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Food & Agriculture Industry in India

Agriculture is the dominant sector of Indian economy, which determines the growth and sustainability. About 58% of the population still relies on agriculture for employment and livelihood. Indian agriculture however, has milestones. The green revolution transformed India form a food deficient stage to a surplus food market.

The Indian Food Industry has made significant stridesin the last three decade. It met the challanges of securing the production of basic staples like rice & wheat to feed India's growing population. However, this sector is yet to realise its full potential in terms of yield, processing & exports. Given the country's agro climatic conditions, the sector fulfills only 50-60 percent of potential yield for most crops.

The sector could not however maintain its growth momentum in the post green revolution years, the strategic growth in agriculture and the accelerated growth in industry reversed the structure of national GDP in Indian economy. Despite these major structural transformations, the agriculture sector continues to accommodate the major share of the workforce.

Indian Agriculture is witnessing a phase of diversification. Attention has been shifting to high-value crops from traditional crops. This is expected to enable a desired transition in Indian Agriculture from its stagnation to a growth path. The competitive advantages that Indian agriculture processes are (a) Favorable agro-climatic zones (b) Large irrigated lands (c) Gap between present productivity and potential productivity and (d) Availability of skilled, educated, technical and scientific manpower. To leverage the global competitive advantage, Indian agriculture needs intervention in the areas of policy, technology and market access.

emerging opportunities in Food Processing & Agriculture in India

Food Processing

Food processing industry is of enormous significance for India's development because of the vital linkages and synergies it promotes between the two pillars of our economy, industry and agriculture. Fast growth in the food processing sector and simultaneous improvement in the development of value chain are also of great importance to achieve favorable terms of trade for Indian agriculture both in the domestic and the international markets.

The sector however has to go a long way. Even important is the crucial contribution that an efficient food processing industry could make in the nation's food security for instance the post-harvest losses of selected Fruits and Vegetables are about 25% to 30% in our country. Even marginal reductions in these losses are bound to give us better returns and thereby improve the income level of the farmers. During the last one decade, India moved from a position of scarcity to surplus in Food. Given the trade in production of food commodities, the Food Processing Industry in India is on an assured track of growth and profitability. It is expected to attract phenomenal investment in capital, human, technological and financial areas.

India's Food & Agriculture Industry

Indian Agriculture is witnessing a phase of diversification. Attention has been shifting to high-value crops from traditional crops. This is expected to enable a desired transition in Indian Agriculture from its stagnation to a growth path.The competitive advantages that Indian agriculture processes are:

  • Favourable agro-climatic zones
  • Large irrigated lands
  • Gap between present productivity and potential productivity and
  • Availability of skilled, educated, technical and scientific manpower
To leverage the global competitive advantage, Indian agriculture needs intervention in the areas of policy, technology and market access.

The total food production of India is estimated to double in the next ten years. Hence there is an opportunity for large investments in food and food processing technologies, skills and equipment. The major interventions in this context are, for example, Canning, Dairy and Food Processing, Specialty Processing, Packaging, Frozen Food/Refrigeration and Thermo Processing. Fruits and Vegetables, Fisheries, Milk and Milk Products, Meat and Poultry, Packaged / Convenience Foods, Alcoholic Beverages and Soft Drinks and Grains. Health food and health food supplements are other rapidly rising segments of this industry. The Food Processing Industry sector in India has been accorded high priority by the Government of India, with a number of fiscal relief and incentives, to encourage commercialisation and value addition.

The Indian food market is estimated at over US$ 182 billion, and accounts for about two thirds of the total Indian retail market. Further, according to consultancy firm McKinsey & Co, the retail food sector in India is likely to grow from around US$ 70 billion in 2008 to US$ 150 billion by 2025, accounting for a large chunk of the world food industry, which would grow to US$ 400 billion from US$ 175 billion by 2025. In order to further grow the food processing industry, the government has formulated a Vision-2015 action plan under which specific targets have been set. This includes tripling the size of the food processing industry from around US$ 70 billion to about US$ 210 billion, raising the level of processing of perishables from 6 per cent to 20 per cent, increasing value addition from 20 per cent to 35per cent, and enhancing India’s share in global food trade from 1.5 per cent to 3 per cent. This would require an investment of US$ 20.6 billion.

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