PepsiCo exempted from divesting stake in IndiaJanuary 2nd, 2009 - 3:35 pm ICT by IANS
New Delhi, Jan 2 (IANS) In a significant concession to PepsiCo, the Indian government Friday exempted the US-based food and beverages from divesting 49-percent stake in its bottling arm, after the company said it will invest a further $50 million in the country.The decision, pending for nearly a year, was taken by the Cabinet Committee on Economic Affairs, presided over by Prime Minister Manmohan Singh, said Science and Technology Minister Kapil Sibal.
“The government has decided to delete the condition of disinvestments. The company has decided to invest additional equity to the tune of Rs.50 million,” Sibal told reporters here after the meeting.
When the beverages, snacks and cereals giant had entered India in 1989, its arm here PepsiCo India Holdings Pvt Ltd was asked to divest 49 percent stake in the operations within five years of commencement of operations.
While the deadline was subsequently extended, the company, last year, sought a complete waiver, saying 100 percent foreign holding was now permitted in the country’s food processing sector.
PepsiCo chairperson and chief executive Indra Nooyi had in September last year announced a $500 million investment in India over the next three years to triple by 2014 the turnover of one of the top five markets for the group.
The investment, the Indian-born executive said, would be made towards capacity upgrade, infrastructure, research, new product development, environment sustainability and agriculture, to create 50,000 more direct and indirect jobs.
Till September, the company had invested $700 million in the country, employing 4,000 people directly and some 60,000 others indirectly.