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Make in India in food processing sector

17 MAR,2016 | Mumbai

Dr Prabodh S Halde, President, AFST, Mumbai

India is the second largest producer of food and holds the potential to be the biggest on the global food and agriculture canvas, according to a Corporate Catalyst India (CCI) survey. The food processing industry is one of the largest in India – it is ranked fifth in terms of production, consumption, export and expected growth. 

The agriculture sector is the base for most of the food processing industry and this sector has touched a growth rate of 4.4% in 2012-13. The food grain production at the India level is close to 245 million MT. The food processing industry is growing at a 13% growth rate and for the Indian economy the growth of this industry is crucial for the overall growth of the nation.

India annually produces 205 million tonnes of fruits and vegetables, but unfortunately the processing percentage is poor - only 4.6%. In contrast, countries like the USA (65%), China (23%) and Philippines (78%) are far ahead of India in reducing wastage and enhancing the value addition and shelf life of farm products. This is an alarming signal for India as a large volume of the agricultural produce is wasted. About 35% of the fruits and vegetables are wasted annually due to poor storage facilities, amounting to a revenue loss of Rs 500 billion. Also, 80% of the vegetables rot due to high water content and lack of processing facilities, resulting in a revenue loss of Rs 125 billion.

The food processing industry is of enormous significance for India's development as it has efficiently and effectively linked the nation’s economy, industry and agriculture. The linking of these three pillars has synergised the development process and promoted the growth of the nation to a great extent. The food processing industry is one of the largest industries operating in India and is divided into several segments. Government of India has identified food processing sector as one of the key sector for Make in India and thus Ministry of Food Processing Industries is focusing on growth of this sector. Till now India got 42 mega food parks with allocated investment of Rs 98 billion. Growth drivers for Make in India Key growth drives for Make in India are:

• Liberalisation and the growth of organised retail has made the Indian market more attractive for global players; with a large agricultural resource base, abundant livestock and cost competitiveness, India is fast emerging as a sourcing hub of processed foods.
• With a population size of 1.22 billion of which 604 million were under the age of 24 in 2011, this rising youth population is likely to increase India’s overall food consumption.
• Rising income levels, affluence and a growing middle class.
• Availability and good demand of Indian nutraceuticals.
• One-third of the population will be living in urban areas by 2020.
• Increasing desire for branded food as well as increased spending power.
• Large distinct consumer segments to support customised offerings/new categories and brands within each segment.
• Consumption in India is driven towards packaged and ready-to-eat foods.
• Favourable economic & cultural transformation, shift in attitudes & lifestyles, consumers are experimenting with different cuisines, tastes and new brands.
• There is an increase in awareness and concern for wellness and health, high protein, low fat, wholegrain, traditional foods and organic food.
• Exports of food items have been rising steadily.
• Also not only in manufacturing sector, Make in India will be successful in other allied sectors like research & development since capital and operative cost of R&D in India is less. Availability of skill manpower and good knowledge of English and food science. Thanks to over 300 food science and nutrition colleges all across India.

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