What India’s Budget 2019 means for the Food and Drink Sector?
The Indian Union Budget 2019-20 was presented by Finance Minister Nirmala Sitharaman in Parliament last week and among other things, it draws-up a long-term vision for India’s food and drink sector.
This is a vision very much focused towards boosting infrastructure, self-sufficiency, and the domestic ease of doing business for food processing industries dependent on agriculture. From this outlook we can more clearly frame the sector highlights from the Budget including easier local sourcing norms for Foreign Direct Investment (FDI) in single brand retail, targeted logistics-orientated infrastructure spending, aspirations to form 10,000 new farmer Producer Organisations, and a hike in the basic customs duty for select food such as cashew kernels and fatty acids.
The UK India Business Council welcomes the Government’s farsighted ‘Minimum Government Maximum Governance’ campaign with the aim of significantly improving compliance and bureaucratic procedures. At the State and District level, this can cause significant issues for our food and drink members on a day to day basis, particularly for the alcoholic beverages market. As such, we are hopeful that the campaign vision will be translated from the Federal to the State, and even District, level in order to accrue benefits for the food and drink sector in the long-term.
On the customs side, it seems the changes in customs duties for raw materials and capital goods are principally aimed at encouraging the ‘Make in India’ initiative. Whilst we support the ‘Make in India’ campaign we also urge the Government to consider lowering the basic customs duty on food and drinks to boost consumer access to high-quality and much sought after international food brands. This access for imports will lead to increased investment in the medium-term from leading international food and drink organisations.
We look forward to working with the Government of India and our members to deepen and widen collaboration that will yield distinct benefits for both countries, reinforcing a partnership that can help India succeed in becoming a USD five trillion economy.
If you would like to find out more about UKIBC’s work supporting food and drinks companies between the UK and India, please get in touch with our Sector Advocacy Manager, Shubhi Mishra, at email@example.com