Bhatnagar who was addressing the sectoral session on agri business, food processing and packaging organised by FICCI and IIC at the Global Indian Entrepreneurs Conference in the Capital on Friday, said that since the initiation of economic liberalisation in the country in 1991, foreign investment in the food processing sector has been only in areas of potato chips, soft drinks, liquor and chewing gum. He, however, ruled out the possibilities of inviting foreign investments in bread, biscuits and confectioneries which are reserved for the small sector.

Bhatnagar stated that the government welcomed investment in food processing including grain milling, meat, fish processing and particularly vegetables and fruits and egg processing which are extremely competitive. The Centralgovernment is also keen on the growth of export oriented units, development of cold chains and refrigerated transportation.

He said that his ministry is taking up a number of issues for boosting the food processing sector with the finance ministry. These include fiscal incentives and tax deductions on certain cereals, processed food and vegetables and dairy products. Conceding that the food processing industry is facing a number of problems due to lack of adequate finance and high cost of capital, he said that his ministry is working out a number of strategies to overcome these difficulties.

The NRIs present at the meeting called for removal of red tapism and bureaucratic delays which have frustrated foreign investment in the sector. The food processing secretary assured them that the government had already adopted the policy of automatic approval for 51 per cent foreign equity alongwith a single window service system.

Speaking on the occasion, Gokul Pattnaik, the former chairman of APEDA stressed theneed for backward and forward integration by the industry. He said that in the present conditions prevailing in the country, it is advisable for the industry to go for contract farming.

RC Suresh, chairman, Golden Fries Ltd, said there is a great export market potential ready for tapping provided we produce quality products of global standards and adopt international packaging norms. Countries in the Middle-East, CIS and far east are now importing almost one million tonne of frozen whole dressed chicken. A major chunk is exported by Brazil followed by France and Denmark. Hans Hannaart, MD, Robo India Finance Ltd called for setting up of more food units with appropriate technology for low cost of production.