The food processing industry provides vital linkages and synergies between industry and agriculture.
The food processing industry in India is one of the largest in terms of production, consumption, export and growth prospects. The government has accorded it a high priority, with a number of fiscal reliefs and incentives, to encourage commercialisation and value addition to agricultural produce, for minimising pre-/post-harvest wastage, generating employment and export growth.
India's food processing sector covers a wide range of products - fruit and vegetables; meat and poultry; milk and milk products, alcoholic beverages, fisheries, plantation, grain processing and other consumer product groups like confectionery, chocolates and cocoa products, Soya-based products, mineral water, high protein foods and so on.
The Indian food processing industry is one of the largest in the world in terms of production, consumption, export and growth prospects. Earlier, food processing was largely confined to the food preservation, packaging and transportation, which mainly involved salting, curdling, drying, pickling, etc. However, over the years, with emerging new markets and technologies, the sector has widened its scope. It has started producing many new items like ready-to-eat food, beverages, processed and frozen fruit and vegetable products, marine and meat products, etc. It also includes establishment of post-harvest infrastructure for processing of various food items like cold storage facilities, food parks, packaging centres, value-added centres, irradiation facilities and modernised abattoir.
India has a strong agricultural production base with diverse agro-climatic conditions and arable land of 184 million hectares. It is one of the major food producers in the world and has abundant availability of wide variety of crops, fruits, vegetables, flowers, livestock and seafood. India produces annually 90 million tonnes of milk (highest in the world); 150 million tonnes of fruits and vegetables (second largest); 485 million livestock (largest); 204 million tonnes of food grains (third largest); 6.3 million tonnes of fish (third largest); 489 million poultry and 45,200 million eggs. As a result, Indian food processing industry has become an attractive destination for investors the world over. The size of the semi-processed and ready to eat packaged food industry is over Rs 4,000 crore (US$1 billion) and is growing at over 20%.
Indian frozen foods
India is a large producer of food and is offering different opportunities and business propositions in food and food processing technologies, skills and equipment. The food-based industries encompass canning, dairy and food processing, speciality processing, packaging, frozen food / refrigeration and thermo-processing.
Products which come under the frozen food industry are fruits, vegetables, fisheries, milk products, meat, poultry and other packaged and convenience foods. Although it is a huge producer of food products, India still has immense untapped potential in the frozen food export industry. The demand for Indian recipes from the Indian diaspora settled across the globe has served as an impetus to development of the frozen food industry in recent years. Vegetables like drumsticks and okra and prepared food like chapattis and parathas are nowadays available in frozen form in neat packets all over the world. The Indian frozen food market generated total revenues of $325.9 million in 2010, representing a compound annual growth rate (CAGR) of 16.6% for the period spanning 2006-2010.
Frozen meat products' sales proved the most lucrative for the Indian frozen food market in 2010, generating total revenues of $124.2 million, equivalent to 38.1% of the market's overall value. The performance of the market is forecast to decelerate, with an anticipated CAGR of 13.6% for the five-year period 2010-2015, which is expected to lead the market to a value of $617.5 million by the end of 2015.
India has following advantages in the processed food sector
■ India is one of the largest food producers in the world
■ India has diverse agro-climatic conditions and has a large and diverse raw material base suitable for food processing companies
■ India has huge scientific and research talent pool
■ A largely untapped domestic market of 1,000 million consumers
■ 300 million upper- and middle-class consume processed food
■ 200 million more consumers expected to shift to processed food by 2010
■ Well developed infrastructure and distribution network
■ Rapid urbanisation, increased literacy, changing lifestyle, increased number of women in workforce, rising per capita income - leading to rapid growth and new opportunities in food and beverages sector
■ Strategic geographic location (proximity of India to markets in Europe and the Far East, South East and West Asia)
Following are major challenges faced by industry
■ Consumer education that processed foods can be more nutritious
■ Low price-elasticity for processed food products
■ Need for distribution network and cold chain
■ Backward-forward integration from farm to consumers
■ Development of marketing channels
■ Development of linkages between industry, government and institutions
■ Taxation in line with other nations
■ Streamlining of food laws
The Indian food processing industry is primarily export-oriented. India's geographical situation gives it the unique advantage of connectivity to Europe, the Middle-East, Japan, Singapore, Thailand, Malaysia and Korea. One such example indicating India's location advantage is the value of trade in agriculture and processed food between India and the Gulf region. Products that have growing demand in the export market are pickles, chutneys, fruit pulp, canned fruits and vegetables, concentrated pulps and juices, dehydrated vegetables and frozen fruits and vegetables along with processed animal-based products. India's exports of agricultural and processed food products in 2009-10, has grown by almost 40%, which is over US$8 billion, against 2008-09 figure of nearly US$6.5 billion.
Regulatory Regime / Food Related Laws
Ministry of Food Processing Industries: This is the main central agency responsible for promoting and regulating the food processing sector. The ministry covers the products of fruits and vegetables, dairy, meat, poultry, fishery, consumer food, grains, non-molasses-based alcoholic drinks, aerated water and softdrink. It acts as a catalyst for bringing in greater investments into this sector. The ministry has accorded high priority to this sector with a number of policy measures, incentives and schemes announced from time to time. The National Food Processing Policy is one such initiative, which aims to create an appropriate climate for investment in the industry.
The following are the food laws applicable to food and related products in India and the food processing industry has to comply with their legal requirements
Food Safety and Standards Act, 2006 (Integrated Food Law): This aims to achieve a high degree of consumer confidence in the quality and safety of produced, processed, sold or exported food and has been enacted to:
■ Consolidate the laws relating to food
■ Establish the Food Safety and Standards Authority o