India aims to be world's food factory
04 November 2009
The government aims to triple the growth of food processing industry, increase the level of processing from 6 per cent to 20 per cent, increase value addition from 20 per cent to 35 per cent and double the country's contribution to the world agric-produce business from 1.5 per cent to 3.0 per cent by the year 2015, thereby making India the food factory of the world.
The government has identified food processing industries such as meat, fish and poultry processing, fruit and vegetable processing, packaged, convenience food and drinks, milk products, fortified foods, nutraceuticals, food processing machines, technologies etc as potential investment areas, an official release said.
Investment in India can be attractive as India is the seventh largest country, with extensive administrative structure and independent judiciary, a sound financial and infrastructural network and above all a stable and vibrant democracy, the release noted.
Since only a very small percentage of the produce is processed into value added products at present, the scope, potential and opportunities here are huge. India is one of the biggest emerging markets, with over 1.2 billion population and a 250 million strong middle class. Rapid urbanisation, increased literacy, increased participation of women in workforce and rising per capita income, all have caused rapid growth and changes in demand patterns, leading to tremendous new opportunities for exploiting the large latent market, the release added.
Moreover an average Indian spends about 50 per cent of household expenditure on food items. Also, the demand for processed / convenience food in the country is constantly rising.
A liberalised overall policy regime, with specific incentives for high priority food processing sector, a comparatively cheaper workforce etc can be effectively utilised to set up large low-cost production bases for domestic and export markets. FDI in the sector is also under automatic route for almost all processed food items.