India Contemplates Opening Up Food Retailing

Foreign food retailers may soon be allowed to sell personal care products made in India up to 25 percent of their total merchandise sales. India’s Department of Industrial Policy and Promotion has for the first time endorsed this proposal. The idea behind the move is to encourage “organized” (mass market)  retailers to source goods made in India.

The excerpt below is from an interview that India’s  commerce and industry minister Nirmala Sitharaman had with the Economic Times:

Economic Times: On food retail, are you looking at allowing more products? Could we see some announcement soon?

Sitharaman: There is a lot of discussion on it. We are already talking about what is grown and [can be] value added in India. The food ministry is saying that you would need something more to attract consumers. He would want to buy other things as well, like cosmetics.

The Seattle-based online retailer, Amazon, sought government permission to enter the food retail business in India. It proposes to invest $570 million in over five years to sell third party and its own private-label food articles, sourced and packaged locally. Other applications received by the government in food retail are from Grofers and Bigbasket.

While a political consensus needs to be reached for further opening of the retail sector, the government is also examining the proposal of opening up Foreign Direct Investment for all goods manufactured in India.

Food Retail
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Posted on by Gunjan Bagla
Gunjan Bagla
California-based management consultant Gunjan Bagla runs Amritt, a consulting firm helping American companies to succeed in India. Amritt is the trusted advisor for India market research, India business development, India market entry, Global Engineering, Global Technology Scouting, India R&D and Open Innovation. Gunjan is author of "Business in 21st Century India: How to Profit Today from Tomorrow’s Most Exciting Market" (Hachette Book Group, 2008), Amazon's top rated title on the subject. He has appeared as the India Expert on BBC Television, Bloomberg TV, Fox Cable Business and has been quoted in the New York Times, the Los Angeles Times, the Hollywood Reporter and Business Week for his expertise on India.

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