India the food factory of the world

India the food factory of the world
India the food factory of the world

Harsimrat Kaur Badal is the Cabinet minister for food processing industries in the Narendra Modi led NDA government. 'India Investment Journal' caught up with the Shiromani Akali Dal MP from Bathinda in Punjab during a recent visit to London for an exclusive interview. What brings you to the UK This is basically to promote the latest policy that our government announced in the Budget of 2016, which was to allow FDI (foreign direct investment) in multi-brand retail of food grown and manufactured in India. For the first time we are opening up our retail market for the world giants to come in and organise our retail sector, which is only organised to the extent of 2 per cent and the bulk of it remains unorganised. There has been a lot of global interest by many companies. As far as processing is concerned, we are at a very nascent stage where we process only 10 per cent of our food but we are one of the largest producers of food items in the world - No. 1 in milk production, No. 2 in fruits, vegetable and cereal production, No. 3 in marine production. We have a very large raw material base but we are very small as far as processing that food is concerned which in turn leads to very high wastage of food in India. This results in low remuneration for the farmers and high prices for the consumers. So one of the focus areas of this government in the last two years is to create infrastructure for processing so that the demand for processing goes up and the demand for the farmers' products will go up and they will get better remuneration. It will help bring down wastage and give consumers better rates and thereby control inflation. What are some of the key steps take in the field of food processing We have been giving a number of incentives for this ever since the government came in, including cheaper credit through NABARD [National Bank for Agriculture and Rural Development], priority sector lending, various tax incentives and many schemes for processing. There is a realisation that only once the retail sector is tied up that there will be a push for the manufacturing sector, which will benefit farmers and generate employment. That is what brings me to the UK - to speak to all the big retail giants to come and Make in India, not just for India but we are looking at making India the food factory of the world because that is the kind of raw material base that we have. Out retail sector in India is currently around $600 billion, which is expected to hit almost $1.3 trillion by 2020. We are clearly growing at a very fast pace. For all the exports that we have, food retail accounts for about 12 per cent of those. What was the response from the UK We met all the top chains here including Sainsbury's, Marks & Spencer, Tesco, Partridges, Waitrose, Holland & Barrett, Harrods. Everyone has shown a lot of interest in either in coming to India or tying up with local people and even sourcing from India. We are hoping to hold a World Food Summit alongside the Vibrant Gujarat Summit in Ahmedabad in January where we have invited all these representatives to come and make a common platform of stakeholders of the processing industry, farmers, retail, state governments, nutraceuticals, the entire gamut of the food industry and encourage B2B meetings so that it can attract FDI. India is not just the fastest growing economy in the world but also the top destination for FDI. We have got the maximum amount of FDI into India in the last six-eight months. The government has taken a lot of policy initiatives to Make in India, which is attracting a lot of interest worldwide. Were there issues that these companies flagged up in terms of investing in India This multi-brand FDI is very specifically for food manufactured in India. So it works for Simply Food of M&S, which does only food, but Tesco does various other things. But we were clear on our policy that they are most welcome to start with food because it is growing really fast. We have this huge population of under 25 year olds living largely in the urban areas looking for ready to eat, ready to cook products from big retail outlets where they can have the entire variety and choice. E-commerce in food retail is growing way faster than they can even cope. There is a lot of potential in a lot of these areas. It doesn't necessarily have to be a model that has already been used in a different part of the world. This can be a different model - an India-specific model. The mind-set of an average Indian is different - we look for cooking fresh every day; we don't tend to store for the entire week or month in huge freezers or cook once a week and refridgerate. That's not the culture in India. The western market is plateauing and we are a growing economy and growing middle class. Is there a generally positive outlook towards Make in India They were all familiar with the market and they all see the scope and potential in India. A lot of them were keen on coming into India to see what they could source from India for their stores in the UK and other countries. There were some questions regarding regulations, especially with FSSAI [Food Safety & Standards Authority of India], which we have worked very hard to overhaul entirely. It was good for me to get to know the issues that they may be facing or may think there might be in India but most of them were very interested in tying up with local people before they launch on their own. That is a good thing for us, because we are also looking at Make in India. And if you Make in India, with the Indians there's nothing like it. The whole focus of the government is towards benefiting our farmers, ensuring better prices to our consumers and promoting the food processing industry. So retail is just a part of the picture that we are trying to cover in the entire agriculture landscape. Looking at the future, they were all planning for Brexit and India is part of those plans for all of them. What sets your own state of Punjab apart in terms of FDI The World Bank has ranked Punjab as best destination in ease of starting up a new business. One of the main reasons for that is that our government has started an Invest Punjab board, which has one CEO and representatives of every department required for clearances, all under one roof. There is a single window, a single CEO with a single email ID and phone number and all clearances are given within 30 days of your application. The government has also given a lot of incentives to attract industry - food processing is free of all taxes, any new industry can keep its VAT for next 10 years, power tariffs are cheapest in the country and for a new business for the next 12 years, we guarantee no increase in power tariffs. A lot of states are competing with each other and giving investors an environment which is very lucrative to invest. The government of India is doing its bit by repealing old and obsolete laws - as many as 1,174 repealed, paperwork has been reduced, transparency is the thumb rule, no retrospective and regressive taxes. Every state government is doing its bit in attracting investments. Punjab is getting set for elections early next year; what is your outlook/message The SAD-BJP government in Punjab created history by bringing in a government a second time, where a sitting government had never been voted back into power. Not only were we voted back but we were voted back with a bigger majority than what we had come in with the first, which made history. The reason for that was that we have been very clear about our agenda from the day that we asked people for their votes - which was development, development and yet more development. In the last 10 years, there is not a single Punjabi in any city or any village who would say that development has not happened. To put things simply, in a state where most of the cities had no drinking water, sewer system, each and every city - big or small, tier 1 or tier 2 - every city has a water system in place or in the process of completion. We were a power deficit state, we are a power surplus state; the revenues of the state have gone up three times; we have three international and five domestic airports; the entire infrastructure has been upgraded. Take any sector, in education - we were 14th when we took over, today we are 2nd in the country. Alongside, we have ensured welfare schemes for the poorer segments of society. Punjab is the only state where water and electricity for farming is given totally free of cost, which is a huge support to farmers. These kind of concessions have only been given in Punjab whenever an Akali Dal government comes in. For the future and progress of Punjab, this government has worked very hard. A lot has been done, there is always a lot more that needs to be done. I am very confident that we will do a hat-trick and for the third time, the government will come back yet again.

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