More than 100 food companies met Union Commerce and Industry Minister Piyush Goyal and Food Processing Industries Minister Chirag Paswan on the first day of World Food India. These companies include Britannia Industries, PepsiCo India, Haldiram and ITC. This closed-door meeting lasted for more than two hours. Its purpose was to discuss the concerns faced by the food processing industries.
Which issues were discussed?
Paswan said after the meeting that the purpose of this CEO roundtable is to provide a platform to the representatives of food companies through which they can put forward their concerns and suggestions to the government. He said that there are many concerns related to ease of doing business. The departments related to these issues will now try to find solutions.
He stressed the importance of promoting state-level food processing companies to help make India a global hub for food products. Taxation, subsidy and regulatory challenges were discussed. During the meeting, company officials sought clarification on the existing customs duty.
Concerns were also expressed about the PLI scheme
People familiar with the matter said some companies had raised concerns about the Production Linked Incentive Scheme after being denied subsidies due to a change in rules. An executive, speaking on condition of anonymity, said the government had changed the rules midway. It has barred companies from using imported raw materials to qualify for benefits under the PLI scheme.
Regulations are adversely affecting many businesses. The executive asked the government to discuss such changes before implementing them to avoid any potential problems.
Under the scheme, the government provides financial assistance to manufacturers to expand the reach of Indian products in international markets. However, they have now stopped reimbursements through distributors. An executive of a packaged food company said that there is a shortage of legal entities in the country.
So how can they pay the local agencies. This has troubled everyone involved. A solution is expected in the coming weeks. Another important issue was the ban on wheat export. The companies demanded a reconsideration of this.
CEOs have raised concerns about the recent increase in import duty on refined edible oil and the possible impact on sales. A top company official said that if they do not increase prices, they may suffer huge losses. Therefore, the government is being asked to reconsider.
Some CEOs demanded reduction of GST on breakfast cereals from 18% to 12%, which is applicable on butter, ghee and packaged fruit juices. Paswan assured that the ministry will emphasize these points in the GST Council. However, he further said that the final decision on GST rests with the Council.
