Following change in foreign direct investment (FDI) rules for the food processing sector, Pepsico India Holding need not divest 49% equity in bottling firms to Indian companies, with the government exempting it from the obligation. The exemption also prepares the ground for infusion of Rs 250 crore ($50 million) FDI by the beverages major in its Indian operations.
The decision was taken by the Cabinet Committee of Economic Affairs as 100% FDI in the food processing sector is now allowed in the country.
Earlier, when Coca Cola and Pepsico came to India they were asked to mandatorily offload 49% stake in bottling firms to Indian cos in due course. This will now clear the route for Pepsi to invest and expand aggressively in India.