In Context
∙ The Minister of Commerce & Industry highlighted the 150% growth in processed food exports over the last nine years.
About
∙ There is an immense potential of the Indian food market, catering to a domestic market of 1.4 billion and a global Indian diaspora of nearly three million people who relish Indian delicacies.
∙ India’s agricultural exports stood at an aggregate of about US$ 53 Billion.
∙ The government of India has set a vision for the sector to achieve a target of doubling its contribution to the GDP by 2030.
About Food Processing
∙ Food processing refers to the conversion of raw agricultural products into value-added products for human consumption.
∙ The processing is done through several processes, such as harvesting, cleaning, packaging, grading, preserving and transportation.
∙ The sector’s size is estimated to be around US$322 billion, and it is expected to reach US$543 billion by 2025, growing at a CAGR of 14.6%.
∙ The food processing industry in India is primarily concentrated in the northern and western regions of the country.
∙ The states of Maharashtra, Uttar Pradesh, Andhra Pradesh, Tamil Nadu, and Gujarat are the leading contributors to the sector. However, there is a huge untapped potential for the sector in the eastern and north-eastern regions of the country.
Significance of Food Processing Sector
∙ Economic Contribution: The Food Processing sector provides jobs not only in food production but also in packaging, distribution, marketing, and research and development.
∙ Food Safety: The industry plays a key role in maintaining and improving food safety standards. Processing methods often include steps to eliminate or reduce pathogens, contaminants, and spoilage microorganisms.
∙ Innovation: Food processing allows for the creation of a wide variety of food products by combining and transforming raw ingredients. This innovation contributes to diverse food choices for consumers.
∙ Export Opportunities: Processed food products often have a longer shelf life and are more suitable for transportation, making them key players in international trade.
∙ Fortification: Food processing allows for the fortification of certain products with essential nutrients, addressing nutritional deficiencies in populations.
∙ Energy Efficiency: Advances in food processing technologies contribute to more energy-efficient methods, reducing the environmental impact of food production.
Challenges related to Food Processing Sector
∙ Lack of cutting-edge infrastructure: Many food processing businesses operate in the small and medium enterprises (SMEs) sector, which often lacks the resources needed to upgrade their facilities and machinery to thinitiae latest technology.
∙ Lack of Cold Chain and Storage: The industry is also plagued by inefficient supply chains, inadequate storage and transport facilities, and a lack of access to credit and financing.
∙ Food Safety Issues: Contamination risks, whether biological, chemical, or physical, can lead to foodborne illnesses, damaging both consumer trust and industry reputation.
∙ Raw Material Sourcing: Variability in crop yields, weather conditions, and geopolitical factors can affect the availability and cost of key ingredients.
∙ Complex Regulations: The industry is subject to a complex web of regulations, licenses, and permits, which can be challenging for businesses to navigate.
Important Government Initiatives
∙ National Mission on food processing: Launched in 2012 as Centrally
∙ Sponsored Scheme (CSS). This mission aimed to encourage the establishment of food processing units, enhance the processing levels, and increase value addition in the food chain.
∙ Mega Food Park Scheme: A mega food park is an integrated facility that provides for storage, processing. Additionally, value additions to a large number of players in the food processing industry.
∙ Under the Mega Food Park Scheme, the Government of India provides financial assistance up to Rs. 50.00 Crore per Mega Food Park project.
∙ The Mega Food Park Scheme is based on the “Cluster” approach and envisages a well-defined Agri/ horticultural-processing zone containing state-of-the-art processing facilities with support infrastructure and well-established supply chain.
∙ Other initiatives: The Ministry is actively implementing three major schemes to promote the food processing sector: Pradhan Mantri Kisan SAMPADA Yojana (PMKSY), Pradhan Mantri Formalization of Micro Food Processing Enterprises (PMFME) scheme, and Production Linked Incentive (PLI) Scheme.
∙ Allowing 100% Foreign Direct Investment (FDI) approval under automatic route for the food processing sector.
Way Ahead
∙ There is a need for large-scale food processing, product branding, and export oriented strategy.
∙ Setting up intelligent food processing hubs equipped with cutting-edge technologies such as the Internet of Things (IoT), artificial intelligence (AI), and blockchain. These hubs have the capability to oversee the entire food supply chain, ensuring quality, traceability, and operational efficiency from the farm to the consumer’s table.
