Course Code: MGN303 Course Title: Business Environment

Course Instructor: Atanu Bhattacharya

Academic Task No.: 2 Academic Task Title: Online
Date of Allotment: 16.08.2022 Date of Submission: 30.09.2022
School: Mittal School of Business (MSOB) Group No. : 2
-----------------------------------Group Details----------------------------------

Member Name Roll No. Reg. No.

Pankaj Mahanta RQ3E63A06 12001141
Roshan Satpathy RQ3E63A07 12003968
Vinay Sharma RQ3E63A08 12004313
Tanisha Arora RQ3E63A09 12004576
Shubham Kumar RQ3E63A10 12005216

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Marks Obtained: _______________ Max. Marks: ______________

Introduction to FDI
It has been argued by (Froot 1993) that in the time between 1980 and 1990 the
foreign direct investment has grown exponentially. There are major players in
the world such has Japan and America who hold highest share of money
borrowed from the Federal Reserve. FDI can be explained as a method through
which a country can borrow money from the World Bank for the development
of all the sectors in an economy. FDI has played an important role in the growth
of many developed and developing economies.
The speed of growth in the countries through FDI has shown that it has almost
tripled the growth in corporate sector. FDI by definition means the foreign
investment that benefits another country for example when a foreign investor
invests his money in another country in form of stock land or a new business the
part of the profit goes to the government which helps in the growth of a
countries economy. 
Food Sector in India and FDI
The Indian food sector is the largest sector in the country and the government
has allowed 100% FDI in the food sector, there are plenty of industries around
the world which has shown interest in investing in the food sector of India. The
entry route of FDI in the food industry is automatic and in the years from 1999
to 2008 the food industry export and import percent have increased to 17 to
19% at annual rate. The MOFPI has asked for 100 percent invested in the food
sector and the retail sector. The Indian food sector is export oriented and the
survey shows that the exports of India’s processed food were Rs. 31551.99
Crores in the year 2013-14.
The FDI is permitted in India through following forms of investments:
 Technical collaboration and joint ventures
 Financial collaboration
 Private placements or preferable allotments
 Capital market via Euro issues
An efficient food processing industry can provide several benefits such as:
 Reduction in wastages
 Increment in the farm gate prices
 Increment in income level of farmers
 Improvement in food security
 Value additions to food products
FDI ENTRY ROUTES INTO INDIA
This is primarily attributed to ease in FDI rules in India. India, today is a part of
the top 100 clubs on Ease of Doing Business (EoDB).FDI inflows in India stood
at $45.15 bn in 2014-15 and have consistently increased since then. 
Moreover, total FDI inflow grew by 65.3%, i.e. from $266.21 bn in 2007-14 to
$440.01bn in 2014-21 and FDI equity inflow also increased by 68.6% from
$185.03 bn during 2007-14 to $312.05 bn (2014-21).
India has attracted a total FDI inflow of $27.37 bn during the first four months
of F.Y. 2021-22 which is 62% higher as compared to the corresponding period
of F.Y. 2020-21 ($ 16.92 bn).
India received the highest annual FDI inflows of $84,835 mn in FY 21-22
overtaking last year’s FDI by $2.87 bn. Also, FDI equity inflow in FY 2021-22
were $ 59,825 mn.
FDI Equity inflow in Manufacturing Sectors have increased by 76% in FY
2021-22 ($ 21.34 bn) compared to previous FY 2020-21 ($ 12.09 bn). 
Total FDI inflows in the country in the last 22 years (April 2000 - March 2022)
are $ 847 bn while the total FDI inflows received in the last 8 years (April 2014-
March 2022) was $ 523 bn which amounts to nearly 40% of total FDI inflow in
last 22 years.
In FY 2014-15, FDI inflow in India stood at mere $ 45.15 bn, which increased
to $ 60.22 bn in 2016-17 and further to the highest ever annual FDI inflow of $
83.57 bn reported during the FY 2021-22.
Singapore (27.01%), USA (17.94%), Mauritius (15.98%), Netherland (7.86%)
and Switzerland (7.31%) emerge as top 5 countries for FDI equity inflows into
India FY 2021-22.
Top 5 sectors receiving highest FDI Equity Inflow during FY 2021-22 are
 Computer Software & Hardware (24.60%),
 Services Sector (Fin., Banking, Insurance, Non Fin/Business,
Outsourcing, R&D, Courier, Tech. Testing and Analysis, Other)
(12.13%),
 Automobile Industry (11.89%),
 Trading 7.72%
 Construction (Infrastructure) Activities (5.52%).

Top 5 States receiving highest FDI Equity Inflow during FY 2021-22 are:-
 Karnataka (37.55%),
 Maharashtra (26.26%),
 Delhi (13.93%),
 Tamil Nadu (5.10%)
 Haryana (4.76%)

Impact of COVID 19 on food and beverage industry

The COVID-19 pandemic has hit a majority of the Fortune one thousand
corporations, out of that several food and food corporations were hit because of
severe disruptions within the provide chain. The happening of the COVID-19
pandemic turned the food and food trade the other way up nightlong. There was
a big increase in in-home consumption; but, out-of-home consumption came to
a standstill. this variation resulted in a very large business downfall and halt the
Food and Beverage Industry. The new Omicron variant of the coronavirus is
poised to any hammer the Food and Beverage sector.

How has COVID 19 impacted the food supply chain?

At the onset of the COVID-19 pandemic, lockdowns were implemented in most
parts of the world to contain the expand of the coronavirus. The switch in
consumer behaviour and demand throughout the pandemic for the most part
wedged the availability and worth chain within the Food and Beverage industry.
The agriculture and F&B sectors were tasked to make sure the provision of
adequate food sources for the general public. The stakeholders within the food
provide chain were involved concerning the provision, accessibility, utilization,
and stability of food merchandise. Food accessibility was a extremely regarding
issue as supplying, distribution, and delivery obstructions for the most part
hindered the food provide chain.
The import and export of food merchandise were additionally affected because
of tariff and trade affairs and resulted within the disruption of food stock
handiness. The food provide chain was additionally wedged because of a
shortage of labour that resulted during a steep decline in industrial production.
Governments obligatory movement restrictions that semiconductor diode to a
large wastage of edible agricultural products, so interrupting the domestic food
provide chain. Consumers’ concern concerning the deficiency of retail products
led to desperate buying, resulting in temporary deficiency of food merchandise
at retail stores.
The food supply chain is additional at risk of the transmission of the
coronavirus thanks to many-sided activities concerned, like production, post-
harvest storage, packaging, and distribution. Thus, maintaining a secure food
provide is another herculean task. The food & drink business was mostly
wedged in developing countries thanks to the shortage of advanced IT and
transportation infrastructure. Food corporations that import raw ingredients
suffered the foremost thanks to movement restrictions and lockdowns. several
businesses determined to digitally remodel their operations to survive the
pandemic. However, this might not work for smaller businesses as adopting and
learning new digital tools was a problem for them. Hence, they'd to incur
additional losses.
Although COVID-19 vastly wedged the F&B business, it took all the businesses
on the trail of digital transformation, paving the means for higher potency and
lesser manual intervention. the utilization of technological solutions tried to be a
good strategy for assuaging the crisis.

How is Digital Transformation Helping the F&B Industry?

Unlike other industries, food manufacturers are less concerned with digital
transformation and consider acquisition costs before using digital tools.
However, more and more food manufacturers are realizing the benefits of
investing in digital technologies such as automation and IoT-enabled devices
and equipment. They now recognize that digitization is key to improving food
traceability and transparency in the supply chain, meeting rising consumer
expectations and ensuring food safety. Digital tools help food manufacturers
monitor and analyze data in real time, use intelligent insights to effectively
monitor operational processes remotely, and significantly reduce maintenance
costs.
Food and beverage testing labs face similar challenges. Growing consumer
demands and food safety concerns place increasing responsibility for food
safety on laboratories. Laboratories must efficiently test food samples and
provide accurate test results.
Food testing laboratories perform multiple tests on food samples, beverages,
packaged foods and feeds to test for food contaminants and more. Food testing
labs face multiple challenges every day that are compounded as the pandemic
progresses. Food testing laboratories ensure full traceability of processes,
produce valid, accurate and reliable test results, assure the quality of test results,
maintain test equipment, manage data, SOPs and documentation, Corrective and
preventive actions should be recorded.
The pandemic has accelerated the digitization of the food and beverage industry
at both operational and regulatory levels. A growing number of food
manufacturers and testing laboratories are using digitalization to advance their
operations and reduce their reliance on manual work. A key tool for automating
the process is the Laboratory Information Management System (LIMS).

Challenges and Solutions:

There are plenty of challenges the food industry of India has been facing despite
all the efforts and investment which are as follows:
 Inadequate cold storage and warehousing facilities.
 Inadequate skills sets at different levels in food processing industry
especially at operator and procurement levels.
 Absence of Comprehensive national level policy on food processing
sector
 Food Safety Laws & Inconsistency in State and Central policies.
 Lack of cold chain infrastructure
 Lack of government certified labs
 Inadequate focus on quantity and safety standard.
 Lack of product development and innovation
 Long and fragmented supply chain
Production Linked Incentive (PLI) Scheme
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has
given its approval to introduce the Production-Linked Incentive (PLI) Scheme
in Food Products for Enhancing India’s Manufacturing Capabilities and
Enhancing Exports – Atmanirbhar Bharat. Under the PLI Scheme the MoFPI
has approved 56 companies in Category-I, 13 companies in Category-II and 80*
companies in Category-III. *20 applications are common in category I and III
out of above 149 applications approved.
CONCLUSION
The food and beverage industry has been negatively impacted by the COVID-
19 pandemic. But despite the initial imbalance, the F&B industry has thrived
during the pandemic. Digitization has helped transform the industry into a
highly modern sector. The pandemic has also created challenges for food testing
labs as it has heightened public awareness of health and safety issues. But
Digital Labs found it easy to deal with the prevailing pandemic situation. Easy-
to-deploy, cloud-based food and beverage lab software helps food and beverage
labs quickly automate workflows without investing in IT infrastructure or
human resources, maximizing return on investment.