food processing india per cent indian industry
Indian Food Industry, Food Processing Industry in India, Statistics#### IntroductionThe Indian food industry is poised for huge growth, increasing itscontribution to world food trade every year. In India, the food sector hasemerged as a high-growth and high-profit sector due to its immense potentialfor value addition, particularly within the food processing industry.Accounting for about 32 per cent of the country’s total food market, TheGovernment of India has been instrumental in the growth and development of thefood processing industry. The government through the Ministry of FoodProcessing Industries (MoFPI) is making all efforts to encourage investmentsin the business. It has approved proposals for joint ventures (JV), foreigncollaborations, industrial licenses, and 100 per cent export oriented units.#### Market SizeThe Indian food and grocery market is the world’s sixth largest, with retailcontributing 70 per cent of the sales. The Indian food processing industryaccounts for 32 per cent of the country’s total food market, one of thelargest industries in India and is ranked fifth in terms of production,consumption, export and expected growth. It contributes around 8.80 and 8.39per cent of Gross Value Added (GVA) in Manufacturing and Agriculturerespectively, 13 per cent of India’s exports and six per cent of totalindustrial investment. The Indian gourmet food market is currently valued atUS$ 1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20per cent. India’s organic food market is expected to increase by three timesby 2020#.The online food ordering business in India is in its nascent stage, butwitnessing exponential growth. With online food delivery players likeFoodPanda, Zomato, TinyOwl and Swiggy building scale through partnerships, theorganised food business has a huge potential and a promising future. Theonline food delivery industry grew at 150 per cent year-on-year with anestimated Gross Merchandise Value (GMV) of US$ 300 million in 2016.#### InvestmentsAccording to the data provided by the Department of Industrial Policies andPromotion (DIPP), the food processing sector in India has received around US$7.54 billion worth of Foreign Direct Investment (FDI) during the period April2000-March 2017. The Confederation of Indian Industry (CII) estimates that thefood processing sectors have the potential to attract as much as US$ 33billion of investment over the next 10 years and also to generate employmentof nine million person-days.Some of the major investments in this sector in the recent past are: * Global e-commerce giant, Amazon is planning to enter the Indian food retailing sector by investing US$ 515 million in the next five years, as per Mr Harsimrat Kaur Badal, Minister of Food Processing Industries, Government of India. * Parle Agro Pvt Ltd is launching Frooti Fizz, a succession of the original Mango Frooti, which will be retailed across 1.2 million outlets in the country as it targets increasing its annual revenue from Rs 2800 crore (US$ 0.42 billion) to Rs 5000 crore (US$ 0.75 billion) by 2018. * US-based food company Cargill Inc, aims to double its branded consumer business in India by 2020, by doubling its retail reach to about 800,000 outlets and increase market share to become national leader in the sunflower oil category which will help the company be among the top three leading brands in India. * Mad Over Donuts (MoD), outlined plans of expanding its operations in India by opening nine new MOD stores by March 2017. * Danone SA plans to focus on nutrition business in India, its fastest growing market in South Asia, by launching 10 new products in 2017, and aiming to double its revenue in India by 2020. * Uber Technologies Inc plans to launch UberEATS, its food delivery service to India, with investments made across multiple cities and regions.#### Government InitiativesSome of the major initiatives taken by the Government of India to improve thefood processing sector in India are as follows: * The Government of India aims to boost growth in the food processing sector by leveraging reforms such as 100 per cent Foreign direct investment (FDI) in marketing of food products and various incentives at central and state government level along with a strong focus on supply chain infrastructure. * In Union Budget 2017-18, the Government of India has set up a dairy processing infra fund worth Rs 8,000 crore (US$ 1.2 billion). * The Government of India has relaxed foreign direct investment (FDI) norms for the sector, allowing up to 100 per cent FDI in food product e-commerce through automatic route. * The Food Safety and Standards Authority of India (FSSAI) plans to invest around Rs 482 crore (US$ 72.3 million) to strengthen the food testing infrastructure in India, by upgrading 59 existing food testing laboratories and setting up 62 new mobile testing labs across the country. * The Indian Council for Fertilizer and Nutrient Research (ICFNR) will adopt international best practices for research in fertiliser sector, which will enable farmers to get good quality fertilisers at affordable rates and thereby achieve food security for the common man. * The Ministry of Food Processing Industries announced a scheme for Human Resource Development (HRD) in the food processing sector. The HRD scheme is being implemented through State Governments under the National Mission on Food Processing. The scheme has the following four components: * Creation of infrastructure facilities for degree/diploma courses in food processing sector * Entrepreneurship Development Programme (EDP) * Food Processing Training Centres (FPTC) * Training at recognised institutions at State/National level#### Road AheadGoing forward, the adoption of food safety and quality assurance mechanismssuch as Total Quality Management (TQM) including ISO 9000, ISO 22000, HazardAnalysis and Critical Control Points (HACCP), Good Manufacturing Practices(GMP) and Good Hygienic Practices (GHP) by the food processing industry offersseveral benefits. It would enable adherence to stringent quality and hygienenorms and thereby protect consumer health, prepare the industry to face globalcompetition, enhance product acceptance by overseas buyers and keep theindustry technologically abreast of international best practices.Exchange Rate Used: INR 1 = US$ 0.0155 as of April 17, 2017.References: Ministry of Food Processing Industries (MoFPI), Agricultural andProcessed Food Products Export Development Authority (APEDA), Media reportsand Press Releases, Department of Industrial Policy and Promotion (DIPP),Press Information Bureau (PIB), Confederation of Indian Industries (CII),Union Budget 2016-17, Union Budget 2017-18Note: # – According to a joint study by the Associated Chambers of Commerceand Industry of India (ASSOCHAM) and TechSci ResearchDisclaimer: This information has been collected through secondary research andIBEF is not responsible for any errors in the same.