Foreign Direct Investment (FDI) in Multi-brand Food Retail is in the interest of both consumers and farmers as it will bring down food inflation, create more jobs and lead to rapid infrastructure development. The Ministry of Food Processing Industries has urged Prime Minister Narendra Modi to allow FDI in Multi-brand Food Retail. It expects globally established brands and multinational companies to promote technology transfer and therefore, a conducive environment is needed in which the sector can flourish. That way the Food Processing Industry in India can play a catalytic role of uplifting the farmers, controlling inflation, providing safe and healthy food, address malnutrition needs and ensure nation’s food security.

By allowing 100 % FDI in Multi-brand Retail the country has the potential to become the food factory for the world. Harsimrat Kaur Badal, the Minister for Food Processing Industries, claims to reduce food wastage by helping to modernise the Indian farmer with newer and efficient farming technologies as well. India is supposed to take its nascent levels of mere 10 % in Food Processing to the next level of 30 %.

Recent efforts by the Government to encourage greater innovations and enable the ease of doing business came through cheaper credit, identifying priority sector lending status for foods grown in India and others. Further, the 42 proposed Food Parks will significantly impact Food Processing levels.

The Food Processing Industry in India contributes as much as 11 % and 9 % of GDP in Agriculture and Manufacturing Sector respectively. It is one of the largest industries in India, ranked 5th in terms of production, consumption, export and expected growth. Also, it is considered having huge potential for elevating Agricultural Economy, raising farmer’s income, generating job employment and enhancing forex earnings.

In the past, the liberalisation and the growth of organised retail has made the Indian market more attractive for global players, with a large agricultural resource bade, abundant livestock and cost competitiveness. With a population size of 1.22 billion of which 604 million were under the age of 24 in 2011, this rising youth population is likely to increase India’s overall food consumption. Rising income levels, affluence and a growing middle-class drive the Food Processing Industry in India further. Till 2020 one-third of the population is expected to live in urban areas with an increased desire for branded food as well as increased spending power. Large distinct consumer segments are likely to support customised offerings and new categories and brands within each segment, the consumption will thereby increase in favour towards packaged and ready-to-eat foods. In addition to that, the Food Processing Industry in India also registered a steady rise in exports of food items, the main export destinations being Middle East and South East Asia.

Besides great opportunities in online food retailing, there is a vast untapped scope in organic foods and the need for terminal markets in Food Processing which will be key growth drivers of the agricultural GDP.

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