INDIA ADDA – Perspectives On India

IBEF works with a network of stakeholders - domestic and international - to promote Brand India.



Dikshu C. Kukreja
Dikshu C. Kukreja
Mr. V. Raman Kumar
Mr. V. Raman Kumar
Ms. Chandra Ganjoo
Ms. Chandra Ganjoo
Sanjay Bhatia
Sanjay Bhatia
Aprameya Radhakrishna
Aprameya Radhakrishna
Colin Shah
Colin Shah
Shri P.R. Aqeel Ahmed
Shri P.R. Aqeel Ahmed
Dr. Vidya Yeravdekar
Dr. Vidya Yeravdekar
Alok Kirloskar
Alok Kirloskar
Pragati Khare
Pragati Khare
Devang Mody
Devang Mody
Vinay Kalantri
Vinay Kalantri

An Overview of the Indian Food Processing Sector

An Overview of the Indian Food Processing Sector

India has great potential to become a global processed food export powerhouse as it includes a rich agricultural resource base, strategic geographic location and proximity to food-importing nations, and an extensive network of food processing training, academic, and research facilities. The Indian food processing industry has grown rapidly with an average annual growth rate of 8.3% in the past 5 years. With a market size of US$ 866 billion in 2022, the food industry will play a vital role in the economy's growth. The domestic food market is projected to grow by over 47% between 2022 and 2027, reaching US$ 1,274 billion. In 2023, the food market will generate US$ 963 billion in revenue and the market is anticipated to expand at a CAGR of 7.23% between 2023-27.

India's agricultural exports surged by nearly one-fifth (19.92%), crossing the US$ 50 billion milestone, covering 50% of the world’s rice market in FY22. Exports of processed food climbed from US$ 8.56 billion in 2020-21 to US$ 10.42 billion in 2021-22. Furthermore, in 2021-22, processed food exports accounted for 22.6% of the overall agri-food exports. The Indian food processing sector has attracted more than US$ 6 billion worth of foreign direct investment (FDI) since 2014-15. Moreover, the food processing industry has attracted FDI equity worth US$ 709.72 million during 2021-22. The total FDI received in the food processing sector is US$ 11.79 billion from April 2000 till December 2022.

Food Processing Industry in India
India’s food processing sector is one of the largest in the world and it is expected to reach US$ 535 billion by 2025-26. The rise in the preference for processed food is driven by two worldwide consumer megatrends

  • The increasing demand for convenience
  • A growing emphasis on health and wellness.

Different Techniques of the Food Processing Industry






This type of food processing method including canning, freezing, drying, and fermenting is used to increase the shelf life of food products. These methods aid in stopping the development of bacteria and other germs that might ruin food.



Techniques used to prepare food products for consumption, such as cooking, baking, and grilling, are included in this type of food processing. These methods can assist in enhancing the flavour, texture, and presentation of food products.



Techniques used to prepare food products for consumption, such as cooking, baking, and grilling, are included in this type of food processing. These methods can assist in enhancing the flavour, texture, and presentation of food products.



In this method of food processing, nutrients like vitamins and minerals are added to food products to improve their nutritional value. Foods that are naturally lacking in nutrients, like bread and cereals, are frequently enriched.



In this type of food processing, nutrients are added to food products to satisfy specific dietary demands, such as folic acid in flour and iron in breakfast cereals. Fortification is frequently used to address issues with public health or to meet the dietary requirements of populations, such as youngsters or pregnant women




This method of food processing includes separating a component or ingredient from a food product, such as oil extraction from seeds or protein extraction from milk.



This method of food processing entails removing water or other ingredients from a food product. Examples include the concentration of fruit juice or the creation of tomato paste.


Processing aids


In this type of food processing, chemicals or other materials are used to enhance the processing or preservation of food products, such as the use of acids or enzymes to enhance the fermentation of foods or the use of preservatives to increase shelf life.

Industry Segments

The food processing industry in India is made up of 5 segments including grains, cereals and pulses, fruits and vegetables, meat and poultry, dairy products and processed foods.

  • Grains, cereals, and pulses

India is the largest producer of rice, wheat, and other grains including corn, sorghum, and millets in the world. India has a substantial grain processing sector. with the majority of the nation's grain production going towards food processing. The industry comprises the processing of cereals and pulses into many forms, such as flakes, puffed cereals, and ready-to-eat snacks, as well as the milling of grains to generate flour, rice, and other products.

  • Fruits and vegetables

India is a significant producer of a variety of fruits and vegetables, with the industry making up around 28% of the nation's overall agricultural output. These items are highly perishable and have a limited shelf life, hence the food processing industry is essential in processing and preserving them. The sector includes the preparation of fruit and vegetable juices, jams, and pickles, as well as the processing of fresh and frozen fruits and vegetables.

  • Meat and poultry

India is a major producer of beef, mutton, and poultry, and the country's meat and poultry industries are expanding quickly. These items, which include the manufacturing of frozen meat, meat products, and poultry products, are processed and preserved with the help of the food processing sector.

  • Dairy products

India is the world's largest producer of milk, and the dairy sector is a significant part of the nation's food processing business. The industry involves the transformation of milk into a variety of dairy products, including butter, cheese, yoghurt, and others.

  • Processed foods

In India, the processed food sector produces a wide variety of food items, including convenience foods, ready-to-eat meals, and snacks. The industry is supported by a robust supply chain that comprises primary processors and food processing companies.

Exports in the Indian Food Processing Industry
The export goal for agricultural and processed food products for the fiscal years 2022–23 was set at US$ 23.6 billion, of which US$ 19.694 billion i.e., 84%, had been accomplished by December 2022.

During 2011-12 to 2020-21, the export of goods under the Ready to Eat (RTE), Ready to Cook (RTC), and Ready to Serve (RTS) divisions saw a CAGR of 10.4%. India exported finished food goods worth more than US$ 2.14 billion in 2020-21. The United States, the United Arab Emirates, and Nepal are the top three RTE export destinations in 2020-21. In 2020-21, the primary exporting destinations for RTC are the United States of America, Malaysia, and the United Arab Emirates.

As depicted in the below graph, there is a 39.79% increase in the processed fruits and vegetables segments followed by a 33.39% increase in the other processed foods, and a 6.4% rise in the livestock products from April- December 2022-23 to April-December 2021-22.


in the Food Industry

India is the world's largest dairy producer, but it ranks 46th in terms of export. Similarly, India is the second-largest producer of vegetables but ranks 15th in the global industry.

In terms of worldwide exports, the processed food category is increasing far faster than the unprocessed food category - secondary and higher processed foods are growing at 5-6% CAGR, while unprocessed and primary foods are growing at 1-3% CAGR.

The demand for processed food products is being driven by increased urbanisation, higher disposable incomes, the growth of nuclear families, and a preference for convenience food goods. Furthermore, selling food in processed form allows you to charge a greater price and hence capture a larger economic value. For instance, according to an estimate by the RBI, manufacturing prepared meals adds 30% value to the product whereas processing meat adds 12.7%.

As depicted in the below table, India has a solid position in terms of production, but its position deteriorates in terms of food product export, particularly in processed form across all categories. Hence, it is imperative that the industry, along with all stakeholders throughout the value chain, unite and make concentrated efforts in order to establish a strong position in global processed food exports.



India’s total produce (US$ billion), Rank

India’s total export

(US$ billion),%, Rank

India’s processed export

(US$ billion), %, Rank




116, 2nd

8.7, 7%, 5th

1.1, 0.8%, NA

Major exporters of various food grains.


Fruits & Nuts

69, 2nd

1.3, 1%, 25th

0.5, 0.9%, 18th

Advancement of new technology to reduce wastage levels and increasing focus on processed food products.



75, 2nd

1.2, 1.5%, 15th

1.7, 3.6%, 18th



92, 1st

0.18, 0.2%, 46th

0.18, 0.2%,41st

Huge demand for Value Added Dairy Products i.e. Cheese, custard, Flavoured Milk.



3.9, 5th

3.1, 2.3%, 15th

0.1, 0.4%, 20th

Huge scope of Export to different Countries with the increasing demand for frozen foods. Innovation in product development such as ready-to-cook, ready-to-eat, canned and frozen food.



16, 2nd

5.1, 5%, 4th

0.7, 4.6%, 4th


Tea Coffee and Spices

5, 3rd

3.6, 7.3%, 3rd

1.0, 11%, NA

Advancements in Quick Service Restaurants (QSRs) and changing food habits will increase demand in the beverages sector.



8, 4th

2.7, 6.5%, 2nd

0.3, 3.7%, NA



34, NA

5.1, NA

0.4, NA



419, 2nd

31, 2.5%, NA

6, 1.2%, NA

Investing in Improving Packaged Foods manufacturing capacities.

Source: Federation of Indian Chambers of Commerce & Industry (FICCI0 and BCG Report

Government Initiatives

  • Pradhan Mantri Kisan Sampada Yojana (PMKSY)
    A centrally sponsored scheme, Pradhan Mantri Kisan SAMPADA ((Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters) Yojana, has been given a financial outlay of US$ 731.4 million (Rs. 6,000 crore) for the period 2016 to 20. It is a comprehensive package which will result in the creation of modern infrastructure and efficient supply chain management from the farm gate to the retail outlet. It will stimulate the expansion of the country's food processing sector. It will also help deliver greater returns to the farmers’ income, creating huge employment opportunities, particularly in rural regions, reducing agricultural waste, raising processing levels, and enhancing the export of processed foods. The following schemes will be implemented under PM Kisan SAMPADA Yojana :
    • Mega Food Parks
    • Integrated Cold Chain and Value Addition Infrastructure
    • Creation/ Expansion of Food Processing/ Preservation Capacities (Unit Scheme)
    • Infrastructure for Agro-processing Clusters
    • Creation of Backward and Forward Linkages
    • Food Safety and Quality Assurance Infrastructure
    • Human Resources and Institutions
  • PM Formalisation of Micro Food Processing Enterprises Scheme
    Under the Aatma Nirbhar Bharat Abhiyaan, the centrally sponsored scheme, the Pradhan Mantri Formalisation of Micro food processing Enterprises (PMFME) Scheme was launched on June 29, 2020. This scheme is currently being implemented in 35 states and union territories with the goal of improving the existing micro-enterprises in the unorganized segment of the food processing industry and the formalisation of the sector. It also includes US$ 487.61 (Rs. 40,000) in financial assistance for working capital and the purchase of small tools for each member of the Self Help Group (SHG) involved in food processing operations. Over 1 lakh SHG members have been identified and a total of US$ 24.74 million (Rs. 203 crore) has been granted.
  • Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)
    The Production Linked Incentive Scheme for Food Processing Industry (PLISFPI), a central sector scheme has been allocated a financial outlay of US$ 1.32 billion (Rs. 10,900 crore) for the period of 2021-22 to 2026-27. It aims to assist the emergence of global food manufacturing champions commensurate with India's natural resource endowment and to encourage Indian brands of food products in foreign markets. By 2026-27, the scheme's implementation would enable an increase in processing capacity, resulting in a processed food output of US$ 4.07 billion (Rs. 33,494 crore) and the creation of roughly 2.5 lakh jobs.

Road Ahead
Due to social media and digital knowledge, the Covid-19 pandemic has expanded the acceptability of processed foods, and customer demand for more ethical and environmentally friendly products is expanding. Agriculture and allied activities are the backbone of the Indian economy. More than half of the Indian population depends on it for a living. Thus, increasing the gross value addition in the agricultural industry will be a critical lever in improving the country's socioeconomic conditions. India has the potential to become the global food supply hub and boost its export share in the post-Covid-19 future. For the sector to remain competitive, it is essential to have scale, quality, and cost-effective export capabilities that meet international certification criteria.