A.4. Scope and Significance of Food Processing Industries in India
The Indian food industry is heading for huge growth, increasing its contribution to the world food trade every year due to its immense potential for value addition, particularly within the food processing industry.
Indian food and grocery market is the world’s sixth-largest, with retail contributing 70% of the sales.
The Indian food processing industry accounts for 32% of the country’s total food market. It is one of the largest industries in India and is ranked fifth in terms of production, consumption, export, and expected growth.
Major points:
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India’s position as a major food producer |
India ranks 1st in the production of – milk, ginger, banana, guava, papaya, mango, etc. It ranks 2nd in the production of rice, wheat, potato, sugarcane, cashew nut, tea, etc. It is among the top 5 countries in the production of coffee, tobacco, spices, seeds, etc. With such a huge raw material base, we can easily become the leading supplier of food items in the world. |
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Resource advantage of India |
Different soil types and different climate types for the cultivation of diverse food crops, long coastal lines suitable for fishing, a huge resource of domestic animals, etc. |
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Increasing employment |
Expected to create more than 10 lakh new jobs. |
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Curbing Migration |
Employs in rural areas, hence reducing migration from rural to urban. Resolves issues of urbanization. |
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Curbing food inflation |
Removes issues of wastage or middle man. Curbs food inflation. Indirect relief on non-food inflation too. |
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Crop Diversification |
Because of the long shelf life, farmers can diversify their products. |
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The demand potential |
Expected to reach 250b$ turnout by 2015 and 350b$ by 2020. Youth population, middle class, rising income, nuclear families, media penetration, etc. cited as positive factors. |
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Government initiatives to boost food processing |
Various government initiatives like attracting FDI, reduction in excise duties, etc. have boosted food processing. |
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The future driver of Indian growth |
Food processing corresponds to around 10% of GDP in the agriculture-manufacturing sector. It has the potential for more. |