Go Back

Indian Food Industry

March, 2013


With a huge agriculture sector, abundant livestock, and cost competitiveness; India is fast emerging as a sourcing hub of processed food. India's food processing sector covers fruit and vegetables; spices; meat and poultry; milk and milk products, beverages, fisheries, plantation, grain processing and other consumer product groups such as confectionery, chocolates and cocoa products, soya-based products, mineral water, high protein foods etc.

The Indian food services industry is estimated to be nearly worth Rs 75,000 crore (US$ 13.79 billion) and is growing at a healthy compound annual growth rate (CAGR) of 17 per cent, according to a Franchise India report released at the Indian Restaurant Congress.

The Indian food services industry is anticipated to grow at a CAGR of around 12 per cent during 2012-2015, as per a RNCOS research report titled, 'Indian Food Services Market Forecast to 2015'.

Moreover, India's market for organic food consumption has also been recognised as one with the largest potential worldwide, as per RNCOS research report titled, 'Indian Organic Food Market Analysis'. The report further highlighted that the sector will grow at a CAGR of 15 per cent during 2011-2013.

Key Players

  • Nestle India Ltd has acquired 26 per cent stake in Indocon Agro and Allied Activities Pvt Ltd, which is engaged in milk collection business in western India
  • Indonesian food products company, Inbisco, plans to produce 20,000 tonnes of food products in the initial phase from its Sanand plant in Gujarat. It also plans to roll out products from January 2014
  • Your Foods, the fledgling spin-off from Priya Biscuits, is looking at exporting its range to the US, Australia, New Zealand, West Asia and East African markets. The biscuit market in India is estimated to be Rs 10,000 crore (US$ 1.84 billion) and the company is also gearing up to aggressively tap the medium and premium segment within the country over the next couple of years
  • Twinings India, a subsidiary of the UK-based Associated British Foods, is gearing up to bring malted drink brand Ovaltine to India. The tea major has earmarked Rs 50 crore (US$ 9.19 million) as investment for this fiscal and expects to make its top-line grow five times in the next three years
  • ITC will invest Rs 1,000 crore (US$ 184 million) in food and consumer goods sector in India in the next two to three years
  • McCain Foods India Pvt Ltd, a wholly-owned subsidiary of the Canadian major McCain Foods, will invest another US$ 69 million at its potato processing plant in Mehsana, Gujarat

Food Processing Industry

The Indian food processing industry accounts for 32 per cent of India's total food market. The industry is estimated to be worth US$ 121 billion, it is one of the largest industries in India, and is ranked fifth in terms of production, consumption and exports.

The fruits and vegetables export from India in April-December 2012 was recorded for Rs 37.02 billion (US$ 681.14 million). Of the total exports, fresh grapes was recorded to Rs 5.45 billion (US$ 110.72 million), while walnuts were Rs 1.29 billion (US$ 23.76 million) and fresh mangoes stood at Rs 2.23 billion (US$ 40.99 million).

The Ministry of Food Processing receives a number of proposals from private industries for establishing food processing industries in the country. The total amount released by the Ministry under the aforesaid scheme during 2012-13 (as on February 15, 2013) is worth Rs 145.74 crores (US$ 26.81 million).

The food processing industries attracted foreign direct investments (FDI) worth US$ 1,681.97 million between April 2000 to December 2012, according to the latest data published by Department of Industrial Policy and Promotion (DIPP).