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How India doubled its food processing market in a decade
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Saturday, 31 May, 2025, 16 : 00 PM [IST]
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Bhuvnesh Gupta
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India’s food processing market has witnessed a seismic transformation over the past decade, doubling from Rs 30 trillion in 2015 to a projected Rs 60 trillion in 2025. This remarkable journey has been shaped by a confluence of factors—policy support, evolving consumer behaviour, digital innovation, and the rise of new-age B2B trade platforms that have brought unprecedented efficiency and scale to the sector.
This isn’t just a story of economic growth—it’s a structural overhaul of how food is processed, traded, and consumed in the country.
The Policy Push That Set the Wheels in Motion
A key catalyst behind this growth was the Government of India’s focused approach toward formalising and expanding the food processing sector. The Ministry of Food Processing Industries (MoFPI) launched several initiatives to reduce post-harvest losses, increase value addition, and generate employment. Flagship programs like the Mega Food Parks Scheme, integrated cold chain initiatives, and the Production Linked Incentive (PLI) Scheme for food processing played pivotal roles.
These schemes helped create infrastructure across the value chain—storage, transport, packaging, and retail. This government push not only improved the efficiency of the sector but also attracted substantial private investment, both domestic and foreign.
Changing Indian Consumer and the Demand for Processed Food
As incomes rose and urbanisation picked up pace, Indian consumers began demanding convenience and consistency. The working population—particularly in urban areas—shifted toward ready-to-eat, frozen, and packaged food categories. There was also a surge in demand for healthier, organic, and premium products.
This change in consumption patterns accelerated the need for robust food processing infrastructure that could ensure quality, safety, and shelf-life—giving rise to opportunities for manufacturers, millers, and distributors across the value chain.
The Unsung Hero: India’s B2B Trade Infrastructure
While government policy and rising consumer demand set the stage, the real engine of transformation has been the digitisation of India’s B2B food trade ecosystem.
Suppliers were often limited by their physical reach and depended heavily on traditional distributors or middlemen. This led to delayed payments, fragmented account reconciliation, and inconsistent demand.
Suppliers are expanding their market share by reaching buyers across cities and states with minimal friction. The digital layer enables visibility into buyer networks that were previously inaccessible.
Short-term credit is made available based on transaction history and platform analytics, allowing suppliers to operate at scale without choking cash flows.
Account matching and reconciliation, a long-standing bottleneck in B2B trade, is now seamlessly managed through integrated digital tools—bringing transparency and reducing payment disputes.
Suppliers using the platform are now recording up to 4x revenue growth compared to their offline operations. A mustard oil mill in Rajasthan that earlier served local retailers is now transacting with institutional buyers in five states. A flour processor in Madhya Pradesh that struggled with receivables now gets paid within industry-standard timelines with automated tracking.
This is more than digitisation—it is an evolution of trust, speed, and scale.
The Export Opportunity and Global Footprint
Another factor contributing to the doubling of India’s food processing market is its growing prominence in global exports. From frozen fruits and vegetables to processed dairy and ready-to-eat meals, Indian exporters have expanded into new territories—fuelled by strong international demand and improvements in food safety standards and traceability.
This export readiness, too, is supported by B2B networks. Platforms which facilitate bulk procurement and logistics, have played a quiet yet critical role in enabling exporters to secure consistent supply chains.
Social and Economic Impact
The growth of this sector hasn’t just benefitted businesses—it has touched lives across the socio-economic spectrum. Millions of jobs have been created in food parks, processing units, transport networks, and cold chains. Farmers have gained more stable markets for their produce. MSMEs and small-scale processors have found a level playing field via platforms that eliminate traditional barriers to scale.
Furthermore, as food safety standards improve and consumer education increases, the country is witnessing an improvement in public health outcomes as well—fewer adulterated products, better packaging, and more regulated distribution channels.
The Road Ahead: ?100 Trillion Within Reach?
With all eyes on India becoming a global food processing hub, experts believe the market could grow to ?100 trillion by 2030. The building blocks are in place—policy, infrastructure, demand, and digital systems.
What will define the next wave of growth is deeper collaboration across B2B ecosystems, further integration of financial services into trade platforms, and greater emphasis on sustainability and traceability.
India’s journey from Rs 30 trillion to Rs 60 trillion in food processing isn’t just a number—it’s a transformation rooted in resilience, reform, and real innovation. And it’s only the beginning.
(The author is co-founder at Poshn)
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