The decision was taken at a meeting chaired by Prime Minister Narendra Modi. The government had in Budget this year announced that 100 percent FDI would be allowed through FIPB route in marketing of food products produced and manufactured in India.

"It has now been decided to permit 100 per cent FDI under government approval route for trading, including through e-commerce, in respect of food products manufactured or produced in India," an official statement said.

The food processing sector has attracted USD 5,285.66 million FDI during April 2012 to December 2015 period. Food Processing Minister Harsimrat Kaur Badal had recently said the foreign direct investment in the food processing sector could cross USD 1 billion in the next two years, helped by reforms in FDI space and streamlining of regulations by food safety regulator FSSAI.

The government is making efforts to double the food processing level of fruits and vegetables, which currently stands at only 10 percent.

Earlier in the day, Minister of State for Agriculture Sanjeev Balyan said, "price fluctuation in vegetables like tomato can be controlled effectively if we strengthen the entire chain of food processing." He said the government has allowed 100 percent FDI in this sector as more investment is required.

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