Since Mr. Narendra Modi took over as the Prime Minister in May 2014. a rather gradual economic recovery can be observed. The mood of the economy has improved significantly overall since the change of government. Foreign Direct Investments (FDI) during the period April 2014 to February 2015 at 28.8 billion USD were 39% higher than in the same period last year. The international economy to the subcontinent is looking with renewed interest. Indian Entrepreneurs are very optimistic about the future of the economy, however, they are still investing conservatively. Falling crude oil prices and the relatively moderate Inflation figures provide sufficient scope for interest rate cuts by the Reserve Bank of India. That should give the Indian companies more opportunities for investments and further stimulate the economy.
India is one of the largest food manufacturers in the world. The market volume of Food industry was 41.3 billion USD in 2014. The need for food and packaging machinery is processed mainly by the growing demand for processed food. The Indian government declared the expansion of the food processing industry a priority and has integrated the sector in the “Make in India” campaign.
The Ministry of Food Processing, indicates the following segments within the Food Processing industry:
- Dairy, fruits & vegetable processing
- Grain processing
- Meat & poultry processing
- Consumer foods including packaged foods, beverages and packaged drinking water.
960 million USD will be invested in this industry in the next few years. Investments by large food manufacturers in refrigerated warehouses and storage facilities are expected as well as machinery equipment for processing and packaging. Over 10 million people are already employed in this industry.
As part of the “Make in India” campaign the government is advertising aggressively for investments, especially in the manufacturing sector. In order to improve the business environment and attract foreign investment, the government is also revising the land acquisition law and plans to expand the Infrastructure rapidly. The simplification of authorization processes and the labor legislation has already been initiated. The credit costs are, however, still high. Although, the decreasing inflation could offer scope for interest rate cuts and make a positive impact on investments. Data analysis of the Centre for Monitoring Indian Economy (CMIE) shows 2,022 new announced projects for 2014/15 worth 137.8 Billion Euro. The number compared to the same period last year is higher by 13 %.
The Confederation of Indian Industry (CII) has estimated that the foods processing sector has the potential of attracting 33 billion USD of investment in 10 years and generate employment of 9 million person-days. Ministry of Food Processing Industries has a scheme for human resource development (HRD) in the food processing sector. The HRD scheme is being implemented through State Governments under the National Mission on Food Processing. Food Safety and Standards Authority of India has the mandate to develop standards and also to harmonise the same with International Standards consistent with food hygiene and food safety requirements and to the conditions of India’s food industry. The food processing sector in India is geared to meet the international standards.
The most crucial challenge today that the Indian food processing industry is facing is the lack of suitable infrastructure in terms of cold chains, packaging centres, modernized abattoirs etc. Improvement in general infrastructure is also a must for the industry to progress.
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