Walmart-owned e-commerce giant Flipkart on Tuesday said it plans set up a new entity, Flipkart Farmermart, to expand operations in food retail sector as it looks to compete with rival Amazon in the segment.
“In line with the Government of India’s FDI policy, which allows 100% foreign direct investment in food retail for food produced and manufactured in India, Flipkart is applying for appropriate licences from the government,” Kalyan Krishnamurthy, CEO, Flipkart Group said in a statement.
This newly-registered local entity ‘Flipkart Farmermart’ will focus on food retail and is an important part of the company’s efforts to boost Indian agriculture as well as food processing industry in the country, he added.
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While the company did not comment on the investments planned for the new venture, according to sources Flipkart has earmarked an initial investment of about ₹2,000 crore for the business. The investments will largely go into supply chain, storage and logistics.
Amazon had received government’s nod for its $500 million investment proposal for retailing of food products in India in 2017. The American retailer — through Amazon Retail India — now procures and sells grocery items. like packaged foods, cooking and other items and personal care products among others.