India is a perfect nation for Food Processing! How?

Food processing

India is a leading producer of fruits and vegetables in the entire world. In fact, farming being the major occupation, it’s not a surprise to know that India ranks second in the world in food and vegetable production. The amount of vegetables and fruits being produced here annually across a surplus of 150 million tonnes. The unfortunate part here is that only 2.2% of these sumptuous vegetables and fruits are processed, unlike other developed nations like the US where 65 % of the production is processed, the Philippines, where 78 % of the production is processed and in China where 23 % of the food is processed. Comparing to all these nations, the food processing in India needs to reach some greater heights.

Food processing  may be a giant sector in the Asian nation that covers activities like agriculture, farming, plantation, farming, and fisheries. It conjointly includes alternative industries that use agricultural inputs for producing of edible product. The Ministry of Food process, Government of India divides the business into six segments: dairy farm, fruits and vegetable processing; Grain processing; Meat & poultry processing; Fisheries; and client foods as well as packaged foods, beverages, and packaged beverage.

The significance of Food Processing Industry:-

The food processing sector is very important for transforming India into a developed economy. This sector is a vital link between the industry and agriculture, which are the two strongest support systems for the Indian economy. The development of food processing industry will bring the following benefits to the Indian economy:-

  • Will substantially increase the agricultural yield
  • Will bring betterment in productivity
  • Increase employment opportunities
  • Development in the standard of living

This trade ranks fifth within the country and employs around thirteen million folks directly and thirty-five million folks indirectly. It accounts for Bastille Day of a total industrial output of the value. Its turnover is calculable at Rs one, 44,000 crores, of which Rs 1,11,200 large integer is within the unorganized sector. The easing of the Indian economy and world trade and rising shopper prosperity have thrown up new opportunities for diversification within the food processing sector and opened new vistas for growth.

Why is India Suitable for Food Processing?

  • India ranks ordinal in terms of total food production globally, next to China.
  • India ranks first within the world in terms of production of milk, bananas, mangoes, guavas, papayas, ginger, okra and buffalo meat.
  • India ranks ordinal within the world in the production of inexperienced peas, potatoes, tea, tomato, herb and plenty of other key commodities.
  • The food process sector ranks first in terms of employment & the variety of factories operating and 3rd in terms of output.
  • The trade has witnessed a growth of seven.1% throughout 2013-14, a lot of more than the expansion in the agriculture sector and at par with the producing sector.
  • Strategic geographic location and proximity to food-importing nations make Asian country favorable for the export of processed foods.
  • India witnesses nearly four.6-15.9% wastage in fruits and vegetables annually, thanks to a lack of contemporary harvesting technologies and cold chain infrastructure. Moreover, the process levels in fruits and vegetables, presently stand at near two.

Sector wise Opportunities in Food process


The Republic of India is that the world leader in milk production, producing around 146 million MT of milk. India’s milk production is anticipated to achieve one hundred eighty million MT by 2020, from current 146 million MT, while the demand is projected (by NDDB) to achieve two hundred million MT. 9 ever-changing fashion patterns, increasing disposable incomes and increasing health consciousness are the key growth drivers for milk and high price milk products in Republic of India. To faucet, this billowing demand most farm players have entered the processed farm product market with the introduction of import accessorial product like drawn butter, seasoned food, butter (with variants), flavored milk, cheese etc. New price accessorial farm product, innovative packaging, cold chain and new technology for price added foodstuff process supply tremendous potential for technology suppliers, processors as well as service suppliers.

Fruits & Vegetables

The Republic of India is that the second largest producer of the Fruits and Vegetables within the world with a production of 256 million MT. The Republic of India is that the world’s largest producer of bananas, papaya, mangoes & guavas and therefore the second largest producer of potatoes, green peas, cabbage, and cauliflower. Besides these, there conjointly lies large chance in alternative fruits, vegetables, plantation crops, spices, dry fruits, healthful and aromatic plants and organic product in the Republic of India. India witnesses nearly four.6-15.9% wastage in fruits and vegetables annually, as a result of lack of recent harvesting practices and inadequate cold chain infrastructure. Process levels in Fruits and Vegetables presently stand at near two. This offers a  large chance to take a position in initiatives that facilitate cut back wastage levels as well as adequate infrastructure (cold chain, process infrastructure), R & D for processed food & Vegetables; packaging and an innovative on farm preservation systems.

Meat & Poultry

The Republic of India produces around five.3 million MT of meat annually. Wastages in poultry are relatively higher at 6.7%, while in meat it’s 2.7%. The current process levels in poultry are 6 %, while for meat it is around 21 %. Poultry may be an extremely vertically integrated trade in the Republic of India and matches the potency levels of the many western countries. Modern abattoirs, logistics, process and cold chain infrastructure may be a Brobdingnagian chance in the Republic of India, given the ever-changing preference of Indian shoppers for clean and safe meat and meat product.

Marine product

India, with a production of nine.6 million MT, is that the second largest fish producer in the world. India is dowered with luxuriant geographical resources suited for each marine and upcountry fishery. The wastage levels in upcountry fisheries are to the tune of 5.2%, whereas for marine fisheries they’re near 10.5%. Processing levels of marine food in the Republic of India are at twenty-third. The Huge chance exists in the Republic of India for cold chain development for the marine product, price accessorial product development for domestic similarly as export market similarly as innovations in packaging for increased time period and merchandise differentiation.

Cold Chain

India produces over four hundred million MT of perishables once a year (horticultural produce+ dairy+meat+ poultry + fish). The wastage levels in the food product in the Republic of India are significantly high- four.6-15.9% in fruits, 5.2% in upcountry fish, 10.5% in marine fish, 2.7% in meat and six.7% in poultry. The calculable annual price of losses of agri turns out currently stands at ` ninety-two, 651 crores (USD fourteen Bn). The annual price of losses in fruits and vegetables, meat, fish, and milk is calculable at ` fifty, 473 crores (USD seven.6Bn). Adequate and economical cold chain infrastructure from farm gate to shoppers is needed to arrest the high losses in providing the chain of a food product. A baseline survey conducted by National gardening Board (in Dec 2014) has calculable the overall cold storage capability in the Republic of India at thirty-one.8 million MT. A Large unrealized gap exists within the sector for investments in cold storage, CA storage, reefers, ripening chambers, IQF, milk chilling and process in the Republic of India.

The export scenario of India

India’s export of processed food was USD thirty six.2 billion within the year two014-15 which has share of products like mango pulp, dried & preserved vegetables, different processed F & V, Pulses, Groundnuts, Guargum, jaggery and Confectionery, Cocoa merchandise, Cereal preparations, Animal merchandise, Alcoholic on alcoholic beverages and miscellaneous preparations. Major destinations for exports of processed food, from Asian countries are unit USA, Vietnam, Iran, Asian nation, and UAE.

The Incentives achieved from the Food Processing Industry

100% FDI permissible through the automatic route in food processing sector. Concessional rate of impost applicable on foreign instrumentality beneath the project import benefits. Tax deductions, on cost allowed at the speed of one hundred and fiftieth for fitting and operating the cold chain or warehouse for storage of agricultural manufacture. 100 percent tax exemption obtainable to new food process, preservation and packaging units for the first five years of operation, and at the speed of 25%-30% thenceforth. A fund of ` twenty billion created with a full-service bank for Agriculture and Rural Development (NABARD) for extending reasonable credit  for selected Food Parks and units in this. Loans to food & Agro-based process units and Cold Chain coated beneath Priority Sector loaning (PSL) by banks.


Though there are unit several promising dynamics that support a smart growth of this trade, there are still some vital constraints that, if not self-addressed sooner, will impede the expansion prospects of the Food process trade in the Republic of India. One among the largest constraints is that this trade is capital intensive. It creates a robust entry barrier and permits restricted variety of players to enter the market. Players mean competition that reduces efforts to boost quality standards. Major challenges two-faced by the Indian food process trade include: educating shoppers that processed foods are additional nutritious; managing low worth physical property for processing food products; would like for distribution network; development of selling channels; streamlining of food laws; rising food quality standards and strengthening food testing network; strengthening the institutional framework to develop hands for rising R & D capabilities to deal with global challenges. These challenges should be self-addressed to realize the full potential of the Indian food process trade.


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