative initiative which shall boost the sector. Thus, it can be said this sector can only grow and people associated with it will be significantly benefitted.

 

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