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Food Industry

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Food Industry

June, 2011


India is the second largest producer of food and holds the potential to be the biggest on global food and agriculture canvas, according to a Corporate Catalyst India (CCI) survey. The food industry in India comprises the food production industry and the food processing industry. The food processing industry is one of the largest in India – it is ranked fifth in terms of production, consumption, export and expected growth.

Growth Drivers of India’s food Industry

The growth of the food industry is driven by:

  • Higher disposable incomes
  • Change in spending pattern
  • Increasing organised food retailing
  • Increasing export opportunities
  • Favourable regulatory environment and Government support and investment inflows

Market Size of Indian food Industry

The Indian food industry is projected to grow by US$ 100 billion to US$ 300 billion by 2015, according to a report by a leading industry body and Technopak. The industry, estimated at US$ 200 billion in 2006-07, is projected to reach US$ 300 billion by 2015. During the period, the share of processed food in value terms is expected to increase from 43 per cent to 50 per cent.


Exports of organic food products are expected to grow five-fold by 2015, according to the Agriculture and Processed Food Products Export Development Authority (APEDA). The Government agency expects exports to touch US$ 1.43 billion by 2014-15 against US$ 280 million in 2010-11.

Exports of floriculture, fresh fruits and vegetables, processed fruits and vegetables, animal products, other processed foods and cereals stood at US$ 5.45 billion as on November 2010-2011, according to DGCIS annual data published by APEDA.

Spice Board has revealed that the export of spices from India during 2010-11 has registered an-all-time-high both in quantity and value. During the year, a total of 5, 25,750 tonnes of spices and spice products valued at US$ 1,502.85 million were exported, as against 5, 02,750 tonnes valued at US$ 1,173.75 million in 2009-10. This is an increase of 5 per cent in volume and 28 per cent in dollar terms of value.

Food Processing Industry

Food processing Industry is one of the largest industries operating in India, and is highly fragmented.


The Food Processing Industry operates across various segments that include:

  • Fruits & vegetables
  • Meat & poultry
  • Dairy
  • Marine products, grains and consumer foods (that includes packaged food, beverages and packaged drinking water).

Value addition of food products is expected to increase from 8 per cent to 35 per cent by the end of 2025. Fruit & vegetable processing is also expected to increase to 25 per cent of total production in 2025 from the current level of 2 per cent, states the CCI report. Dairy sector – that holds highest share in processed food market – holds large potential to be exploited. The report reveals that 37 per cent of the total dairy produce is processed of which only 15 per cent is done by the organised sector. Hence, there still lies a lot of scope for investment and development.

The sector has attracted foreign direct investment (FDI) worth US$ 1,253.79 million from April 2000 to April 2011, according to the data provided by Department of Industrial Policy and Promotion (DIPP).

The amount of FDI inflow for Food Processing Sector in India during the financial year 2010-11 up to November 2010 (8 months) is US$ 129.2 million.