Food processing - 'A Sunrise sector'

India's Food ecosystem offers huge opportunities for investments with stimulating growth in the food retail sector, favorable economic policies, and attractive fiscal incentives.

Through the Ministry of Food Processing Industries (MoFPI), GoI is taking all necessary steps to boost investments in the food processing industry in India. GOI has continued the umbrella PMKSY scheme with an allocation of INR 4600 Cr till March 2026. The Ministry has also been implementing two more flagship schemes:  

  • PM Formalization of Micro Food Processing Enterprises Scheme (PMFME) for providing financial, technical, and business support for the upgradation of existing micro food processing enterprises.

The exports of agricultural and processed food products rose by 13% in the nine months (April-December) of the current Financial Year 2022-23 in comparison to the corresponding period of FY 2021-22.

Click here to know more about Agro Processing Cluster Projects approved by MoFPI

Click here to know more about Mega Food Park Projects approved by MoFPI.

  • The total FDI received in the food processing sector from April 2000 till December 2022 was $11.79 Bn. The FDI equity inflow in the sector for the period of April 2021- March 2022 was $709.72 Mn. Moreover, the total FDI received in the food processing sector since April 2014 till December 2022 is $6 Bn.
  • India's food processing market may touch $470 Bn by 2025. Tier-II and Tier-III cities could mirror the trend visible in metropolitan areas, by consuming more processed food in the coming years.
  • India’s consumer spending to grow to $6 Tn by 2030.
  • The export of products under the Ready to Eat (RTE), Ready to Cook (RTC), and Ready to Serve (RTS) segments have registered a CAGR of 10.4% from 2011-12 to 2020-21. India exported more than $ 2.14 Bn worth of final food products in 2020-21. The major destination of RTE export in 2020-21 data is the U.S.A, U.A.E, and Nepal. The major exporting destination for RTC export in 2020-21 are U.S.A, Malaysia, and U.A.E
  • India's sugar exports grow by 291% since 2013-14, Sugar exports exceed 10 Mn tons for the first time. Sugar exports rise by 64.90% during 2021-22 alone.
  • India’s non-basmati rice exports witnessed an astounding growth of 109 % from $2925 Mn in FY 2013-14 to $6115 Mn in FY 2021-22

100% FDI is permitted under the automatic route in food processing industries in India.

100% FDI is allowed through the government approval route for trading, including through e-commerce in respect of food products manufactured or produced in India.

For further details, please refer FDI Policy

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    % share of GVA of agriculture and allied sector to total economy

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    Share in total employment

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    Share in India's exports

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    Cropping intensity

Explore Related Sub Sectors

World's largest producer of Spices, Milk and Pulses

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World's second largest producer of food grains, fruits, and vegetables

Industry Scenario

India’s food processing sector is one of the largest in the world and its output is expected to reach $535 Bn by 2025-26.

The Food Processing sector in India has a quintessential role in linking Indian farmers to consumers in the domestic and international markets. The Ministry of Food Processing Industries (MoFPI) is making all efforts to encourage investments across the value chain. The food processing industry has a share of 12.38% (at 3-digit of NIC classification) in the employment generated in all Registered Factory sector engaging approximately 1.93 Mn people. Unregistered food processing sector supports employment to 5.1 Mn workers as per the NSSO 73rd Round report. Major sectors constituting the food processing industry in India are grains, sugar, edible oils, beverages, and dairy products.

Under PMKSY, 41 Mega Food Parks, 356 Cold Chain projects, 60 Agro-Processing Clusters, 489 food processing units under Creation/Expansion of Food Processing & Preservation Capacities (CEFPPC), 61 Creation of Backward and Forward Linkages Projects & 06 Operation Green projects across the country have been approved.

The key sub-segments of the Food Processing industry in India are Fruits & Vegetables, Poultry & Meat processing, Fisheries, Food retail, dairy industry, etc.

Key facts:

  • Total Horticulture production in 2021-22 is estimated to be 341.63 MT.
  • India ranks 1st in milk production and contributes 23% to global milk production growing at a CAGR of about 6.2% to reach 209.96 MT in 2020-21 
  • India ranks 3rd in global egg production and produced at least 122.11 Bn nos. in 2020-21 with per capita availability of egg at 91 eggs per annum in 2020-21. 
  • In 2021-22, the country’s fish production has reached an all-time high of 16.24 MMT, showing 10.34 % growth.
  • Online grocery retail in India has seen a CAGR of over 50% and projected to grow to $10 Bn to 12 Bn by 2025.
  • The marine products exports from India touched $7,740 Mn during 2021-22 despite the heavy odds faced by the sector. It observed 30% higher growth as compared to 2020-21. The USA, China, and Japan are the top 3 favorite destinations of Indian marine exports.  Exports to these three countries contributed 63% of exports.
  • The export of other cereals increased from 102 MT in 2019-20 to 521 MT in 2020-21.
  • India ranks 8th in meat production in the world. Meat production in the country has increased from 6.69 MT in 2014-15 to 8.80 MT in 2020-21 (Provisional). 
  • As per 4th advance estimates, the estimated production of rice is 130.29 Mn Tonnes, Wheat is 106.84 Mn Tonnes, and Nutri/Coarse cereals is 50.90 Mn Tonnes for the year 2021-22.
  • During SS 2021-22, India exported 110 LMT sugar and became second largest exporter of sugar in the world and earned about INR 40,000 Cr worth of foreign exchange for the country.
  • As per the latest Annual Survey of Industries 2019-20, food processing sector contributed 12.22% of total persons engaged in the registered manufacturing sector. 
  • Non-Basmati Rice has emerged as India’s top export item among the many agricultural and processed food product exports under APEDA basket, with the export of $4,663 Mn in nine months of 2022-23.


  • Agri-commodity hub

    Largest producer of several agri-commodities

  • Huge consumer base

    1.3 Bn consumers with increasing demand for branded food

  • Strong economy

    India is the fastest growing largest economy in the world

  • Conducive policies

    Proactive government policies with attractive fiscal incentives

  • One District, One Product (ODOP)

    Under ODOP scheme, 135 district-specific unique products for 728 districts have been identified. across the country


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Asked Questions

A registered person is sending semi-cooked food from his manufacturing unit at Gurugram to his branch in Delhi. Is he required to pay any tax?

In accordance with the provisions of Section 25(4) of the CGST Act, 2017, branches in different States are considered as distinct persons. Further, as per Schedule I, this constitutes supply made in the course or furtherance of business between distinct persons even if made without consideration. As it is an inter-State supply, the registered person is required to pay IGST.

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What is FSSA, 2006 and why this Act is needed?

FSSA 2006 is an Act enacted to keep with changing needs/requirements of time and to consolidate the laws relating to food and establish the Food Safety and Standards Authority of India. The Act was needed to bring out a single statutory body for food laws, standards setting and enforcement so that there is one agency to deal and no confusion in the minds of consumers, traders, manufacturers and investors which was due to multiplicity of food laws.

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What is National Livestock Mission?

National Livestock Mission is an initiative of the Ministry of Agriculture and Farmers Welfare. The mission, which commenced from 2014-15, has been designed with the objective of sustainable development of the livestock sector. 
NABARD is the subsidy channelizing agency under Entrepreneurship Development & Employment Generation (EDEG) component of National Livestock Mission. This includes:
1) Poultry Venture Capital Fund (PVCF).
2) Integrated Development of Small Ruminants and Rabbit (IDSRR).
3) Pig Development (PD).
4) Salvaging and Rearing of Male Buffalo Calves (SRMBC).

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What is interest subvention to Small and Marginal Farmers against Negotiable Warehouse Receipts?

In order to discourage distress sale of produce by farmers and to encourage them to store their produce in warehouses against warehouse receipts, Government of India (GoI) had introduced a scheme in 2011-12 for extending concessional loans to the farmers against negotiable warehouse receipts. Post-harvest loans against Negotiable Warehouse Receipts (NWR) provided by banks to Small and marginal farmers (SF/MF) having Kisan Credit Cards, would be eligible for interest subvention, for a period of up to six months on the same rate as available to crop loan. 

SF/MF, who have not availed crop loans through banking system, would not be eligible. No additional subvention towards prompt repayment, as is available for crop loans, is envisaged under the scheme.

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Can foreign investors, private equity arms of foreign firms become members in SPV and invest in creation of common infrastructure in form of equity?

Yes, such firms can join hands with Indian promoters to form the Special Purpose Vehicle and invest in the project by way of contributing equity. It may also be noted here that foreign direct investments in food processing sector is allowed under automatic route in India. However, adequate documents with regard to net worth and other relevant financial details in respect of such firms must be provided with the EOI proposal.

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