Food sector is one of the largest sectors in India in terms of production, growth, consumption, and export. Indian food industry currently stands at Rs 247,680 crore (US$ 39.71 billion) and is expected to touch Rs 408,040 crore (US$ 65.41 billion) by 2018, registering a growth of 11 per cent, according to a report titled 'India Food Service Report 2013' by National Restaurant Association of India (NRAI).
The Indian food services industry has witnessed strong growth over the past few years. The industry is further expected to grow, given the rising disposable incomes, a greater population of younger people, the growth of consumers in smaller towns and the widening exposure to new cultures and cuisines besides an increased propensity of eating outside the home.
With a huge agriculture sector, abundant livestock, and cost competitiveness, India is fast emerging as a sourcing hub of processed food. Food processing sector has become a catalyst for the development of Indian agriculture and is of enormous significance to development.
- Cadbury India plans to invest more than Rs 1,000 crore (US$ 160.31 million) in the first phase of a manufacturing plant in Sri City, Andhra Pradesh (AP). The company has signed an agreement with Sri City to take on lease 134 acres of land for the proposed facility
- Tierra Food India plans to make an investment of Rs 7 crore (US$ 1.12 million) in its production facility at Kinfra Park, Adoor, to expand the product line
- Nissin Foods, world’s popular Top Ramen brand of cup noodles, plans to buy Capital Foods to expand its footprint in India
- Ruchi Soya Industries, India's leading food and agro-based FMCG player, has inked a joint venture (JV) with J-Oil Mills Inc and Toyota Tsusho Corporation (TTC), both from Japan. The JV plans to start supplying products to the institutional customers by the end of 2013
- Parle Agro has launched Cafe Cuba, India’s first coffee-flavoured carbonated beverage. Parle expects the new coffee drink to record Rs 1,000 crore (US$ 160.31 million) sales in the first 12-18 months of its launch
Food Processing Industry
The Indian food processing industry is a high priority sector and is poised for excellent growth in the coming years. The total value of Indian food processing industry is expected to touch US$ 194 billion by 2015 from a value of US$ 121 billion in 2012, according to Mr Swapan Dutta, Deputy Director General, Indian Council of Agricultural Research (ICAR).
The packaged food sector is presently the fifth largest sector in India and has grown rapidly over the past few years. The industry registered a compound annual growth rate (CAGR) of 15.6 per cent during FY07-FY13. In India, the industry is largely dominated by ready to eat segment, which contributed nearly 90 per cent of the total sales of packaged foods in India FY13.
The Indian food processing industry is primarily export orient. India’s agri and processed foods exports stood at Rs 116,331.68 crore (US$ 18.65 billion) during April-March, 2012-13, as compared to Rs 82,480.25 crore (US$ 13.22 billion) in the corresponding period last year, according to data compiled by the Agricultural and Processed Food Products Export Development Authority (APEDA).
Investments in the Indian food processing sector grew at 20 per cent per annum in five years and total investment at present is estimated at Rs 150,000 crore (US$ 24.04 billion), employing over 10 million, as per Mr S Sivakumar, Head, ITC Agri and IT Business Group. Further, the Government of India expects US$ 21.9 billion of investments in food processing infrastructure by 2015.
The food processing industries in India attracted foreign direct investments (FDI) worth US$ 1,970.09 million during April 2000 to July 2013, according to the latest data published by Department of Industrial Policy and Promotion (DIPP).