Introduction

India’s food processing industry, contributing ~8% to GDP and 13% to manufacturing (MoFPI, 2024), reflects both its growing significance and untapped potential. Its scope extends from reducing post-harvest losses and enhancing farmer incomes to boosting exports and creating large-scale employment.

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Scope of India’s Food Processing Industry

• Abundant raw materials: India is the second-largest producer of fruits and vegetables, the third-largest in milk, and a leading producer of cereals, pulses, and spices.
  • Eg: India produces over 300 million tonnes of fruits and vegetables annually.
• Large domestic market: Growing population and rising disposable incomes drive demand for processed foods.
  • Eg: Packaged food market is projected to reach over 3 billion US dollars by 2027.
• Export potential: India exports processed foods to over 150 countries, including ready-to-eat foods, beverages, and frozen foods.
  • Eg: Processed food’s share in India’s agri-food exports increased from ~14% (2014–15) to 23.4% (2023–24).
• Employment generation: FPIs create jobs across processing, packaging, storage, logistics, and retail.
• Technological adoption: Opportunities exist for modern processing, cold storage, and preservation technologies.
• Government support and incentives: Schemes like PMKSY and PLI promote investment and growth in the food processing industry.
  • Eg: 42 Mega Food Parks set up under PMKSY since 2012.

While the sector’s scope is vast and promising, its full potential is constrained by persistent structural and operational challenges.

Challenges of Food Processing Industry in India.

• Inadequate Storage and Logistics: An estimated 25–30% of fruits and vegetables are lost annually due to gaps in cold logistics and infrastructure.
• Low Processing Levels: Despite its agricultural output, a small quantity of products are processed in India, limiting value addition and market reach
• Infrastructure Gaps: Although nearly 90% of required cold storage capacity exists, only 15% of refrigerated transport is available, creating bottlenecks in distribution.
• Shortage of Skilled Workforce: Lack of adequate skilled manpower, creating roadblocks to automation and quality assurance.

Measures for Generating Employment Opportunities

• PM Kisan SAMPADA Yojana: Under PM Kisan SAMPADA Yojana, 1,608 projects have been sanctioned, creating modern infrastructure and generating significant rural employment through the establishment of food processing units. 
  • Eg: Development of 41 Mega Food Parks, 394 cold chain projects, and 75 agro-processing clusters.
• Production-Linked Incentive (PLI) for Food Processing: The PLI Scheme for Food Processing Industries (PLISFPI) has approved 171 companies, with incentives of ₹1,155 crore disbursed.
  • Eg: It has created over 2.89 lakh jobs, boosting large-scale employment opportunities (Source: PIB October 2024).
• Formalisation of Micro-enterprises via PMFME: The PM Formalisation of Micro Food Processing Enterprises (PMFME) scheme targets 2 lakh micro-units, providing credit-linked subsidies to formalise and scale rural enterprises, especially benefiting women and SHGs.
• One District One Product (ODOP) Initiative: The government has identified unique products across 713 districts under ODOP. This promotes local food products, boosts branding and marketing, and creates district-level employment opportunities.

Conclusion

As India moves forward under the Make in India vision, the food processing industry will continue to be a key driver of economic growth. To ensure its full potential, focus on innovation, sustainability, and strong implementation of schemes is essential for employment generation and global competitiveness.

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