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Policy · Commerce & Consumer Brands

Bigbasket gets FDI nod for food retail

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BigBasket logo
Date
Company
BigBasket
What it does
Online grocery delivery service
Kind
Policy
Amount
₹100 Cr
Sector
Commerce & Consumer Brands

What they do

Bigbasket is an online grocery delivery platform

What happened

It received government approval for 100% FDI in food retail and plans to invest ₹100 crore

Why it matters

The approval requires a separate entity for food products made in India, following a policy change; competitors like Grofers and Amazon India also received…

The details

  • Bigbasket received government approval for foreign direct investment (FDI) in food retail.
  • The company must create a separate entity to retail food products manufactured or produced in India.
  • Bigbasket committed to invest around ₹100 crore in this new venture.
  • The company has yet to begin work on the finer details of its business plan.
  • Bigbasket had applied for FDI approval in September 2016.
  • Co-founder Hari Menon provided a statement on the status of the approval.
  • The government permitted 100% FDI in the food processing sector a year ago.
  • Under the new rule, foreign companies can open wholly-owned subsidiaries to retail food products made in India.

The bigger picture

  • The government aims to encourage organised retailers to source directly from farmers and reduce the role of middlemen.
  • Competitors Grofers and Amazon India also received similar government approval for FDI in food retail.
  • All three companies together sought a combined investment of $695 million over time.
  • Amazon Now already operates an online grocery platform in Bengaluru, Hyderabad, and Gurgaon.
  • Flipkart and Paytm are preparing to enter the grocery space soon.

About the business

  • Bigbasket is an online grocery delivery platform.
  • It delivers a wide range of groceries, fresh fruits, vegetables, and household items to customers' doorsteps.
  • The company operates in multiple cities across India.

What happens next

  • Bigbasket will create a separate entity for food retail.
  • The company will begin work on the finer details of its business plan.

The deal

Type
policy

Founders

  • Hari Menon, Co-founder

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