The government will soon clear the US retail giant Amazon's proposed $500 million investment in retail of food products in India, Food Processing Minister Harsimrat Kaur Badal said on Tuesday.
"There was some delay due to abolition of FIPB. It (Amazon's proposal) will soon be cleared," Badal told reporters on the sidelines of an event here.
With the abolition of the Foreign Investment Promotion Board (FIPB), the Amazon's proposal will now be vetted by the Department of Industrial Policy and Promotion (DIPP) under the Commerce Ministry.
Badal said that more investment in food processing sector is the need of the hour to reduce the huge wastage during post harvesting and transportation.
Despite India being the world's largest producer of vegetables and fruits, the processing level is very low at 10 percent, she said, adding that foreign investment will bring new technologies, products, processes and markets.
The government had received investment proposals from three companies - Amazon, Grofers and Big Basket - worth $695 million (roughly Rs. 4,472 crores) for retail of food products.
While US-based retail giant Amazon is one of the major e-commerce players in India, Grofers and Big Basket are into online grocery space. Amazon has proposed to invest around $500 million in retail of food products.
The government last year allowed 100 percent foreign direct investment (FDI) through approval route for trading, including through e-commerce, in respect of food products manufactured and produced in India.
In 2016-17 (April-December), the food processing sector in the country received FDI of $663.23 million.
The Union Cabinet last month decided to wind up the 25-year-old FIPB, which had been vetting FDI proposals requiring government approval, to expedite the clearance process.
Under the new mechanism, the proposals will be approved by the ministries concerned as per the standard operating procedure approved by the Union Cabinet.