PCS Guru

During the 17th edition of ANUTEC – International FoodTec India, held in Mumbai, notable figures from both the industry and government came together to unveil a promising future for India’s food processing sector. This sector is currently on an impressive growth trajectory and is positioned to become a key driver of the nation’s economy.

Exploring the Status of India’s Food Processing Sector

The Significance of Food Processing:

• The food processing sector plays a pivotal role within the broader food supply chain.
• It involves the conversion of raw agricultural and livestock products into processed, value-added food items suitable for consumption.
• This sector encompasses a wide array of activities, technologies, and processes aimed at enhancing food product safety, convenience, shelf life, flavor, and nutritional value.

India’s Food Processing Sector:

• India’s food processing sector is a substantial contributor to the nation’s economy, accounting for 13% of exports and 6% of industrial investment.
• Notably, it has attracted significant foreign direct investments (FDI), amounting to USD 4.18 billion between 2014 and 2020, underscoring the confidence in its future potential.
• By 2024, it is expected to generate an impressive 9 million jobs, and by 2030, India is poised to become the world’s fifth-largest consumer of food and food technology, with household consumption quadrupling, highlighting the sector’s substantial growth prospects.

Government Initiatives in the Food Processing Sector:

• The government has implemented several initiatives, including the inclusion of food and agro-based processing units and cold chains as agricultural activities under Priority Sector Lending (PSL) norms in April 2015.
• Simplifying the approval process by shifting from product-specific approvals to ingredient and additive-based approvals through notifications by the Food Safety and Standards Authority of India (FSSAI) in 2016.
• Allowing 100% Foreign Direct Investment (FDI) approval under the automatic route for the food processing sector.
• Establishment of a Special Food Processing Fund of Rs. 2000 crore in collaboration with the National Bank for Agriculture and Rural Development (NABARD).
• Other initiatives include the Pradhan Mantri Kisan Sampada Yojana, Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme, and the Production Linked Incentive (PLI) Scheme for the food processing industry.

Challenges Faced by the Food Processing Sector:

• Inadequate cold storage and transportation facilities leading to significant post-harvest losses of perishable goods and impacting farmer incomes.
• A highly fragmented supply chain in India resulting in inefficiencies and increased costs, exacerbated by poor road and rail infrastructure.
• The sector is subject to a complex web of regulations, licenses, and permits, which can be challenging for businesses to navigate, and inconsistent enforcement of regulations can lead to unfair competition and quality issues.
• Ensuring food safety and quality standards across the supply chain remains a significant challenge, with concerns about contaminated or adulterated food products.
• Limited investment in research and development inhibits innovation and the development of new, value-added products, with India’s research and development (R&D) expenditure-GDP ratio lagging behind major economies and the world average.

Moving Forward: Strategies for Advancement

• Establishment of smart food processing hubs: equipped with advanced technologies such as the Internet of Things (IoT), artificial intelligence (AI), and blockchain to monitor the entire food supply chain for quality, traceability, and efficiency.
• Focusing on nutraceutical innovation: by developing functional and nutraceutical foods tailored to specific health needs, including foods fortified with essential nutrients, probiotics, and bioactive compounds.
• Implementing zero-waste processing techniques: to utilize every part of raw materials, such as converting food waste into biofuels or creating new products like bio-plastics or animal feed.
• Establishing community-based food processing centers: in rural areas, serving as hubs for local farmers to process their produce, reducing post-harvest losses, and creating employment opportunities in rural regions.