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India's Food Ecosystem

India's food ecosystem offers enormous investment opportunities with stimulating growth in the food retail sector encouraging economic policies, and attractive fiscal incentives. Through the Ministry of Food Processing Industries (MoFPI), Government of India is taking all necessary measures to boost investments in the food processing industry in India. Some of the initiatives include:

Pradhan Mantri Kisan Sampada Yojana (PMKSY) aims at developing modern food processing infrastructure. PMKSY has been envisaged as a comprehensive package which will result in creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet.

Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PMFME) aims to enhance existing individual micro-enterprises in the unorganized segment of the food processing industry.

Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) aims to boost domestic manufacturing, increase exports, while supporting food manufacturing entities with stipulated Sales and willing to make investment for expansion of processing capacity and branding abroad to incentivize emergence of strong Indian brands. The scheme is EoI bases.

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India’s agricultural and processed food products exports were up by 13% to $19.69 Bn in nine months of the current fiscal (2022-23) compared to the same period last year.

  • The share of processed food exports in agri-exports has increased substantially from 13.7% in 2014-15 to 25.6% in 2022-23.
  • The total FDI received in the food processing sector from Apr 2000 till Mar 2024 was $12.58 Bn which is 1.85% of the total FDI Equity inflow.
  • By 2025 the Indian Food Processing market is estimated to reach $535 Bn and growing at a compound annual growth rate of 15.2%. Tier-II and Tier-III cities could mirror the trend visible in metropolitan areas, by consuming more processed food in the coming years.
  • India has emerged as world leader in the production of a variety of fruits like mango, banana, guava, papaya, sapota, pomegranate, Lime & aonla and is the second largest producer of fruits and vegetables.
  • India's export of agricultural and processed food products rose close to $51 Bn in 2022-23. Major exporting countries include USA, Bangladesh, UAE, Vietnam, among others.
  • India’s consumer spending to grow to $6 Tn by 2030.
  • In FY 2023-24, India exported 11.1 Mn Tonnes of non-basmati rice and 5.2 Mn Tonnes of basmati rice.
  • Government aims to make India the Global Hub for 'Shree Anna' (Millets) 100% FDI is permitted under the automatic route in food processing industries in India. 100% FDI is allowed through the government approval route for trading, including through e-commerce in respect of food products manufactured or produced in India. Sources: FDI Policy

  • Share of GVA of Agriculture & Allied Sector in Total Economy (at current prices) (2022-23)

    18.3%

  • Share in total employment

    12.22%

  • Worth of agricultural and processed food products exported in 2022-23

    $51 Bn

  • Cropping intensity

    141.6%

Factors Fueling Growth

Leading producer of various agricultural commodities

1.3 billion consumers with rising demand for branded food products

India boasts the world's fastest-growing economy

Government initiatives offer attractive fiscal incentives

Identifies 713 districts nationwide under the ODOP scheme

Industry Outlook

India’s food processing sector is among the largest globally, with its output projected to reach $535 billion by 2025-26

In India, the Food Processing sector essentially plays a vital role in connecting Indian farmers to consumers both home and abroad. The Ministry of Food Processing Industries (MoFPI) is leaving no stone unturned to attract investments across the value chain. Employment-wise, food processing industry accounts for 12.22% (at 3-digit of NIC classification) of all Registered Factory sector employment with about 2.03 Mn persons engaged as workers therein. Unregistered food processing sector provides jobs to 5.1 Mn workers according to NSSO 73rd Round report 2015-16 and constituted 14.18% of employment in the unregistered manufacturing sector. Processed fruits and vegetables, RTE/RTC, mozzarella cheese, processed marine products, edible oils, beverages and dairy products are some major areas constituting the food processing industry in India.

Under PMKSY the projects sanctioned under various schemes as on date (30.09.2023) 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 Green projects, 186 Food Testing Laboratories projects have been approved across the country. The key sub-segments of the Food Processing industry in India are Fruits & Vegetables, Poultry & Meat processing, Fisheries, Food retail, dairy industry, etc

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Production Linked Incentive (PLI) Scheme

The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved the introduction of the Production-Linked Incentive (PLI) Scheme in Food Products to bolster India’s manufacturing capabilities and boost exports under the Atmanirbhar Bharat initiative. The PLI Scheme for the Food Processing Industry has received 158 applications across various categories, including 22 MSMEs selected to participate in the Millet-based products category out of 30 applicants. Implementation of the PLI scheme is expected to facilitate an expansion of food processing capacity by approximately INR 30,000 crore and create additional direct and indirect employment opportunities for about 250,000 individuals by 2026-27. Beneficiaries of the PLI Scheme have reported investments totaling around INR 7,099 crore.