The Indian food processing industry accounts for 32 percent of the country’s total food market. It contributes around 8.80 and 8.39 percent of Gross Value Added (GVA) in Manufacturing and Agriculture respectively, 13 percent to India’s exports and is 6 percent of total industrial investment.

Factors contributing to its growth of the food processing industry

• Strong domestic demand: India has one of the largest working populations in the world and, with a rise in disposable income, this segment of the population is also becoming the biggest consumer of processed foods in the country.
• Supply side advantages: High level of agricultural production – large livestock base, wide variety of crops, inland water bodies and a long coastline, that help increase marine production.
• Export opportunities: Proximity to key export destinations, greater integration with the global economy.
• Proactive government policy and support: It encourages collaborative farming and integration with cultivators, especially FPOs/Cooperatives for the benefit of industry and farmers.

It is said that due to its immense potential in value addition, the food-processing sector can address the woes of the farmers and double farmer’s income as highlighted below

• The food processing sector links agriculture, manufacturing sector and final consumers; and adds significant value to agriculture produce through processing technologies. The added value, when it flows back to farmers via the value chain along with the value realised through wastage prevention, can add significantly to farmers’ income.
• The sector has also grown at a faster CAGR of 9.5 percent as compared to agriculture’s fiveyear CAGR of 3.4 percent. According to KPMG, this sector will reach USD 535 billion by 2025 at a CAGR of 15 percent, which indicates significant potential for increasing farmers’ income through processing. The sector also aims to add 9 million jobs by 2024.
• It will help reduce post-harvest losses through efficient storage and transportation. The postharvest/in transit wastage accounts for approximately 40 percent of the total food wastage in India compared to 28 percent globally and results in significant erosion of farmer income. The impact is more so in high-value crops, such as fruits and vegetables, keeping farmers away from reaping benefits.
• Farmers engaged in the production of low-value crops can add value and increase household income through primary and secondary processing creating higher value products.

In this regard, the government has come up with several schemes like PM KISAN Sampada Yojana and Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PM-FME Scheme). Food processing has the potential to lift millions of Indians out of poverty and malnutrition. Therefore, the government must provide developmental support to small-scale enterprises along with attracting big-ticket domestic and foreign investments.