India’s food ecosystem offers huge opportunities for investments with stimulating growth in the food retail sector, favourable economic policies & attractive fiscal incentives. The Food & Grocery market in India is the 6th largest globally. Food & Grocery retail market in India constitutes 65% of the total retail market in India. The sector contributes to 11.6% of the national employment & 10.4% share in India’s exports. The major industries constituting the food processing industry are grains, sugar, edible oils, beverages & dairy products. The key sub-segments include dairy, fruits & vegetables, poultry, meat processing, fisheries, food retail, etc. The Ministry of Food Processing Industries (MoFPI) is making efforts to encourage investments across the value chain.
100% FDI is permitted under automatic route in food processing industries
100% FDI is allowed through approval route for trading, including through e-commerce in respect of food products manufactured / produced in India
Current Scenario
- Food processing sector in India has received FDI of $ 10.94 billion during April 2000-December 2021, contributing 1.91% of total FDI inflow during the said period
- Government of India has approved 41 Mega Food Parks, 353 Cold Chain projects, 63 Agro-Processing Clusters, 292 Food Processing Units, 63 Creation of Backward & Forward Linkages Projects & 6 Operation Green projects
Investment Opportunities
- Food preservation by fermentation: wine, beer, vinegar, yeast preparation, alcoholic beverages
- Beverages: fruit-based, cereal-based, seafood, fish processing
- Food preservation & packaging: metal cans aseptic packs, freezing units
- Consumer food: Frozen, processed, packaged food, aerated soft drinks & packaged drinking water
- Food supply chain infrastructure such as cold storage, abattoirs, food parks, etc.
Why Invest?
- India is world’s:
o Largest producer, consumer & exporter of spices
o Largest processor, producer & consumer of cashew nuts
o 2nd largest producer of food grains, fruits & vegetables - Strategic geographic location & proximity to food-importing nations makes India favorable for the export of processed foods
- PLI scheme worth INR 10.9 billion for enhancing India’s manufacturing capability & exports
Read Ahead
- India’s food processing sector is expected to reach $535 billion by 2025-26. By 2024, the Food Processing Industry is expected to attract $33 billion investment & generate employment for 9 million people. By 2025, the sector is expected to be worth over half a trillion dollars
- India’s consumer spending to grow to $6 trillion by 2030, making India 5th largest consumer globally. Rising youth population, increased desire for branded frozen & processed food is likely to increase India’s overall food consumption
