Title: India’s Food Processing Industry Attracts Billions in Foreign Investment, Offers Tax Benefits for Entrepreneurs

Since 2014, India’s food processing industry has been a hotspot for foreign direct investment, with more than Rs430 billion pouring into the sector. This presents a lucrative opportunity for entrepreneurs returning to India, looking for a business with long term growth prospects and tax benefits.

With a population of 1.4 billion, India offers endless opportunities in the food-related businesses. A recent food processing exhibition in Delhi highlighted the industry’s sustainability, as a large quantity of agricultural produce is still wasted every year. Additionally, the export potential for processed food is immense, with exports increasing from Rs.300 billion in 2014 to Rs1 trillion in the last financial year.

The industry is also one of the largest employers in the registered manufacturing sector, contributing over 12 per cent in total employment. Small and medium scale sectors have also fueled the industry’s growth, with seed capital and bank loans on the rise each year.

Entrepreneurs in the food processing business can also benefit from tax exemptions. Profits and gains derived from processing, preservation, and packaging of fruits or vegetables are exempt from income tax for the first five years, followed by a 30 per cent exemption for additional five years.

In other news, Indian companies are now permitted to list their shares on foreign stock exchanges, providing an opportunity for global investment. While the foreign investors are not subject to capital gains tax, resident Indians and Indian companies are liable for tax in India on profits from shares traded globally.

However, entrepreneurs should proceed cautiously, as companies listed on foreign bourses will have to adhere to more stringent statutory compliances than usual in India. This can present a challenge, especially for lesser-known Indian companies.

For entrepreneurs involved in trading businesses, it’s essential to stay on top of tax assessments and notices. Failure to respond to tax demands can lead to the freezing of bank accounts, as recent Supreme Court rulings support the tax authority’s actions.

In summary, India’s food processing industry continues to attract foreign investment and offers tax benefits for entrepreneurs in the sector. However, entrepreneurs must carefully navigate the legal and tax requirements to ensure a successful business venture.