The Food Processing Industry in India is yet one of the largest industries of the country and holds great potential to grow further. To provide the ideal conditions and to close the gap between the producers and the consumers, the Indian Government is building 42 mega food parks across the country to give a push to the industry.
On a global perspective India ranks second among the world’s largest food producers. Major segments thereby are grain milling, sugar, edible oils, beverages, fruits and vegetables processing and dairy products. Out of the total food market the Food Processing Industry in India accounts for about 32 %.
The importance of it in India is indicated by its contribution to the Indian economy: about INR 845.22 Billion are contributed to the Gross Domestic Product (GDP) and the share of Food Processing sector in GDP of manufacturing sector lies around 9.8%. By generating 13.04 % of employment in all registered factory sector, the Food Processing industry in India plays an important role regarding the labour market as well.
Drivers are mainly to be seen in the increasing population and its income level in India and thus increasing consumption and changes in the food basket. 604 million people out of a total population size of 1.22 billion are under the age of 24 and this large young age category is likely to increase India’s overall food consumption. By the growing affluence and middle-class in India the spending power increases as well and thereby the desire for branded food. By higher awareness and concern for wellness and health, high protein, low fat, wholegrain and organic food, the demand shifted towards experimental cuisines, tastes and new brands.
In addition to that, the Indian Government provides a favourable frame for further growth of the Food Processing Industry in India. As it is regarded as a priority sector in the new manufacturing policy in 2011, financial assistance for setting up and modernizing food processing units, creation of infrastructure, support for research and development in addition to other promotional measures are provided through several Plan Schemes.
Another very important measure taken by the government to encourage the Food Processing Industry in India is the special financial fund of INR 2.000 Crore for extending affordable credit to designated food parks and the individual processing units in the designated food parks at concessional rates. The Food Processing Ministry sanctioned thereby 42 projects throughout the country for building up mega food parks until 2019. A mega food park offers various facilities to food processors, farmers, retailers and exporters, helping achieve faster growth for the Food Processing Industry in India. It aims facilitating the establishment of a strong Food Processing Industry backed by an efficient supply chain, which includes collection centres, a central processing centre (CPC) and cold chain infrastructure. The purpose thereby is to attract investment and due to the changing food habits with lifestyle and the growing demand for food, the mega food parks are supposed to help understand the existing trends in the mega food parks are supposed to help understand the existing trends in Food Industry, understand the consumption of certain foods and predict the need for future. For farmers, who do not have access to refrigerated warehouses and proper transport facilities adequate and appropriate storage, facilities are thereby provided. The idea behind is to preserve and elongate the shelf-life of food in order to reduce wastage.
In the Food Processing Industry in India government allows further Foreign Direct Investment (FDI) up to 100 % in the automatic route for most food products. Foreign investors yet in the market are for example Kraft (USA), Nestlé (Switzerland) or Unilever (Anglo Dutch).
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