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Food processing sector needs to ensure products conform to global stds
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Thursday, 23 November, 2017, 08 : 00 AM [IST]
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Our Bureau, New Delhi
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While the Indian food processing industry, estimated to be worth $121 billion, presents an opportunity for growth, it needs to focus on product conformity with global standards and quality, together with factors like logistics traceability and safety, quality of packaging and delivery.
These were the findings of a joint study, titled Food processing sector - Challengers and growth enablers, by the Associated Chambers of Commerce and Industry of India (ASSOCHAM) and Grant Thornton.
“There is a need for policy intervention and field-level changes for India to develop global competitiveness in many related sub-sectors and ensure that they are firmly entrenched in global value chains,” it added.
The study, however, noted that significant reforms undertaken by both the Central and state governments - be it 100 per cent foreign direct investment (FDI) under the government approval route in trading, including through e-commerce, in respect of food products manufactured or produced in India; enhanced investment in food processing; proactive steps simplifying ease of doing business, delisting of horticulture crops or insurance schemes to support the vulnerable farmers - will make the sector more competitive and market-oriented.
It added that even marginal reductions in post-harvest losses of fruits and vegetables, which are to the tune of about 25-30 per cent, are bound to give better returns and improve farmers’ incomes.
The study stated that there was a huge scope for large investments in food processing technologies, skill development and equipment, as it has been estimated that the total food production in India will double in the next 10 years.
It added that fast growth in food processing and simultaneous improvement in the development of value chain were of great importance to achieve favourable terms of trade for India’s agriculture sector, both in the domestic and international markets.
“Given the trade in production of food commodities, the food processing industry in India is on an assured track of growth and profitability,” the study said, adding that it was expected to attract phenomenal investment in capital, human, technological and financial areas.
“The Indian food and retail market is projected to touch $482 billion by 2020 from $258 billion in 2015,” the study said, adding that the country’s food processing sector had the potential to attract investment worth $33 billion and generate employment of nine million persons’ days by 2024.
With globalisation and increasing trade across the borders, approximately 460 million tonne (MT) of food, valued at $3 billion, is traded annually. India has thus a great potential for global trade in agricultural and processed food products.
The share of food processing exports in the total exports was approximately 12 per cent in the last few years.
Between financial year (FY) 2011 and 2015, India’s exports of processed food related products have been growing at a compounded annual growth rate (CAGR) of 23.3 per cent.
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