How food processing is emerging as high-profit industry
How food processing is emerging as high-profit industry

India is world’s second largest producer of food providing livelihood to around 55 per cent of the total population and acting as a base for almost all the food processing industries. The industry is ranked fifth in terms of exports, production and consumption. The government is also taking corrective action to boost growth of the food sector. In a recent move, the government has sanctioned 42 Mega Food Parks and 30 Cold chains to empower the industrial growth focusing on delivering the best quality products. 

”The government is working to ensure that affordable credit is available to entrepreneurs to set up food processing units across the country.  And I believe, the industries should also come forward with inputs, collaborate with foreign players and partner with the government, ministry of food processing industries to encourage investment in the sector,” shared Harsimrat Kaur Badal, Honourable Minister, Ministry of Food Processing Industries. The food sector has been witnessing tremendous changes in the consumption pattern in the last two years. Increasing Urbanisation, lifestyle and aspirations, rising nuclear families, working women, increasing spends on health foods, changing demographics – rise in incomes, and demand for functional foods are some major factors responsible for overall change in the industry’s growth.  And with diversity of religions and cultures, the food industry has various reasons to celebrate.

“The food industry is profusely growing because of modern retail, working women and urbanisation of people,” said P Rajan Mathews, Vice President, Mother’s Recipe.

Making India the largest food processor

The role of Indian government has been instrumental for the growth and development of the industry. The government through the ministry of food processing industry (MFPI) is making all efforts to encourage investments in this sector. From approving proposals for foreign collaboration; industrial licenses and 100 per cent export oriented units, the food sector has emerged as a high-profit sector, it offers for value addition, particularly with the food processing industry getting recognised as a high-priority area.

“The Ministry of Agriculture and Ministry of Food Processing Industries are critically linked and there is a need for mutual support. Food industry has a great potential to create employment opportunities for youth and connects with a large number of consumers, farmers and industry. And the government is trying to improve budget allocation to achieve the development goal,” added Sadhvi Niranjana Jyoti, Union Minister of State, Ministry of Food Processing Industries.

And holding the top position by being the largest producer of milk and cereals and second-largest producer of fruits and vegetables, the country stands among the top five producers of rice, wheat, groundnuts, tea, coffee, tobacco, spices, sugar and oilseeds.

And we can see that the allocation of Rs 2,000 crore (US$ 319.98 million) as a separate National Bank for Agriculture and Rural Development (NABARD) fund for food processing industries during the Union Budget 2014–15 is all set to give a big boost to this sector in India.

Adding to this, Rajesh Srivastava of Rabo Equity Advisors put forward the idea of setting up a Food Processing Bank in India that will have the right skills and potential to evaluate food processing proposals and improve availability of finance.

Hence, preparing the industry to face global competition and enhancing the product acceptance by overseas buyers may help in keeping the industry technologically alongside of international best practices.  

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