The Government of India is mulling to allow foreign direct
investment (FDI) in online retailing of food products. Discussions
regarding expansion of definition of food to include grocery also
took place at a recent meeting of senior Government officials and
The objective of the budget proposal for foreign investment in
food retail was primarily to benefit the food processing industry
and farmers. However, food earns one of the lowest margins for
retailers, an issue that has been plaguing the industry.
Within online, fresh produce accounts for almost 20% for
BigBasket and as much as 30% for Grofers, while packaged food
products contribute another 35-40% of total sales (Bigbasket and
Grofers are among the largest food e-tailers in India). While
selling food products would help farmers and small business,
retailers will have to look at other groceries and household
products to earn profit and remain sustainable.
Last week, the Department of Industrial Policy and Promotion
(DIPP) notified that 100% FDI is allowed only in Business to
Business (B2B) e-commerce marketplaces and not inventory-based
models, where inventory of goods and services is owned by
e-commerce entity and is sold to the consumers directly.
It is being speculated that this new policy of 100% FDI in B2B
e-commerce marketplaces could now pave the way for e-commerce
grocers, especially those that have inventory-based models such as
The e-tailers seem enthusiastic about the new policy and
awaiting clarifications on finer details.
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The Union Cabinet on 31 August 2016 has approved the scheme for grant of Permanent Residency Status to foreign investors subject to the relevant conditions as specified in the FDI Policy notified by the Government from time to time.
In India, All India Radio – the public service broadcaster, had monopoly on Radio Broadcast, till a couple of years back. In May 2000, the Government of India opened the Sector for participation by the private FM broadcasters and offered 108 frequencies in 40 cities for open tender bidding. At present, 21 private FM stations are on the air in 12 cities.
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