NEW DELHI: Two years after allowing 100% foreign direct investment in food-only retailing ventures, where retailers are permitted t o sell locally produced food items through both offline and online channels, the retailing route has been virtually a non-starter or has received lukewarm response at best, according to sources.
According to government data, eight companies have filed applications under the route amounting to $700 million but sources said only a minuscule of the $700 million worth investments approved in the last two years has been actually invested by companies. US e-commerce giant Amazon’s investment, lion’s share of $515 million or over 73% of the total investment approved so far, is stuck due to ambiguity of rules and the high profile venture is yet to take off.
In an interview with ET earlier this month, Harsimrat Kaur Badal, the minister for food processing and the main advocate behind the food-only retailing, denied that the route has been a non-starter and listed out names of Amazon, BigBasket and Grofers among investors through the channel.
ET had reported earlier this month that the 100% food retailing subsidiary Amazon Retail India has infused Rs 10.5 crore into the company according to its regulatory filings.
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Grofers, that had earlier pledged to invest $40 million FDI in the space, said it has invested around Rs 35 crore so far through the approval it received under the food-only venture. BigBasket declined to say how much the grocery company has invested through the route even as it received green signal from the Department of Industrial Policy and Promotion (DIPP) last year but the Bengalurubased company had reportedly pledged to invest Rs 100 crore.
Other investments include Rs 10.9 crore of hyper-local milk and breakfast items delivery firm Supr Daily, Mountain Trail Foods (that operates tea bar chain Chai Point), MTR Foods, Rs 25 lakh proposal by Enayat Enterprise and Waycool Foods.
Amazon Retail India has been running a pilot in Pune for months. However, sources say, the operation is merely an extension of Amazon India’s online grocery retail initiatives Amazon Now or Amazon Pantry with the only difference being bills are in the name of Amazon Retail India, the FDI entity.
