Food Industry in India: The Indian food market accounts for about two thirds of retail sales. The retail food sector in India is likely to grow from $70 billion in 2008 to $150 billion by 2025. In addition, exports of agricultural products from India are expected to more than double from $10 billion to $20 billion between 2008 to 2012.India comes first globally in the production of milk, pulses (lentils), sugarcane and tea. It is also the second largest producer of wheat, rice, fruits and vegetables. While India is one of the world’s major food producers and consumer, it accounts for less than 1.5 per cent of international food trade.
Today, most of the food processing in India is manual. Use of technology such as pre-cooling facilities for vegetables, controlled atmospheric storage and irradiation facilities is negligible. Modernizing and bringing in state-of-the-art technology has been seen of great importance by both existing and upcoming manufacturers.
Due to its diverse climatic conditions, it has a wide ranging and large raw material base appropriate for food processing industries. The most promising segments include soft-drink bottling, confectionery manufacture, fishing, aquaculture, grain-milling and grain-based products, meat, poultry processing, alcoholic beverages, milk processing, tomato paste, fast-food, ready-to-eat breakfast cereals, food additives, flavors, etc. Well-established R&D and technical expertise of Indian research institutions such as Central Food Technological Research Institute, Central Institute of Fisheries, National Dairy Research Institute, National Research, and Development Centre offer support for the food processing sector.
“Vision 2015” is the government’s plan to triple the size of the food processing industry from $70 billion to about $210 billion, raising the level of processing of perishables from 6 percent to 20 percent, and enhancing India’s share in global food trade from 1.5 percent to 3 percent. Executing this plan will require an investment of $20 billion.
The Indian government has placed initiatives for food industries by making items such as fruit and vegetable products, condensed milk, ice cream, and meat products all exempt from the Central Excise Duty. The excise duty on ready-to-eat packaged foods has been brought down from 16 percent to 8 percent. They have also announced a series of new initiatives which include a separate policy at the state level on contract farming and making the sector tax-free. For promoting the food processing industry, the ministry has established an area for technology focusing on the creation of new processing capacity and up-gradation and modernization of existing processing capabilities, and a second scheme for Human Resource Development which focuses on developing technologists, managers, entrepreneurs and manpower for quality management in food processing.
According to a FICCI-E&Y study on the Indian food industry, investment opportunities in the Indian food industry are set to increase 42 percent to $181 billion in 2015 and to $318 billion by 2020.
Last updated: December 12th, 2013
