The food processing industry is the sunshine industry in India. This sector is growing at a fast pace at 8.4%, which is one of the fastest growing sectors in the Indian economy. India has the potential of becoming a world leader in the food processing sector in the near future. This sector could also close the divide between the farmers and the consumers. Huge potential for employment generation is another attractive plus point for the sector. For example, in 2012-13, it constituted ~13% of employment generated in all registered manufacturing sectors in India.
The sector’s performance over the past year has been exceptional. Industry indicators like Index of Industrial Production (IIP) for factory output was ~6% (April-February) in 2014-15, compared to ~2% over the same period in 2013-14. This increase has been largely due to growth in the rice (~12%), edible hydrogenated oil (~6%) and milk (~1.5%) processing sectors. The food processing sector, a major sector under the Prime Minister’s “Make in India” campaign has attracted over USD 420 million foreign direct investment (FDI) over the 2014-2015 financial year period. Therefore, setting up food processing units seem to be an attractive proposition and the time seems to be opportune.
The government is also trying to attract talent and investment in the sector. For example, the Food Processing Minister, Harsimrat Kaur Badal recently had some good news for young entrepreneurs. She informed that the government was trying to make available affordable credit to new entrepreneurs who are setting up food processing units pan India. A cold-chain grid was being planned that would link farmers across the country with consumers. The sanction of 30 cold-chain projects and 17 mega food parks was likely to attract a total investment to the tune of just over Rs. 3,000 crore, which will be a great boon for the food processing industry. The 30 new cold-chain projects will require an investment of approximately Rs. 725 crore, of which about Rs. 275 crore will be borne by the ministry.
The cumulative storage space for all these cold-chains will be over 1 lakh tons, and daily milk processing capacity will be over 11 lakh liters. Entrepreneurs will get a financial assistance of Rs. 10 crore under the cold-chain scheme. 108 integrated cold-chain projects are being implemented of a total number of 138 approved by the government. Once all the 108 cold-chains start operations, this will create over 3.5 lakh tons of cold storage capacity, 90 tons of individual quick freezing capacity per hour, ~107 lakh liters per day of milk processing capacity and over 600 reefer carriers. With a total requirement of 61 million tons of cold storage space in India, there is still a deficit of 29 million tons of cold storage space. The food processing ministry is optimistic that this deficit can be made up in the near future so that the food processing sector can contribute positively and make a real difference to Prime Minister Modi’s “Make in India” campaign.