Cabinet may take up Pepsi’s plea today

Cabinet may take up Pepsi’s plea today
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First Published: Thu, Jan 01 2009. 10 42 PM IST
Updated: Thu, Jan 01 2009. 10 43 PM IST
New Delhi: The Union cabinet may consider on Friday PepsiCo India Holdings Pvt. Ltd’s plea to waive the mandatory 49% disinvestment in bottling units.
PepsiCo has been seeking a waiver as 100% foreign investment is now allowed in the food-processing sector.
Last year, PepsiCo had requested the government to waive this clause. The matter has been pending with the cabinet committee of economic affairs, or CCEA, for some time.
If its application finds approval, it will have a significant impact on the company’s plans to infuse funds in India.
Vivek Bharati, executive director, PepsiCo India, however, declined to comment on the matter, beyond saying, “We have applied for certain permissions and till we have the government response, we have no comments.”
“This may help PepsiCo raise almost Rs200 crore in India,” said a person close to the development who didn’t want to be identified.
In September, Indra Nooyi, chairperson and chief executive of PepsiCo Inc., had said the soft drink firm will invest $500 million (Rs2,435 crore now) in India over the next three years, an investment aimed at tripling revenues from Indian operations in five years. The areas of investment would be manufacturing, agriculture and market infrastructure “along with initiatives for human, environment and talent sustainability,” she had said.
PepsiCo has already invested at least $1 billion in India so far and had announced a similar investment of $500 million in 2001 for five years.
The company is locked in a fierce battle with Coca-Cola Inc. in beverages and a host of Indian companies in snacks.
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First Published: Thu, Jan 01 2009. 10 42 PM IST