Food Processing Sector To Attract $18 Billion In 4 Years

The second edition of Indus Food saw business deals and agreements worth $1 billion negotiated which would materialise in the upcoming months. "We had 800 global buyers from 78 countries who participated in Indus Food. In the first edition, we had participation from 43 countries which generated business worth $650 million, and this year, we managed to secure business transactions worth over $1 billion," said Trade Promotion Council of India (TPCI) Chairman Mohit Singla. TPCI had organised the two-day Indus Food Supermarket at India Expo at Greater Noida. 

"Indus Food-II saw the participation of 500 exhibitors who displayed products in 14 zones. We had 12,500 business meetings between Indian producers and foreign buyers. Over 10 MoUs were signed during 14 B2B meetings and one multilateral dialogue on Indian tea. We also had three government-to-government meetings with Vietnam, Iraq and UAE and one government-to-business with Bangladesh. Odisha Government was our partner which had organised investor meet," said Singla.

Must Read: Only 10% of Food Produce is Utilised in India, says Harsimrat Kaur Badal

Supported by the Department of Commerce, Ministry of Commerce & Industry, Indus Food is the flagship global trade show to maximise business opportunities for F&B (food and beverage) industry. Indus Food has been developed as the World Supermarket, to enable rest of the world meet their F&B requirements. 

"The most remarkable aspect of Indus Food-II was that it focused on SMEs for export business by bringing buyers to their doorstep and creating business opportunities for producers of value-added and organic products. Doubling of farmers’ income will happen if the business grows. With the Indian Government itself now working towards the identification of most prominent global buyers and creating their interactions with quality Indian suppliers through Indus Food, the benefit will percolate to the farmers. Moreover, the target of $60 billion exports, as envisaged in our Agri-Export Policy is now within reach,” said Singla. 

“Indus Food especially promotes value-added and organic products. India is ranked first in terms of the total number of organic producers with 11 lakh farmers practising organic. With the Government removing all restrictions on the export of organic farm products, the organic food export is sure to contribute in a much bigger way now, in meeting the target of $60 billion food and agriculture exports by 2022, as set by the Agriculture Export Policy 2018,” added Singla. 

Significantly, at the inaugural of Indus Food-II, Union Food Processing Minister Harsimrat Kaur Badal had said the Centre had roped in NAFED to ensure food procurement direct from farmers to help them get a better income and save their perishable items.

With a minimum estimated investment of Rs 3500 crore, fourteen mega food parks (MFPs) will become operational this year. The launch of these MFPs will create more than 70,000 jobs.

The formation of mega food parks is aimed at bringing together farmers, processors and retailers, and link them with the market in order to ensure maximisation of value addition, minimisation of wastages and improving of farmers' income.

The government has permitted 42 MFPs to be set up in India. Out of these, 13 are currently operational.

An official from the food processing ministry said, "With 14 more MFPs to be made operational in the financial year 2018-2019, it's a big achievement as we will be able to get 27 projects operationalised in four to five years."

The MFPs will be set up in Maharashtra, Himachal Pradesh, Punjab, Bihar, Tripura, Mizoram, Telangana, Chattisgarh, Andhra Pradesh, Madhya Pradesh, Haryana, Odisha and two in Kerala.

13 MFPs, which are presently operational, are located at Chittoor (Andhra Pradesh), Haridwar and Udham Singh Nagar (Uttarakhand), Tumkur (Karnataka), Fazilka (Punjab), Nalbari (Assam), Khargone (Madhya Pradesh), Ranchi (Jharkhand), Murshidabad (West Bengal), Rayagada (Odisha), Satara (Maharashtra), Ajmer (Rajasthan) and Surat (Gujarat). 

Union Minister for Food Processing Industries Harsimrat Kaur Badal has inaugurated the second mega food park in Uttarakhand, an official statement said.

The Himalayan Mega Food Park Private Ltd with over 50-acre area has been set up at a cost of Rs 99.96 crore and will benefit around 25,000 farmers in this and neighbouring districts, Ministry of Food Processing Industries said in a statement.

Minister of State for Food Processing Industries Sadhvi Niranjan Jyoti and Uttarakhand State Finance Minister Prakash Pant and Transport and Social Welfare Minister Yashpal Arya were also present at the event.

The first Mega Food Park in the state at Haridwar has become functional.

Badal said the mega food park, which has been set up in an area of 50.14 acres, will have a central processing centre as well as well as three Primary Processing Centres (PPCs) at Ram Nagar, Ramgarh, and Kaladungi.

The park will also have facilities for primary processing and storage near the farms and would not only benefit farmers of Udham Singh Nagar but also those of nearby districts - Nainital, Garhwal, Almora, and Champawat.

She said the mega food park will leverage an additional investment of about Rs 250 crore in 25-30 food processing units in the park and would eventually lead to a turnover of about Rs 450-500 crore annually. "The park will also provide direct and indirect employment to 5,000 persons and benefit about 25,000 farmers in the CPC and PPC catchment areas," the minister added.

The food ministry is creating mega food parks with modern infrastructure facilities for food processing along the value chain, from farm to market with strong forward and backward linkages through a cluster-based approach.

The sector will contribute towards doubling farmers' income in the coming years by working to achieve this goal through implementation of projects under the flagship scheme of Pradhan Mantri Kisan Sampada Yojana, Badal added.

The Chhattisgarh government has signed memorandum of understanding (MoU) with three food processing firms, including Baba Ramdev's Patanjali Ayurved, to set up processing units at an estimated investment of Rs 762.80 crore.

The pacts were signed with Patanjali Ayurved Limited, Manorama Industries Private Ltd and Aakriti Snacks Private Limited during a meeting held at the official residence of Chief Minister Raman Singh.

CM Of ChattisGarh said "As a part of the three pacts, food industries will be set up with an investment of Rs 762.80 crore, and is likely to provide employment, directly or indirectly, to over 24,000 people. Chhattisgarh government has given top priority to the food processing sector in its industrial policy and every facility required will be provided to those willing to invest in this sector".

An official said that the MoU signed with Patanjali Ayurved was worth Rs 671 crore under which an agriculture and herbal processing unit would be set up in Bijetala village of Rajnandgaon district.

Head of Patanjali Ayurved Acharaya Balkrishna, Ashish Saraf of Manorama Industries and Ashish Agrawal of Akriti Snacks signed the agreement for their respective firms while Special Secretary, state industry department Kamalpreet Singh signed on behalf of the state government.

The government could decide by November this year to allow foreign food retailers to sell non-food items, food-processing minister Harsimrat Kaur Badal said while releasing a draft on the model food processing policy.

The government last year allowed 100% FDI in food retailing, but dropped plans to include some general merchandise, such as soaps and shampoos, in the policy, which retailers have been pushing for.

Badal said, "I think before November, when the World Food India 2017 fair is held in Delhi, the government will take a decision on this (allowing non-food items in FDI in food retailing)."

According to the draft policy, the suggested incentives and support measures include credit to set up new food-processing units or buy new equipment as part of technology up gradation, exemption of electricity duty for a few years, availability of water on a priority basis and VAT refunds.

To support marketing and promotion of Made in India brand for processed food, the draft policy has suggested to establish a special-purpose-vehicle fund in public private partnership to brand and market products followed by giving freight subsidy — air, sea and road — and support in research and development.

"Once we get comments from the state governments on the draft policy, we will fine-tune it and adopt it. This will then drive the national policy," Badal said, adding that despite a large production base, the level of processing is low — less than 10%. According to official figures, approximately 2% of fruits and vegetables, 8% marine, 35% milk, 6% poultry are processed in the country.

The minister recently met ambassadors and high commissioners of various states inviting them to invest in the country.

"The government wants to position India as a world food factory by creating a framework for the growth of the food processing industry," she said.

The food-processing ministry has suggested that states should focus on providing single-window clearance to improve ease of doing business and boost investors confidence, Badal said, pointing out that state governments should focus on commodity base cluster development, which would ensure farmers get remunerative prices for their produce.

A top Food Processing Ministry official has said that the Food Processing industry is unlikely to have any adverse impact in terms of taxation under the proposed GST regime as the sector will continue to be taxed at existing rates.

The industry has demanded the sector be levied with minimum tax under the GST regime to fuel growth and attract investments, he said. Addressing an international conference on 'India Farm 2 Fork 2016', Special Secretary in the Food Processing Ministry J P Meena assured the industry that there will not be any adverse impact of GST regime on the sector.

"The GST regime is unlikely to adversely affect this sector with higher taxation slabs, as the available indication suggests that it would continue to be taxed at existing rates even post GST," a statement issued by PHD Chamber quoted Meena as saying during the event.

The government has reduced significantly the taxes, particularly excise on food processing industries from 10 per cent to 6 per cent, Minister of State for Food Processing Sadhvi Niranjan Jyoti said.

In future, she said the government would take more initiatives to make this sector more vibrant and put on global map, she was quoted as saying in the statement.

On post-harvest losses of agri-produce, Meena earlier said the government is evolving policies to boost food processing and reduce agri-wastage by 50 per cent in the next 5-6 years.

He called upon the industry to manufacture quality processed foods which are accepted in global markets, besides asking the food safety regulator to streamline standards in this regard.

He also shared that foreign direct investment in the sector has been USD 500 per annum in the last three years and mega food parks are coming up in 42 locations.

Harsimrat Kaur Badal, Hon’ble Minister for Food Processing has launched Special Skill training program under the Pradhan Mantri Kaushal Vikas Yojana  (PMKVY)  at  the Assocom Institute of Bakery Technology & Management (AIBTM) through video conferencing. “The bakery industry is a lucrative endeavour, which can be set up with a relatively smaller capital outlay. Being the second biggest maker of rolls a bakery product, Indian bakery industry needs such skill training to be widely promoted throughout the country to remain in the driving seat. Skill training is a strong requirement to support bakery industry’s fast demand growth, and this program would definitely boost the industry,” shared the Minister.

Adding to the same line, Raj Kapoor, Managing Director, AIBTM said, "The bakery industry is one of the largest among the processed food industries in India, which is estimated at USD 200 billion".

Food Processing Industries also has a huge role in efficient utilization of agricultural products therefore we are planning to launch skill training to help in preparing base for all the grain based businesses, and associated field. Assocom Institute of Bakery Technology & Management (AIBTM) was set up three years back, with specialized inputs from all players who are working in the business.

The institute had taken counsel and backing from foundations from USA, South Korea, Canada and Australia. AIBTM plan to train over two thousand persons associated with the bakery industry through different centers operated by the institute in the current year.