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Pashupati Kumar Paras, Minister, Ministry of Food Processing Industries (MOFPI) at a virtual conference on ‘“Global Value Chain: Creating Value Proposition for Food Processing organized by The Associated Chamber of Commerce and Industry (ASSOCHAM) stated, “India’s current overall level of food processing is just 10%, which can be rapidly increased to capture market opportunities and improve outcomes for farmers.”

Speaking at the event, the minister stated that food processing has an important role to play in linking Indian farmers to consumers in the domestic and international markets. He added, “India’s food processing sector is one of the largest in the world and its output is expected to reach $ 535 billion by 2025-26.”

The food processing industry has always been the engine of growth for the Indian economy. The $600 billion industry provides employment to 7+ million people with around 15 lakh women, directly or indirectly and has been contributing to 12.8% of the Indian GDP.  

The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 percent of the sales. The Indian food processing industry accounts for 32% of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption and export.

According to Paras, “The Ministry of Food Processing Industries (MoFPI) is making all efforts to encourage investments across the value chain. The industry engages approximately 1.93 million people in around 39,748 registered units with fixed capital of $32.75 bn and aggregate output of around $158.60 billion.”

According to the data provided by the Department of Industrial Policies and Promotion (DIPP), the food processing sector in India has received around $ 7.54 billion worth of FDI during the period April 2000-March 2017. Unfortunately, there were various challenges that were faced by the food processing industry when the pandemic hit for the first-time including shortage of labour, supply chain gaps due to lockdowns and shutting down of factories. But on the upside, the pandemic has accentuated the critical importance of food safety and the management of food surpluses in the country. To this end, the sector’s policy measures have shifted the focus from livelihood to processing, distribution, and marketing.

Paras stated, “Under PMKSY (Pradhan Mantri Kisan Sampada Yojna), 42 mega food parks, 353 cold chain projects, 63 agro-processing clusters, 292 food processing units, creation of 62 backward and forward linkage projects and operation of six green projects across the country have been approved.”

To further support the food processing industries in the country, the ‘PM Formalization of Micro Food Processing Enterprises’ (PM FME) scheme has been launched. It is a centrally funded sector scheme with an aim to provide financial, technical, and business support to micro food processing units in the country. About two lakh micro food processing units will be given direct financial assistance in the form of credit linked subsidy under the scheme. The Union Cabinet has also given its approval to introduce the ‘Production-Linked Incentive’ (PLI) scheme in food products for enhancing India’s manufacturing capabilities and enhancing exports.