Snapshot

Food processing - 'A sunrise sector'

India's food ecosystem offers huge opportunities for investments with stimulating growth in the food retail sector, favourable economic policies and attractive fiscal incentives. The Food & Grocery market in India is the sixth largest in the world. Food & Grocery retail market in India further constitutes almost 65% of the total retail market in India.

The Government of India through the Ministry of Food Processing Industries (MoFPI) is also taking all necessary steps to boost investments in the food processing industry. The government has sanctioned 39 Mega Food Parks (MFPs) to be set up in the country under the Mega Food Park Scheme. Currently, 18 Mega Food Parks have become functional.

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

  • By 2024, the Food Processing industry will potentially attract $33 bn investments and generate employment for 9 million people
  • By 2025, India’s food processing sector is expected to be worth over half a trillion dollars
  • By 2030, Indian annual household consumption to treble, making India 5th largest consumer

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

100% FDI is allowed through 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

  • %

    Share in India's food market

  • %

    Share in total employment

  • %

    Share in India's exports

  • %

    Cropping intensity

Business opportunities in food processing in india

World's largest producer, consumer & exporter of spices

Food processing business in india

World's largest processor, producer and consumer of cashew nuts

food business in india

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

Industry Scenario

The Processed food market is expected to grow to $ 543 bn by 2020 from $ 322 bn in 2016, at a CAGR of 14.6%.

Food processing has an important role to play 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 industry engages approximately 1.85 mn people in around 39,748 registered units with fixed capital of $ 32.75 bn and aggregate output of around $ 158.69 bn. Major industries constituting the Food processing industry are grains, sugar, edible oils, beverages and dairy products.

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

Key facts:

  • 311.71 mn tonnes of horticulture crop production in 2017-18
  • Milk production of 176.3 mn tonnes during 2017-18 with per capita availability of milk at a level of 375 grams per day in 2017-18
  • Egg production of around 95.2 bn during 2017-18
  • Total fish production was 12.6 mn tonnes during 2017-18
  • Food Retail market is majorly dominated by Food Grocery (growing at CAGR 25%) and Food Services (growing at CAGR 15%) segments.

GROWTH DRIVERS

  • 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

Major Investors

Data On Map

Mega Food Parks in India

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FAQ

Frequently
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.

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.

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).

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.

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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