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India’s food processing sector – improved stds, better supply chain
Saturday, 02 March, 2024, 08 : 00 AM [IST]
Nandita Vijayasimha, Bengaluru
India’s food processing is eyeing to further bolster its growth prospects. This has come in with the industry showing significant potential for expansion in recent years. With a growing population, changing consumer preferences, and increasing urbanisation, there's a rising demand for processed and packaged foods in India.

Experts note that expansion in this sector can lead to various benefits including increased employment opportunities, improved food safety standards, better supply chain management, and enhanced value addition to agricultural produce. Additionally, it can contribute to the overall growth of the economy by attracting investments, promoting exports, and reducing post-harvest losses.

To facilitate this expansion, the  government has provided supportive policies, infrastructure development, access to finance, and technological advancements. Collaboration between industry players, research institutions, and government bodies can also play a crucial role in driving innovation and sustainability within the sector.

According to Dr D B Anantha Narayana, CSO, Ayurvidye Trust, Bengaluru, and Chairman of Expert Committee Nutra - FSSAI, the  Indian food processing sector needs to tap into innovation opportunities for traditional foods and Ayurveda Aahara. This is an untapped sector and would give companies a first-mover advantage.

“Overall, the expansion of the Indian food processing industry presents exciting opportunities for both businesses and consumers, and it can play a significant role in India's economic development and food security goals,” said Chetan Hanchate, head, Centre for Processed Foods, and food consultant.

Major sectors constituting the food processing industry in India are processed fruits and vegetables, RTE (ready to eat) and RTC (ready to cook), mozzarella cheese, processed marine products, edible oils, beverages and dairy products.

Under  the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) launched in  2015-16 to enhance physical access of water on farm and expand cultivable area under assured irrigation, improve on-farm water use efficiency, introduce sustainable water conservation practices,  the projects sanctioned under various schemes as on September 30, 2023,  include, 41 Mega Food Parks, 371 cold chain projects, 68 agro-processing clusters, 474 proposals under Creation/Expansion of Food Processing & Preservation Capacities (CEFPPC), 61 Creation of Backward and Forward Linkages Projects, 46 Operation Greens projects and 186 Food Testing Laboratories.

A key factor driving the growth of this sector is the Production Linked Incentive Scheme for Food Processing Industry (PLISFPI). This is supporting creation of global food manufacturing champions commensurate with India’s natural resource endowment and support Indian brands of food products in the international markets with an outlay of Rs 10,900 crore.

The food processing sector in India has a cornucopia of manufacturing enterprises across micro to large industries. The country has a  competitive advantage in resource like fruits, vegetables, milk and poultry apart from marine and meat, which provides scope for promoting value-added products.

However, achieving full potential of this sector would require Indian companies to improve their competitive strength in terms of scale of output, productivity, value addition and their linkages with the global value chain.

Now the Production Linked Incentive Scheme for Food Processing Industries was formulated based on the Production Linked Incentive Scheme of NITI Aayog under “AatmaNirbhar Bharat Abhiyaan for Enhancing India's Manufacturing Capabilities and Enhancing Exports.”

Indian companies see that implementation of the PLI scheme would facilitate expansion of processing capacity to generate processed food output and create employment for nearly 2.5 lakh persons by the year 2026-27.

Another area of interest in India is millets. To this end, Karnataka government has called on to nourish the future with millets & organics. The state is now encouraging the cultivation of millets among farmers, food processors, marketers and consumers. Under the Raithasiri scheme, which was  introduced in 2029-2020, has benefitted 100,604 farmers with the financial expenditure of Rs 81.54 crore since inspection, it is working to expand cultivated areas to accelerate exports.

Since processing of millets is still a challenge and its processed products have poor shelf life hence encouragement is given at the farm gate level.  
In the area of dairy, India is the highest milk producer and ranks first position in the world contributing 24.64% of global milk production. The milk production of India has registered 58% increase to 230.58 million tonne in 2022-23.

“There is a huge opportunity for the development of traditional food for infants which can be formulated using rice, rice flour, wheat flour,  semolina, pulses and other cereals, spices, dry fruits and vegetables, milk, ghee and eggs. These can be developed in a ready-to-use or reconstituted with milk, water, curd or any other medium appropriate for infant. The food processor should provide clear instructions to prepare the food.  Such products can succeed in the market going by the appropriate technologies and packaging formats to retain nutritional physical and sensorial. However, it is mandatory to ensure that these are prominently labelled as ‘Traditional Food for Infants’”, said Dr Narayana.

“There is a visible interest  in India as Walmart sourced goods worth over US$30 billion from India in last two decades. The global retail major has sourced goods worth over US$30 billion from the Indian market in the last two decades for its global operations. It aims to  triple its sourcing of goods from India up to worth US$10 billion per year by 2027,” said Andrea Albright, executive vice president, Sourcing, Walmart Inc.
“To this end, we are encouraging MSMEs (Micro, Small and Medium Enterprises) and entrepreneurs with proper training. We believe that there is a tremendous opportunity to continue to contribute to India's growing economy, she said adding that because India has unique products that are in demand with our customers around the world. Some of the products I use every day are made in India by suppliers that we have long relationships with," she said.

“The company has been doing business in India for the last 25 years. It is building an ecosystem and taking a people-led approach to connect its work across the country. Investing in high growth markets like India helps us strengthen our relationships with established suppliers, but also developing relationships with new ones to build long-term surety and diversity and global supply,” Albright said.

“Under the Walmart Vriddhi initiative, which is designed to support MSMEs in modernising, expanding, and reaching their domestic ambitions, the company has trained 50,000 people so far. Our focus is to recruit and train new suppliers to fulfil our purchase orders around the world. These orders often lead to the creation of new jobs. It also allows our suppliers to invest back in their local communities,” Albright added.

With regards to technology, Tata Consumer Products  has taken a pioneering leap in food processing by commercialising Microwave Assisted Thermal Processing (MATS) technology in India. It is the first company to commercialise and introduce MATS technology in India under its subsidiary Tata Smart Foodz  to set a  new standard for the Ready-To-Eat (RTE) category. MATS technology, was initially created by Prof. Juming Tang at Washington State University, USA, and is a patented and FDA-approved technology.

MATS is a new age and novel food processing technology that offers high quality ambient shelf- stable food products in comparison to other conventional thermal processing technologies. Currently, the Retort technology is widely implemented in the food industry. However, it addresses the limitations of Retort to deliver a far superior product experience on key parameters such as colour, texture and taste of the food. MATS technology, being very effective on sterilisation technology can help formulators develop formulations with lower salt content than conventional processed foods. Conventional thermal processing through Retort technology often results in significant quality loss due to prolonged exposure to high temperatures. On the contrary, MATS minimises exposure time to high heat temperatures, according to Vikas Gupta, global head, R&D at Tata Consumer Products.

The food processing sector is India ‘s fifth large industry. The Union government sees that by increasing the processing opportunity helps in reduction of wastage, better price realisation for farmers and employment generation.
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