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India’s Rising Food Processing Industry: The Indian Prime Minister emphasized that the government has implemented numerous reforms over the past decade to promote the growth of the food processing industry in India.
He announced the Global Food Regulators Summit organized by FSSAI, which will bring together global bodies like WHO and FAO, along with domestic institutions, to address issues related to food safety, quality standards, and best practices.
World Food India (WFI)
Inception and Purpose:
Launched in 2017 by the Ministry of Food Processing Industries (MoFPI), the first edition of WFI aimed at showcasing India’s rich food culture and attracting investments in the country’s diverse food processing sector.
Key Editions:
- 2nd Edition (2023): Organized to celebrate the International Year of Millets and foster global collaboration in the food processing industry.
- 3rd Edition (2024): Scheduled from 19th to 22nd September 2024, continuing the momentum to bring together global stakeholders.
Food Processing Sector in India
Current Scenario:
- Known as a ‘Sunrise sector,’ the food processing industry plays a crucial role in connecting Indian farmers with both domestic and international consumers.
- It includes key segments such as processed fruits and vegetables, ready-to-eat/cook foods, dairy products, and beverages.
Growth Statistics:
- Experienced significant growth with an average annual rate of 7.3% from 2015 to 2022.
- Employs 2.03 million people in the registered sector, representing 12.22% of total employment.
- The unregistered sector employs 5.1 million workers, accounting for 14.18% of unregistered manufacturing jobs.
Key Growth Drivers:
- Agri-commodity Hub: Benefiting from diverse agro-climatic conditions and abundant natural resources, India is a leading producer of milk, spices, fruits, vegetables, poultry, and meat.
- Policy Support: Programs like One District, One Product (ODOP) and other favorable policies bolster growth.
- Market Potential: Projected to expand from US$ 866 billion in 2022 to US$ 1,274 billion in 2027, driven by rising incomes, urbanization, and evolving food preferences.
Government Initiatives to Boost the Food Processing Sector in India
1. PM Kisan SAMPADA Yojana (PMKSY):
A comprehensive package designed to create modern infrastructure and an efficient supply chain, from farm gate to retail outlet, enhancing the overall value chain in food processing.
2. PM Formalisation of Micro Food Processing Enterprises (PMFME) Scheme:
Focuses on upgrading existing micro-enterprises in the unorganized food processing sector, aiming to formalize and improve productivity and efficiency.
3. Production Linked Incentive Scheme for Food Processing Industry (PLISFPI):
a). Aims to:
- Boost domestic manufacturing and increase exports.
- Support food manufacturing entities with specific sales criteria.
- Promote investment for expanding processing capacities; 100% Foreign Direct Investment (FDI) is permitted in this sector.
- Incentivize the emergence of robust Indian food brands with complete profit exemption for the first five years.
b). One District One Product (ODOP) Scheme:
- Launched under the PMFME scheme to develop value chains and align support infrastructure.
- Approved for 713 districts across 35 States/UTs, covering 137 unique products, to promote district-specific food products.
c). Mega Food Park (MFP) Scheme:
- Adopts a cluster approach by setting up modern food processing units in designated agricultural and horticultural zones.
- As of December 2023, 41 projects were approved, with 24 operational, facilitating a significant increase in food processing capacity.
d). Operation Greens:
- Initially launched to support the Tomato, Onion, and Potato (TOP) value chains by boosting Farmer Producers Organisations (FPOs), agri-logistics, and processing facilities.
- Extended under the “Aatmanirbhar Bharat Package” to cover all fruits and vegetables (TOTAL), enhancing the scope and impact of the scheme.
Challenges Facing the Food Processing Sector
a. Lack of Advanced Infrastructure:
Many businesses in the small and medium enterprise (SME) sector struggle with outdated technology and facilities, limiting their ability to compete and scale.
b. Supply Chain Inefficiencies:
The sector suffers from disorganized and inefficient supply chains, leading to high levels of wastage and reduced profitability.
c. Inadequate Storage and Transport Facilities:
Insufficient cold storage and transport infrastructure hinder the ability to maintain quality and extend the shelf life of processed food products.
d. Limited Access to Credit and Financing:
Small businesses often face challenges in securing funding, which restricts their capacity for growth and modernization.
Way forward
Growing Demand and Supportive Policies:
With rising demand for processed food products in both domestic and international markets, alongside supportive government initiatives, the food processing sector is poised for substantial growth.
Collaborative Efforts for Future Growth:
By addressing existing challenges and encouraging collaboration between the government and private sector, the food processing industry can significantly contribute to India’s GDP and economic development, becoming a pivotal sector in the nation’s growth story.
