Food retail firms need to maintain separate books of accounts, inventories, says govt

New Delhi: Food retail firms having foreign investments will have to maintain separate books of accounts and inventories in warehouses, the government has clarified. Currently, the government permits 100 percent foreign direct investment (FDI) in the food processing sector, under approval route. 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. [caption id=“attachment_3460520” align=“alignleft” width=“380”] Representational image. Reuters[/caption] It is clarified by the Department of Industrial Policy and Promotion (DIPP) that “business of food product retail trading is required to be kept distinct and separate from other businesses, if any, of the investee company by way of maintenance of separate books of accounts and records (including sales records), separate bank accounts, and separate invoicing”. It also said that inventory of the business of food product retail trading should be kept physically separated and readily distinguishable from inventory for any other business of the investee company in the front end or in the warehouse. “However, this requirement does not preclude usage of the same storage/warehousing facility and associated infrastructure /manpower for different businesses of the investee entity,” it added. The government had approved American e-commerce major Amazon’s proposed $500 million investment in retailing of food products in India. Online grocery firm Grofers too has received government’s nod for retailing food products in India.