The Government of India might consider allowing foreign direct investment (FDI) in food retail only if the companies agree to meet some mandated export obligations.

Food processing minister Subodh Kant Sahay, in a statement said: “We are considering a proposal to allow FDI in food retail. It will boost our agriculture and our farmers will also get benefits of economic liberalisation.”

Suggesting that FDI in food retail be allowed, the Ratan Tata-led Investment Commission report said, “Foreign food retailers could help in the transmission and adoption of better practices throughout the supply chain, and can also facilitate access to export markets.”

Agreeing with the report, Sahay said that there is a need to bring market discipline in procuring agro products from farms. “FDI in food retail is the need of the hour. Allowing FDI will create demand across all levels, from raw material to finished products,” he said.

The Investment Commission, set up by the Prime Minister in 2004 to boost investments, makes recommendations to the government on both policies and procedures to facilitate greater FDI inflows.