Few Takers

New Delhi, May 29: The agro-based industries have managed to attract foreign direct investment (FDI) worth Rs 724 crore between January 2002 and December 2004, of which Bengal’s share is a mere Rs 4.92 crore.

According to the state-wise data compiled by the commerce ministry, Maharashtra with Rs 398 crore worth of FDI approvals during this period figures at the top of the list followed by Karnataka with Rs 100 crore.

Tiny Himachal has succeeded in attracting Rs 52.5 crore, while Tamil Nadu and Delhi came next with Rs 44.6 crore and Rs 43.32 crore FDI inflows respectively.

Interestingly, Punjab, the nation’s leading agricultural state, could get only one FDI proposal during the two-year period entailing a negligible investment of Rs 0.01 crore. However, Chandigarh, which is listed as a Union territory and is the capital of both Punjab and Haryana, attracted FDI worth Rs 25 crore. This investment has the potential of benefiting farmers in both states.

The sector-wise analysis of the data reveals that food processing industries attracted the highest FDI with 101 proposals involving an investment of Rs 573.5 crore, followed by vegetable oil and vanaspati with Rs 71.84 crore FDI. Tea comes next with an FDI inflow of Rs 68.82 crore. The sugar industry figures at a poor fourth slot, being able to attract only Rs 9.87 crore investment.

While some multinationals have invested in processed fruits and vegetable industries, their investments are small given the fact that India is the second largest producer of fruits and vegetables in the world.

These multinationals confer the advantage of introducing the latest technology both in processing and packaging, which is considered essential for marketing agro-goods in overseas markets. Their strong brands also make it possible to tap the lucrative western markets.

Domestic players, too, would end up adopting higher technologies as a part of the powerful display effect and enable the country to boost exports.

Given the fact that exports have to contend with the stiff quality control norms set by the European countries and the USA, it has become imperative to have the latest techniques to process the agricultural produce.

India has been criticising some of these measures as non-tariff barriers that have been deliberately put in place to stop exports.

However, it cannot be denied that consumers in advanced countries are extremely particular about the quality of their food.