Untapped prospective of Food Processing Sector in India

food processing

The food processing industry in India is more and more seen as a potential supply for riding the agricultural economy because it brings approximately synergy among the client, enterprise and the farmer.

A properly-evolved food processing enterprise can boom farm gate costs, reduce wastage, make sure fee addition, promote crop diversification and increase export profits.

However, food processing interest remains at a nascent degree in India with low penetration. The demanding situations for the food processing sectors are numerous and annoying and need to be addressed on numerous fronts to derive marketplace benefits.

Some of these demanding situations are Inadequate infrastructural centers; GST implementation; get right of entry to credit score; loss by implementing research; constraints on quality of inputs; and meals protection legal guidelines.

Inadequate infrastructure

While the Indian country wide highways account for less than three in step with cent of the total community, they create 40 percent of all shipments, which puts lots of stress on the highways because of high visitor volumes, main to delays in transit.

The normal distance included by using truck/trailers in India is 250-300 km/day, while the global norm is 600-800 km/day. Most roads in India are designed to hold a maximum gross weight of sixteen tonnes, towards 36 tonnes within the country.

The rail haulage community suffers due to loss of ultimate mile connectivity from rail transporters, inefficiency because of monopoly in rail haulage, loss of availability of wagons, etc. The dependence on manual labor and coffee generation utilization influences turnaround times at ports, which include the value.

We need to:

Develop a committed freight hall in rail, supplemented by way of concretized dual carriageways for the State and countrywide highways, that allows you to at once lessen the price of goods supplied.

Support personal rail operators by way of providing access to the infrastructure of Indian Railways at concessional fees, tax holidays for the acquisition of wagons and advent of rail terminals for shipment consolidation and aggregation.

Support the improvement of organized strategic logistics hubs by way of helping in land acquisition and with the aid of imparting tax incentives/tax holidays

Incentives operators in putting in place end-to-end logistics and warehousing.

Implementation of GST

The authorities need to ensure timely implementation of GST to provide incentives to the food processing sector, at the same time as doing away with subjectivity in the treatment and class of diverse food merchandise.

Some packaged foods, which might be of day by day requirements, need to be classified at nil/lower price of taxation.

The positive effect of foreseen in GST is as follows:

Location of producing flowers might be decided on the idea of demand in place of tax implications.

This method total landed expenses and infrastructure considerations could govern the place of producing flora. This might thereby spur growth in infrastructure in addition to transportation and logistics.

Distribution networks may undergo sizable change, as with the onset of GST, groups would no longer require putting in warehouses in every State. Tax dynamics will no longer shape deliver-chain networks.

Economies of scale and larger operations would be viable, and it might also allow the improvement of a hub-and-spoke machine of delivery for outbound moves.

Disparities in taxes across States are expected to be removed and hence make India as one marketplace, helping the unfastened motion of goods with minimal logistics assets spend.

Access to Credit

The Government has set up a national financial institution, on the lines of Nabard, or amplify the scope of Nabard, to lend credibility to meals processing industries. This will make certain rapid disbursal of price range to the food processing area, that’s continually grappling with the issue of loss of getting entry to credit from banks.

State governments should play a catalytic role in partnership with banks, monetary establishments, technical and control institutions, and farmers’ companies, so that small and unorganized gamers turn out to be globally aggressive.

Lack of applied research

Though several Central Institutes and State Agricultural Universities provide specialized courses on food era and undertake implemented studies, most R&D establishments have no longer been capable of increase innovative merchandise, procedures and machinery of a worldwide stature, as reflected in India’s proportion in worldwide trade.

The key motives for this are segregation of lecturers from implementing research, insufficient enterprise interface, low commercial orientation and shortage of collaborative efforts with global friends.

Technology remains being imported for the establishment of large-scale, exported-oriented units for manufacturing of gadgets together with even banana paste, concentrates of numerous fruit juices, sorting, cleaning, washing, waxing, and packaging of raw fruits and vegetables.

India ought to pass in the direction of self-sufficiency in the above technologies.

Raw material manufacturing

We nevertheless have the problem of availability of the right quality of produce at the proper time, including vegetable, fruits, and rice.

The root reasons for this encompass insufficient extension efforts, lack of precision farming practices, unclean harvesting strategies, among other factors. We want to address some of these problems in a holistic way.

Food Safety Laws: The Government must ensure enforcement of the Food Safety and Standards Act (FSSA) in spirit, which includes increasing considerably the wide variety of trained auditors and state-of-the-art lab facilities.

Given the goal of the FSSA and the mandated transparency, it is important that:

Food government, medical panels and scientific committees have to accept defined responsibilities with exact targets of rule-making;

To absolutely leverage the increased potential of this substantial untapped sector, the challenges being faced by way of the stakeholders on this sector want to be properly addressed, as there is a large possibility to boom prosperity from farm to fork.

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