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Indian Food Processing Market to Reach INR 50,571 Billion by 2024, Reforms and Schemes Augmenting Growth

Published on May 10, 2019

According to the latest report by IMARC Group, titled “Indian Food Processing Market: Industry Trends, Share, Size, Growth, Opportunity and Forecast 2019-2024”, the Indian food processing market size reached INR 24,665 Billion in 2018. With a geographical advantage, India is currently one of the largest producers and processors of milk, wheat, rice, sugarcane, tea, and various fruits and vegetables. The growth in the food processing sector and the simultaneous development of the value chain have become significant contributors in meeting the favorable terms of agricultural trade in both the international and domestic markets. In order to promote the food processing sector, the Government of India has recently launched an investor-friendly portal, called Nivesh Bandhu. It integrates Central and State Government incentives and policies for all stakeholders operating in the food processing sector including processors, logistics operators, farmers and traders. It also includes a “Food Map” which helps investors in making decisions based on the project location. These initiatives along with the consistently growing population and rapid urbanization are driving the demand for value-added products in the country.

Indian Food Processing Market Trends:

In the past few years, the Government of India has identified food processing as a priority sector owing to which it has introduced several initiatives and reforms, such as 100% foreign direct investment (FDI) with automatic approvals and the Mega Food Park Scheme. The automatic approvals for foreign investments and technology transfer are being offered for milk and milk products, marine and meat products, and agricultural products. Under this reform, raw materials and capital goods for absolute export-oriented units have also been exempted from import duty. In addition, the industry has been facilitated with other tax exemptions such as nil excise duty on milk and milk products.

Apart from this, the Mega Food Park Scheme includes the construction of state-of-the-art support infrastructure in an agricultural or horticultural zone to establish modern food processing units with a well-established supply chain. The support infrastructure consists of primary processing centers, cold chain units, collection centers, central processing centers and various fully developed plots for entrepreneurs for setting up food processing units. At present, the Government has funded the construction of 42 Mega Food Parks amongst which 17 parks have become operational across the country. On account of these factors, the market is anticipated to grow at a CAGR of 12.4% during 2019-2024, reaching a value of INR 50,571 Billion by 2024.

Market Summary:

  • The food processing industry in India has been segmented on the basis of the sector which mainly includes dairy, fruits and vegetables, meat and poultry processing, fisheries, packaged foods, and beverages. Amongst these, dairy represents the largest sector, exhibiting a clear dominance in the market.
  • The report has analyzed the market on the regional basis into North India, South India, East India and West India. Currently, West India is the biggest food processing market in India, holding the majority of the market share.

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