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Convergence of processing with nutrition may define next growth phase
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Thursday, 05 March, 2026, 13 : 00 PM [IST]
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Dr Renuka Mainde
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The food processing industry in India is rapidly emerging as a vital bridge in the nation's economy. The industry has been significantly contributing to the country’s gross domestic product (GDP), employment and exports, growing at an AAGR (annual average growth rate) of about 7.26% per annum for the past seven years. Food processing increases the value of agricultural products and reduces wastage, while also creating job opportunities and enhancing food security. MoFPI (Ministry of Food Processing Industries), for its part, hasn't been behind the curve, incentivising this growth through initiatives such as the Pradhan Mantri Kisan Sampada Yojana and the Production Linked Incentive (PLI) Scheme. The food processing sector is projected to reach about US$535 billion (?47 lakh crore) by FY2026, contributing nearly 7.7% to manufacturing output and supporting over 7 million jobs. Recognising its strategic importance, the Government of India has significantly increased budgetary support, allocating Rs. 4,364 crore to the Ministry of Food Processing Industries in Union Budget 2025-26. With long-term projections indicating the sector could exceed US$1.27 trillion by 2027, the food industry is poised to play a central role in India’s economic growth, food security, and nutrition transition.
Food security in India is no longer only about producing enough calories; it is increasingly about ensuring access to safe, affordable, and nutritious food for a large and diverse population. Food processing plays a crucial role in this shift from food security to nutrition security. Technologies such as freezing, dehydration, retort processing, and aseptic packaging help preserve perishable commodities and reduce seasonal shortages. The industry also enables large-scale fortification of staples such as edible oil, wheat flour, and milk, which is vital for addressing micronutrient deficiencies like anaemia and vitamin A deficiency. Moreover, efficient processing and storage systems help reduce price volatility in essential commodities, thereby improving food access for vulnerable populations.
One of the biggest challenges facing India’s food system is post-harvest loss and food wastage. Significant quantities of fruits, vegetables, and perishables are lost due to inadequate cold chains, poor storage, and fragmented supply chains. Reducing these losses is critical not only for improving farmer incomes but also for conserving water, land, and energy resources. The government has therefore prioritised infrastructure creation across the value chain—from farm gate to retail markets.
The Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) serves as the flagship umbrella programme for strengthening food processing infrastructure. The scheme focuses on modern preservation facilities, agro-processing clusters, backward and forward linkages, and cold chain development. Complementing this effort, the Mega Food Parks Scheme has approved dozens of integrated parks that connect farmers, processors, and markets through cluster- based infrastructure, thereby lowering logistics costs and improving efficiency. The PM Formalisation of Micro Food Processing Enterprises (PMFME) scheme supports the vast unorganised sector through credit-linked subsidies, branding assistance, and capacity building. The scheme’s “One District One Product” approach is particularly important for promoting regional specialties and empowering women-led enterprises.
Another transformative initiative is the Production Linked Incentive Scheme for Food Processing Industry (PLISFPI), designed to create global food manufacturing champions and promote Indian brands worldwide. The scheme is expected to boost investment, generate employment, and increase exports while encouraging innovation in value-added and health- oriented foods. Nutrition-focused food innovation represents another major opportunity. The growing burden of lifestyle diseases in India is driving demand for functional foods, fortified staples, millet-based products, plant-based proteins, and clean-label offerings. Government initiatives promoting millets and traditional foods are opening new markets for healthy processed products. The convergence of food processing with preventive healthcare and clinical nutrition—an area of increasing interest among nutrition professionals—will likely define the next phase of growth.
Despite strong progress, several structural challenges remain. Supply chains are still fragmented due to the dominance of smallholder farmers. Many micro and small food processors struggle with quality certification, food safety compliance, and access to affordable finance. Rural cold chain penetration is uneven, and logistics costs remain relatively high. Consumer awareness about nutritious processed foods is improving but still evolving, especially in semi-urban and rural markets. Addressing these bottlenecks through public-private partnerships, skill development, and digital integration will be critical.
Looking ahead, India’s food industry is well positioned to become a global leader if it sustains momentum in five key areas: scaling up processing of perishables, strengthening cold chain connectivity, promoting nutrition-sensitive processing, empowering MSMEs, and accelerating technology adoption. With continued policy support and private investment, the sector can simultaneously enhance farmer prosperity, reduce food wastage, improve nutrition outcomes, and boost exports.
In conclusion, India is entering a decisive decade for its food industry. The strong growth projections, increasing budgetary commitment, and expanding infrastructure pipeline signal a clear national priority.
(The author is a corporate nutritionist and visiting faculty, PGTD Home-sciences and RTM Nagpur University)
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