Food processing sector gets 576-crore FDI

NEW DELHI: The food processing sector attracted Rs 576 crore of foreign direct investment (FDI) in the first eight months of the fiscal as compared to total FDI of Rs 5,344.22 crore, minister of state for food processing industries Harish Rawat told the Lok Sabha on Tuesday.

In the thick of the recent food inflation, the government had also widened the scope of service tax exemption to include foodgrains and pulses in addition to fruits, vegetable, eggs and milk, the minister said. The Centre is keen on projecting FDI in the food processing industries, where 100% FDI is already allowed.

Besides attracting FDI through schemes like mega food park, the government has also extended several fiscal incentives during this financial year to enhance FDI in food processing sector, including full exemption from excise duty for specified equipments to preserve, store or transport apiary , horticultural, dairy, poultry, aquatic and marine produce and meat and its processing products.

Project imports status, with concessional rate of basic customs duty of 5%, has been granted for the initial setting up or substantial expansion of a cold storage , cold room (including farm pre-coolers ) for preservation or storage or an industrial unit for processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat.

While truck refrigeration units manufacturing refrigerated vans/trucks have been fully exempted from basic customs duty, exemption from service tax has been provided to a host of services. These include ‘erection, commission or installation’ of mechanised foodgrains handling equipment for setting up or substantial expansion of cold storage and machinery/equipment for initial setting up or substantial expansion of units for processing of agricultural, dairy, poultry , aquatic, marine or meat products.