The government has received investment proposals from three companies, including Amazon and Grofers, worth $695 million (roughly Rs. 4,546 crores) for retail of food products in India under the new FDI policy.
"Three companies Super Market Groceries Supplies (Big Basket), Grofers India and Amazon Corporate Holdings have submitted their proposals for seeking permission to make investment of $695 million over a period of time," an official statement said on Thursday.
The government had last year allowed 100 percent FDI for marketing, including through e-commerce, of food products manufactured and produced in India.
Earlier in the day, Food Processing Minister Harsimrat Kaur Badal announced that Amazon has decided to invest about $500 million (roughly Rs. 3,272 crores) in e-retail of food.
"We allowed 100 percent FDI in trading of food products last year. We have got some good news. Amazon has now decided to get into e-retail of food. Amazon has decided to invest close to $500 million in the food retail sector. It is a good news for the country," Badal told reporters in New Delhi.
Amazon is keen on food retailing through online portal as well as brick-and-mortar outlets, she said.
Besides Amazon, she said Grofers and Big Basket have also submitted FDI proposals for undertaking retail trading of food products, while Metro Cash & Carry has also shown interest in food retailing.
Asked about allowing non-food products in the FDI policy, she said the government will take a decision on this issue soon. Some foreign retailers have demanded that India should allow sale of home and personal care products.
The minister said the government's new FDI policy is very "attractive" and is generating huge interest among investors.
Asked about the total investment expected from Amazon, Grofers and Big Basket, Badal said it will be upward of $500 million.
E-retail market is growing at a fast pace and is set to treble by 2020, the minister said.
While Amazon is one of the major e-commerce players in India, Grofers and Big Basket are into online grocery space.
"We are excited about the opening of FDI in food retailing. We have submitted an application for approvals," Amazon's Director Public Policy Avinash Ramachandra said.
Calling food processing as sunrise sector which is growing at over 7 percent, Badal said the government is setting up mega food parks, cold chain projects and plans to establish a National Food Grid to boost processing level of farm produce and reduce wastages by compressing gaps in supply chain.
The food processing sector received $5.76 billion (roughly Rs. 37,699 crores) in FDI equity inflows from 2010-11 to 2015-16. In 2016-17 (April-December), the food processing sector in the country has received $663.23 million (roughly Rs. 4,341 crores) worth of FDI equity inflows.