Flipkart looks to re-apply for food retail licence

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Published: June 2, 2020 1:30 AM

The government has rejected Walmart-backed Flipkart’s proposal to enter the food retail business citing regulatory issues, according to media reports.

Last year, Flipkart had registered a new entity — Flipkart FarmerMart — to undertake retail trading of food products in the country.

Flipkart on Monday said it intends to re-apply for obtaining a licence to undertake food retail in the country and is “evaluating” the Department for Promotion of Industry and Internal Trade’s (DPIIT) response.

The government has rejected Walmart-backed Flipkart’s proposal to enter the food retail business citing regulatory issues, according to media reports.

Last year, Flipkart had registered a new entity — Flipkart FarmerMart — to undertake retail trading of food products in the country. According to the company’s memorandum of association, the entity proposed to carry on the business of retail trading of food products manufactured and produced in India through offline and online distribution and other sales channels (by way of e-commerce through web, mobile or any other online channel). It also intended to invest in and set up infrastructure throughout the country and provide all other ancillary services for seamless business operations.

Rival Amazon already undertakes food retail in the country through subsidiary Amazon Retail India (ARIPL). In 2017, the firm received government’s approval to invest $500 million in retailing food products in India.

“At Flipkart, we believe that technology & innovation driven marketplace can add significant value to our country’s farmers and food processing sector by bringing value chain efficiency & transparency. This will further aid in boosting farmers’ income & transform Indian agriculture,” the company said in a statement.

The government permits 100% foreign direct investment (FDI) in the food-processing sector. As per norms, a foreign company can open a wholly-owned subsidiary in India to retail food products produced and or manufactured in the country by way of opening stores or online.

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