Food Processing

Growth Drivers

  • Liberalisation and the growth of organised retail has made the Indian market more attractive for global players; with a large agricultural resource base, abundant livestock and cost competitiveness, India is fast emerging as a sourcing hub of processed foods
  • 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.
  • One-third of the population will be living in urban areas by 2020.
  • Increasing desire for branded food as well as increased spending power.
  • Large distinct consumer segments to support customised offerings/ new categories and brands within each segment.
  • Consumption in India is driven towards packaged and ready-to-eat foods.
  • Favourable economic & cultural transformation, shift in attitudes & lifestyles, consumers are experimenting with different cuisines, tastes and new brands. There is an increase in awareness and concern for wellness and health, high protein, low fat, wholegrain and organic food.
  • Exports of food items have been rising steadily, the main export destinations being Middle East and South East Asia.

Reasons to Invest

  • A rich agriculture resource base - India was ranked No.1 in the world in 2013 in terms of production of bananas, mangoes, papayas, chick peas, ginger, lemons & limes, whole fresh buffalo milk, goat milk and buffalo meat.
  • India ranks second in the world in the production of sugarcane, dry beans, lentils and safflower oil. Further, India is at third position in the production of cabbages, cashew nuts, cauliflower, coconuts, garlic, onions, green peas, potatoes, rice paddy, tea, wheat and tomatoes.
  • The country’s gross cropped area amounts to 195.25 Million Hectares, with cropping intensity of 139%. The net irrigated area is 65.26 Million Hectare.
  • A total of 127 agro-climatic zones have been identified in India.
  • Strategic geographic location and proximity to food-importing nations makes India favourable for the export of processed foods.
  • Extensive network of food processing training, academic and research institutes.
  • 42 mega food parks are being set up in Public Private Partnership (PPP) at an investment of INR 98 Billion. The parks have around 1,200 developed plots with basic infrastructure enabled that entrepreneurs can lease for the setting up of food processing and ancillary units.
  • The cost of skilled manpower is relatively low as compared to other countries.
  • Attractive fiscal incentives have been instated by central and state governments and these include capital subsidies, tax rebates, depreciation benefits, as well as reduced custom and excise duties for processed food and machinery.
  • Major global players in the food domain are already present in India.
  • 138 cold chain projects are being set up to develop supply chain infrastructure.
Food Processing

Foreign investors