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Access to tech & modern equipment - Key challenges
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Friday, 09 January, 2026, 14 : 00 PM [IST]
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Ashwani Maindola, New Delhi
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As the Union Government aims at a ‘Viksit Bharat’ (developed India) by 2047, one of the sunrise sectors identified as a propellant for the same is food processing. And, therefore, food and agro-based processing units and cold chain infrastructure have been classified under agriculture activities for Priority Sector Lending (PSL) as per the revised RBI Guidelines issued on April 23, 2015. All activities under agro and food processing are eligible for PSL coverage. And, over the last decade, it has shown promising growth, as per MoFPI.
The food processing industry in India has grown at an Average Annual Growth Rate (AAGR) of 6.55%, which is higher than the overall manufacturing sector’s growth rate. The Gross Value Added (GVA) by the sector has increased from ?1.30 lakh crore in 2013-14 to ?2.24 lakh crore in 2023-24, now constituting nearly 8% of the manufacturing sector’s GVA. This sustained growth underscores the sector’s importance as a bridge between agriculture and industry.
With regard to the projections for the sector’s growth over the next five to 10 years, the MoFPI, in a written reply to the Parliamentary Standing Committee for Agriculture and Food Processing has submitted, “Over the past nine years, the food processing industries have demonstrated robust growth, recording an average annual growth rate of 6.55%, which is higher than the overall manufacturing sector’s growth rate. The highest growth rate was observed during 2018-19 (22.28%). The FPI sector is expected to grow at an average growth rate of around 6.5% during next five to six years and achieve a GVA of around 3.3 lakh crores in 2030.”
Growth drivers and opportunities -
As India grows into a large consumption economy, the rising incomes and living standards drive demand for convenient and safe processed foods. Increasing demand for processed foods, changing lifestyles and food habits are driving demand and creating employment opportunities.
Secondly, the availability of the large raw material base that includes milk, spices, pulses, fruits, vegetables and rice can help in product development and innovation.
Further, as per Government, the industry aims at reducing the wastage and increasing the utilisation of by-products and waste generated during the processing, as India’s post-harvest losses are substantial, with an estimated ?1.53 trillion (US$18.5 billion) worth of food lost annually.
To mitigate this, the government has initiated various measures, which include improving/expanding the storage infrastructure, supply chain efficiency, transportation and training farmers and other stakeholders in the supply chain.
Exports -
India’s processed food exports have grown from 13% to 23% of total agri- food exports between 2014–15 and 2023–24, however, the country still lags behind global leaders like USA and China in processing capacity.
The gap is more evident in technology adoption, where USA and China are leading with innovations like high-pressure processing and digital agriculture. In terms of value chain integration, India is supported by schemes like PMKSY, yet its integration is less developed compared to USA’s corporatised model, China’s state-led modernisation, and Brazil’s export-oriented focus.
Thus, India needs to strengthen infrastructure, technology, and integration to compete globally.
As per MoFPI, the share of processed food exports in agri-food exports has increased from 14.9% in 2017-18 to 20.4% in 2024-25, with the total value of agri-food exports reaching US$49.43 billion in 2024-25, accounting for over 11% of India’s total exports.
The Government’s focus on infrastructure development, ease of doing business, and 100% FDI under the automatic route has attracted significant investment, further strengthening the sector’s capacity and competitiveness.
Year Total exports of processed food from India (Value) in US$ Million
2020-21 8,565.60
2021-22 10,412.82
2022-23 13,078.36
2023-24 10,881.81
2024-25 10,097.97
Also, to match with global standards of food, the ministry has undertaken steps that include food safety & quality assurance infrastructure under PMKSY and compliance with the FSSAI standards.
Comparative status
On Technology Adoption, MoFPI’s study says that the US and China are at the forefront of technology adoption in food processing, utilising advanced technologies such as high-pressure processing (HPP) and precision agriculture. The USA has high adoption rates of digital agronomy and automation, while China is rapidly growing its food processing capabilities. In comparison, India is making progress but has huge potential for growth.
On Value Chain Integration
India’s value chain integration is driven by Government initiatives like the Pradhan Mantri Kisan Sampada Yojana (PMKSY), which supports cold chains and agro-processing clusters. The USA features a highly integrated agri-food value chain dominated by large agribusinesses, while China employs a state- led modernisation strategy to enhance integration, though regional disparities remain. Brazil excels in export-oriented sectors but faces challenges in domestic integration due to complex regulations. Overall, while India is making strides in value chain integration, it still trails behind the more established systems in USA, China, and Brazil.
Make in India -
As per MoFPI, the food processing sector is a strategic sector under the ‘Make in India’ programme because it is a key driver of inclusive economic growth, supports small-scale and rural enterprises, enhances value addition, boosts exports, and aligns with the national vision of doubling farmer incomes and positioning India as a global food processing hub and thus the Ministry of Food Processing Industries (MoFPI) has implemented strategic interventions to attract investments, strengthen infrastructure, and promote domestic manufacturing across the value chain.
However, the ministry has identified a few challenges for the sector. The first challenge is the presence of informal units in FPI in the country. Most of the units involved in FPI are from the informal sector and this leads to issues like unavailability of credit and so on. Further, there is a major issue of lack of adequate infrastructure in the form of cold chain and storage facilities and lastly, small- and medium-sized enterprises (SMEs) also often lack access to the newest technology and modern processing equipment, which negatively impacts their ability to effectively compete with larger firms.
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