FOOD PROCESSING IN INDIA : A SECTOR OF OPPORTUNITIES
At the time of Independence, there was a huge shortage of food production in India. But after the Green Revolution, India showed a remarkable progress in agriculture produce and there was a huge improvement in food production of the nation not just to feed the entire population but for even exporting the surplus produce. But still, a huge amount of population is suffering from hunger and malnutrition. One of the major reason for the inefficiency of India in feeding its entire population is the huge wastage of food produced. As per recent studies, “India wastes as much food as the whole of United Kingdom consumes”. Up to 40% of the food produced in India is bound to get wasted. Hence comes the need for an efficient food processing industry which could crucially contribute to the food security of India.
The food processing industry is one of the largest industries in India and is ranked fifth in terms of production, consumption, and exports. Recently, India hosted a grand global event, World Food India, to boost the Food Processing Industry in the nation which was organised by the Ministry of Food Processing Industries from 03 to 05 November 2017. Food processing Minister, Harsimrat Kaur Badal, said that $11.25 billion investments happened in the nation’s food processing sector amid the World Food India occasion, which will help in the creation of many jobs. The event was timed correctly as India is one of the largest food producing nation in the world which gives it the advantage to be a hub of food processing industry. Also, the jump of 30 places by India in ease of doing business puts India in a strong position to attract foreign investments.
There are many points to substantiate the fact that there lies a huge scope of Food Processing Industry in India:
- In majority of agricultural commodities, India ranks in top five as a producer as well as a consumer
- Very crucial industry as it directly creates jobs in villages and helps farmers
- India ranks first in the production of milk, ghee, ginger, papaya, mango, guava, etc
- India ranks second in the production of Fruits and Vegetables, Rice, Wheat, other cereals.
- India ranks third in egg production
- India ranks fifth in meat production
- Changing consuming patterns of India towards processed and packaged foods
- Diversifying food basket of consumer
- Shifting preferences towards processed foods
- Demand for fortified foods to tackle the challenge of malnutrition
- Overall processing levels of food in India is just 10% where only 2% of fruits and vegetables are processed which opens up doors for huge scope of processing
- Presence of 3 Million MT gap of Cold Chain
- 100% FDI policy support through automatic route in food processing
- 100% FDI in food retail for food products manufactured/produced in India
- Special fund of INR 2,000 crore (US $ 300 million) with NABARD for designated food parks and processing units
- Food processing units can avail preferential rates under Priority Sector Lending
- Excise duty reduced from 10% to 6% on machinery for food processing 12.5 % to 6% on Refrigerated Containers
But some challenges which hinder the growth of food processing industry in India are:
- India just exports 2.2% out of the total global exports of processed foods
- Poor warehousing and storage capacity
- Huge upgradation required in agricultural infrastructure
- Heavy usage of inorganic chemicals in India for agricultural production that needs to be shifted to organic ones.
- Gross capital investment in agriculture infrastructure should be given a boost.
- Lack of holistic approach
- Mounting of finance
- Lack of skilled and trained manpower
- Inadequate quality control and packaging units
- High taxes and duties
- High unit costs
- Long and fragmented food supply chain
- Lack of cold storages
- Lack of awareness
- Loopholes in Food Safety and Standards Act
- Exclusion of processed food in the basket of low-income group
Some solutions to boost the food processing sector in India could be:
- Develop agricultural infrastructure and enhance public investments in agricultural sector of India
- The productivity of the farm sector must be increased using modern agricultural practices and technologies which will increase India’s participation in the global food market and be a major global hub in this sector.
- A broad policy framework should be made in regard to the exports of the processed vegetarian and non-vegetarian food from grass root level.
- Availing big investments through big brands
- Farm patterns must be changed and crop production needs to be diversified.
- The food processing food park concept should be followed across the country as it offers an alternative to farmers.
- Pan India implementation of good practices from best-producing states and from around the world.
- More awareness towards the education of food processing should be spread and more institutes must be opened up.
- New technologies can be brought in to be used which can also improve the skills of the food processing and food technology students and entrepreneurs.
- Training and motivating students in food processing sector to be an entrepreneur
- University-Industry linkage for food processing sector should be strengthened, which will increase the awareness and productivity that will lead to better exports globally.
- Blending Indian skills with international technology which can take India to new heights in this sector. For instance, widely popular dish of Britain, Chicken Tikka Masala, is from India.
- Maintaining quality and hygiene and its strict enforcement
Also, Government of India is lending support through following measures:
- The launch of Pradhan Mantri Kisan Sampada Yojana to create world-class food processing infrastructure which will help in the creation of modern infrastructure with efficient supply chain management from farm gate to the retail outlet.
- Make in India initiative
- Creation of Mega Food Parks
- Working on 135 Integrated Cold Chain Projects with an investment of US $ 500 million
- Modernisation of slaughterhouses
- Measures to check upgradation of street food
- Effective implementation of Food Safety and Standards Act, 2006
- National Mission on Food Processing, with its mission of Decentralisation and Outreach
- Setting up of training institutes
- The launch of Food Regulatory Portal and Investors Facilitation Portal during World Food India.
There are some hurdles in the growth of Food Processing Industry but focusing and working over the solutions, this sector can achieve great heights as there is a huge scope for the growth of Food Processing sector in India. With conducive efforts of Government of India and concerned ministries in the direction of Food Processing, India has successfully placed itself as one of the most attractive destinations globally for Food Processing in terms of growth and investment opportunities. India’s food processing sector has the potential to attract 33 billion USD (about Rs 2.14 lakh crore) in investments by 2024 and generate huge employment. The efficiency of India in Food Processing sector will help in reducing post-harvest losses and feeding a huge population suffering from malnutrition and hunger. Focus on this sector can help in achieving hunger-free India and also doubling farmer’s income.
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| Aayushi |
