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POLICY INTIATIVES:
Since liberalisation several policy measures
have been taken with regard to regulation &
control, fiscal policy, export & import,
taxation, exchange & interest rate control,
export promotion and incentives to high
priority industries. Food processing and agro
industries have been accorded high priority
with a number of important relieves and
incentives. Some of the important policy
changes are as follows
REGULATION
& CONTROL :
The policy for distillation of alcohol has
been announced vide Press Note 4
(2006) according to which FDI upto
100% is permitted on the automatic
route for distillation & brewing of
alcohol
l h l subject
bj t tot licensing
li i b by th
the
appropriate authority.
No industrial license is required for almost all of
the food & agro processing industries except for
some items like: beer, potable alcohol & wines,
cane sugar, hydrogenated
h d t d animal
i l ffats
t & oils
il etc.
t
and items reserved for exclusive manufacture in
the small scale sector. Items reserved for S.S.I.
chutneys bread
include pickles & chutneys, bread, confectionery
(excluding chocolate, toffees and chewing-gum
etc.), rapeseed, mustard, sesame & groundnut
oils ((except
p solvent extracted),
), ground
g and
processed spices other than spice oil and olio
resins, sweetened cashew nut products, tapioca
sago and tapioca flour.
Use of foreign brand names are
f l permitted.
now freely i d
(Source-Food Processing Industries in India)
• EXPORT PROMOTION :
• Food processing industry is one of the thrust areas identified for exports.
Free trade zones (FTZ) and export processing zones (EPZ) have been set up
with all infrastructure. Also, setting
g up
p of 100% Export
p oriented units
(EOU) is encouraged in other areas. They may import free of duty all types
of goods, including capital foods.
• Capital goods, including spares upto 20% of the CIF value of the Capital
goods may be imported at a concessional rate of Customs duty subject to
certain export obligations under the EPCG scheme. Export linked duty free
imports are also allowed.
• Units in EPZ/FTZ and 100% Export oriented units can retain 50% of foreign
exchange receipts in foreign currency accounts.
accounts
• 50% of the production of EPZ/FTZ and 100% EOU units is saleable in
domestic tariff area.
• All profits from export sales are completely free from corporate taxes.
Profits from such exports are also exempt from Minimum Alternate Tax
(MAT).
•
• Ministry of Food Processing & Industries
• The Ministry of Food Processing Industries,
Industries set up in July 1988
1988, is the
main central agency of the Government responsible for developing a strong and
vibrant food processing sector; with a view to create increased job opportunities
in rural areas, enable the farmers to reap benefit from modern technology, create
surplus for exports and stimulating demand for processed food SUBJECTS
HANDLED BY THE Ministry:
The subjects looked after by the Ministry are :
• Fruits and vegetable
g p
processing
g industryy
• Foodgrain milling industry
• Dairy products
• Processing of poultry and eggs, meat and meat products
• Fish processing
• Bread, oilseeds, meals (edible), breakfast foods, biscuits, confectionery(including
cocoa processing and chocolate), malt extract, protein isolate,high protein food,
weaning food and extrudeM/other ready to eat foodproducts
• Beer, including non-alcoholic beer
• Alcoholic drinks from non-molasses base
• Aerated waters / soft drinks and other processed foods
• Specialized packaging for food processing industries
• Technical assistance and advice to food processing industry
CIFTI –A
A specialised
i li d body
b d for
f food
f d processing
i
Dedicated agri
g information centre on international news
and views –AIC
Dedicated
D di t d committees
itt on A
Agriculture,
i lt R
Rurall
Development, Water Management & Biotechnology
•Food industry the Largest Sector –Attracting the Largest
Multinationals in the World•Leading Countries Grabbing that
Share –U
U S,
S Canada
Canada, Australia,
Australia UK etc•Indian
etc Indian Processed Food
Industry -US $340 BillionIndian Processed Food Industry
Opportunity That The World PresentsIndian
Processed Food Industry Opportunity That The World
India’s Food Processing Industry -
highlights
Source: KPMG Research
Share in
world
trade –
1.7%
5th largest
Size – US$
industry in
70 billion Indian India
d
Food
Processing
Industry
Employs Low
1 6 million
1.6 penetration
people levels
composed of six key
segments
g
• High
g availabilityy of land – India
• Ranks first in availability of milk,
milk
ranks first in the world in irrigated
pulses and tea, and second in fruits,
land area and second in overall
vegetables, rice and wheat
arable land area
f bl factor
favourable f
conditions to enable
the food processing
sector to flourish
• Income
I tax
t rebate
b t allowed
ll d ((100 % off profits
fit ffor 5 years and
d 25%
%
of profits for the next 5 years) for new industries in fruits and
vegetables besides institutional and credit support
• Several
S l players
l h
have successfully
f ll ttried
i d outt contract
t t ffarming
i iin IIndia.
di ThThese iinclude
l d
MNCs such as Pepsi Foods