Food Industry
The total food production in India is likely to double in the next 10 years.

Indian Food Industry

Latest update: March, 2015

Growth of food processing industry in India

During FY06-13, the food processing industry GDP expanded at a CAGR of 6.3 per cent.

Growth of food processing industry in India

Food processing segments in India

Meat, fish, fruits, vegetables and oils accounts for 40.2 per cent in FY12.

Food processing segments in India

Exports of processed food and related items

During FY11-14, India's exports of processed food and related products increased at a CAGR of 33.2 per cent to reach US$ 22 billion.

Exports of processed food and related items

Shares in APEDA exports

Within APEDA products, cereals had the highest share (48 per cent) during FY 14.

Shares in APEDA exports

Updated: March, 2015

SECTORAL REPORT | March, 2015

Introduction

The Indian food industry is poised for huge growth, increasing its contribution in world food trade every year. In India, the food sector has emerged as a high-profit sector on the back of the scope it offers for value addition, particularly with the food processing industry getting recognised as a high-priority area.

Accounting for about 32 per cent of the country’s total food market, the food processing industry is one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. The total food production in India is likely to double in the next 10 years with the country’s domestic food market estimated to reach US$ 258 billion by 2015.

The role of the Indian government has been instrumental in the growth and development of the industry. The government through the Ministry of Food Processing Industries (MoFPI) is making all efforts to encourage investments in the sector. It has approved proposals for joint ventures (JV), foreign collaboration, industrial licences and 100 per cent export oriented units.

Market Size

The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 per cent of the sales. It is projected to grow at the rate of 104 per cent, touching US$ 482 billion by 2020.

The Indian food processing industry accounts for 32 per cent of the country’s total food market, 14 per cent of manufacturing GDP, 13 per cent of India’s exports and six per cent of total industrial investment.

Indian food service industry is expected to reach US$ 78 billion by 2018.

The Indian gourmet food market is currently valued at US$ 1.3 billion and is growing at a CAGR of 20 per cent. It is expected to cross US$ 2.8 billion by 2015.

Indian food brands are increasingly finding prime shelf space in retail chains abroad. These include Bikanervala Foods, MTR ready to eat foodstuff and ITC’s Kitchens of India.

The online food ordering business in India is in its nascent stage. Share of online food ordering would be in single digits of the overall food ordering business which in 2014 was estimated to be around Rs 5,000-6,000 crore (US$ 800.19-960.12 million). We are growing at 20-30 per cent month-on-month.

The poultry sector of India is expected to register double-digit growth in 2015 on the back of stable feed prices and encouraging rural demand.

Investments

According to the data provided by the Department of Industrial Policies and Promotion (DIPP), the food processing sector in India has received around US$ 6,215.46 million worth of foreign investments during the period April 2000—Janaury 2015.

Some of the major investments in this sector in the recent past are:

  • Foodpanda.in has acquired food ordering portal Just Eat India in an all-stock deal as it plans to strengthen its presence in India.
  • Gujarat Cooperative Milk Marketing Federation (GCMMF), popularly known as 'Amul', plans to invest Rs 5,000 crore (US$ 800.18 million) to set up ten new processing plants as well as expand the current capacity to touch 32 million litres per day (MLPD) capacity by 2020.
  • Restaurant search service Zomato is in discussions to raise about US$ 100 million in a fresh round of funding. Zomato is now present in 22 countries and over 500 cities around the globe.
  • Online restaurant search service Zomato has acquired Urbanspoon, for an undisclosed amount, in an all-cash deal marking its entry into the US. This is Zomato’s sixth acquisition in six months.
  • ITC Ltd plans to invest Rs 1,000 crore (US$ 160.03 million) for its ambitious foray into dairy and juice businesses which it plans to roll out in the January-March quarter of 2015.
  • Papa John’s India Inc. plans to merge with the Pizza Corner brand to become the third-largest pizza chain in India.

Government Initiatives

In order to promote food processing industries, increase level of processing and exploit the potential of domestic and international market for processed food products, Vision Document-2015 was prepared by the Ministry, which envisaged trebling the size of investment in the processed food sector by increasing the level of processing of perishables from 6 per cent to 20 per cent, value addition from 20 per cent to 35 per cent and share in global food trade from 1.5 per cent to 3 per cent by 2015. To achieve these targets, an investment of Rs 100,000 crore (US$ 16 billion) is required by the year 2015.

Some of the major initiatives taken by the Government of India to improve the food processing sector in India are as follows:

  • Ms Harsimrat Kaur Badal, Union Minister for Food Processing Industries, Government of India has inaugurated the first of its kind Rs 136 crore (US$ 21.76 million) mega international food park at Dabwala Kalan, Punjab.
  • Ministry of Food Processing Industries has 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
  • The Food Safety and Standards Authority of India (FSSAI) under the Ministry of Health and Family Welfare has issued the Food Safety and Standards (Food Product Standards and Food Additives) Regulations, 2011 and the Food Safety and Standards (Contaminants, Toxins and Residues) Regulations, 2011 which prescribe the quality and safety standards, respectively for food products.
  • The Ministry of Food Processing Industries has taken some new initiatives to develop the food processing sector which will also help to enhance the incomes of farmers and export of agro and processed foods among others. The government has also approved the setting up of five numbers of Mega Food Parks in the states of Bihar, Maharashtra, Himachal Pradesh and Chattisgarh.
  • The Indian Institute of Packaging (IIP) has planned to offer a packaging solution to the famed Tirupati ‘Laddu’ to enhance its shelf life. They have also planned to install automatic vacuum packaging system for the packaging of ‘Laddu’ with higher shelf life.

Road Ahead

Further,the adoption of food safety and quality assurance mechanisms such as Total Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP) by food processing industry enable adherence to stringent quality and hygiene norms and thereby protect consumer health, prepare the industry to face global competition, enhance product acceptance by overseas buyers and keep the industry technologically abreast of international best practices.

The allocation of Rs 2,000 crore (US$ 319.98 million) as a separate National Bank for Agriculture and Rural Development (NABARD) fund for food processing industries during the Union Budget 2014–15 is all set to give a big boost to this sector in India.

Exchange rate used: INR 1 = US$ 0.0159 as on March 20, 2015

References: Ministry of Food Processing Industries (MoFPI), Agricultural and Processed Food Products Export Development Authority (APEDA), Media reports and Press Releases, Department of Industrial Policy and Promotion (DIPP), Press Information Bureau (PIB), Confederation of Indian Industries (CII)

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.

Posters

Brand India Pharma

PROCESSING PROSPERITY

Investment in the Indian food processing sector is estimated at US$ 25 billion, employing over 10 million people. The sector grew at 20 per cent per a...

+ More >

Brand India Pharma

IBEF Publications

IBEF Publication

India Now Magazine


India Now Business and Economy

English

+ More Publications >

IBEF Publication

Perspectives More

Loading...
Loading blogs ...

ideas More

Ideas

Virtually Yours
Brickwork India pioneered the concept of Remote Executive Assistant and Virtual Office, a knowledge outsourcing suite of solutions and services. In the process it has set new benchmarks in the BPO industry and made the world take notice.

JOIN IBEF.org

Join IBEF.org now. Enjoy FREE subscriptions downloads, updates and more.

Error

Already a member?
Login / Retrieve Password

Copyright © 2010-2015 India Brand Equity Foundation

All material, information, data, images or content on this website is subject to copyright or other applicable intellectual property laws and no part of it can be reproduced in any form (including paper or electronic form) without prior written consent and approval from IBEF. Infringements are subject to prosecution under the applicable laws. For consent related queries and conditions,
please write to info.brandindia@ibef.org

IndiaAn initiative of the Ministry of Commerce & Industry, Government of India