Indian government has finally approved Amazon India’s proposed $500 million investment in food retail. The news comes a month after Food Processing Minister Harsimrat Kaur Badal stated that the government will soon clear the investment. The proposal was pending before the foreign investment promotion board (FIPB) which has been abolished now.
As per the proposal, the company will open a wholly-owned subsidiary in India to carry out the business. It will stock food products and sell online. Last year, the government allowed 100 per cent foreign direct investment (FDI) through approval route for trading, including through e-commerce, in respect of food products manufactured and produced in India. Amazon is the first company getting permission to bring in FDI into the food retail in the country.
The government had received investment proposals from three companies – Amazon, Grofers and Big Basket – worth USD 695 million 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.