Snapshot

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), the Government of India is taking all necessary steps to boost investments in the food processing industry in India. The government has sanctioned 41 food parks funded under the Mega Food Parks Scheme of which 38 have final approval. In 2014, there were only 2 Mega Food Parks in the country. As of 1 August 2021 there are 22 Mega Food Parks are functioning in the country. Now the target is to take their number to more than 40.

India records close to 15% rise in export of agricultural and processed food products in April-October.

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

  • By 2025, India’s food processing industry 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 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

  • %

    Share in India's food market

  • %

    Share in total employment

  • %

    Share in India's exports

  • %

    Cropping intensity

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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 engages approximately 1.93 mn people in around 39,748 registered units with fixed capital of $32.75 bn and aggregate output of around $158.69 bn. Major sectors constituting the food processing industry in India are grains, sugar, edible oils, beverages, and dairy products.

Under PMKSY, 41 Mega Food Parks, 353 Cold Chain projects, 63 Agro-Processing Clusters, 292 Food Processing Units, 63 Creation of Backward & Forward Linkages Projects & 6 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:

  • 296.65 mn tonnes of horticulture food grains in 2019-20
  • Milk production of 198.4 mn tonnes during 2019-20
  • Ranks 3rd in the world in Egg production with 114.38 billion in 2019-20
  • Second largest producer of fish in the world — total fish production in 2019-20 was 14.16 MT with 7.56% of Global production
  • Food grocery and food services segments, growing at a CAGR of 25% and 15%, respectively, are majorly dominating the Food Retail Sector of India.
  • India shipped 12,89,651 MT of seafood worth $6.68 bn during 2019-20
  • The export of other cereals increased from $44.9 mn in April-June 2020 to $231.4 mn in April-June 2021
  • The export of meat, dairy and poultry products increased from $483.5 mn in April-June 2020 to $1022.5 mn in April-June 2021

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

  • Atmanirbhar Bharat

    PLI schemes worth INR 10,900 crores introduced under Atmanirbhar Bharat 3.0

  • 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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Production Linked Incentive (PLI) Scheme

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in Food Products for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat.

  • INR 10,900 cr

    Scheme Outlay

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FAQs

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.

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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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