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Establishing India as a global food powerhouse
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Saturday, 01 March, 2025, 14 : 00 PM [IST]
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Dr Prabodh Halde
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Food processing is one of the most promising industries in India, contributing significantly to economic growth, employment generation, and value addition to agricultural produce. With a growing population, rapid urbanisation, and changing consumption patterns, food processing has emerged as a crucial sector that bridges the gap between agricultural production and consumer demand. Recognised as a ‘sunrise sector,’ food processing holds immense potential for improving farmers' income, reducing post-harvest losses, and enhancing food security.
The Indian food processing industry has witnessed substantial growth, averaging an annual growth rate of around 8.3% from 2015-2023. It contributes over 11.2% to the Gross Value Added (GVA) in manufacturing and over 12.5% to the GVA in the agriculture sector (2022-23). Despite its progress, India lags behind several developed nations in food processing, highlighting the need for further investment and policy intervention.
1. India’s Agricultural Landscape
India is one of the world's largest agricultural producers, with a vast diversity of crops due to its varied agro-climatic conditions. The country ranks first in milk production, second in fruits and vegetables, and third in fish and egg production. Despite this, a significant portion of the produce is wasted due to a lack of infrastructure and processing capabilities.
The potential for food processing in India is immense, as it can convert 40% of perishable agricultural produce into higher-value products, ensuring better returns for farmers while providing safe and nutritious food to consumers.
2. Food Processing: The Engine of Agricultural Growth
Food processing plays a pivotal role in fueling agricultural growth through value addition. By transforming perishable raw materials into processed food products with longer shelf life, the industry reduces wastage and ensures a steady market for farmers. It also creates 12 million rural employment opportunities and enhances export potential.
The sector enhances agricultural profitability by offering 50%-200% better pricing for processed goods compared to raw produce. Additionally, food processing supports allied industries such as logistics, packaging, and retail, contributing to overall economic growth.
3. India vs. Global Food Processing Standards
Compared to developed nations, India has a relatively low level of food processing. While the U.S. processes 70% of its food, China processes 25%, and the Philippines processes 80%, India processes only about 11% of its total produce.
A significant challenge is post-harvest wastage, with India losing approximately ?92,000 crore annually due to inadequate cold storage and transportation facilities. Increasing the food processing percentage can help mitigate these losses and boost farmer incomes.
4. Primary Function: Ensuring Hygiene, Safety, and Edibility
One of the primary goals of food processing is to make food safe, edible, and hygienic. The industry employs various techniques such as pasteurisation, freezing, dehydration, and sterilisation to eliminate pathogens and extend shelf life.
Food processing also plays a vital role in fortifying foods, improving nutritional value by adding essential vitamins and minerals. Fortified rice, iron-enriched wheat flour, and probiotic dairy products are examples of how food processing contributes to public health.
5. Recent Advancements in Food Processing
The food processing industry has seen significant technological advancements, including:
• High-Pressure Processing (HPP): Enhances food safety without compromising nutrition.
• Pulsed Electric Fields (PEF): Improves food shelf life and extraction of bioactive compounds.
• Ohmic Heating: Accelerates food sterilisation while retaining nutrients.
• Cold Plasma Technology: Provides non-thermal sterilisation for fresh produce.
• Smart Packaging: Extends shelf life and ensures food quality.
These innovations enhance food safety, reduce wastage, and improve processing efficiency, making Indian food products more competitive in global markets.
6. Myths about Food Processing
Despite its benefits, food processing faces several misconceptions:
• Processed food is unhealthy: Many processed foods retain nutritional value, while fortification enhances public health.
• Food preservatives are harmful: Many natural preservatives, such as salt, vinegar, and ascorbic acid, are safe and used for centuries.
• Food processing removes nutrients: Advanced technologies ensure minimal nutrient loss, with some processes enhancing bioavailability.
• Packaged foods are always artificial: Many packaged foods use natural ingredients with safe preservation techniques.
7. Government Initiatives for Food Processing Growth
The Ministry of Food Processing Industries (MoFPI) has implemented several initiatives to promote the sector:
• World Food India: A global platform showcasing India's food industry to attract investment and foster international collaboration.
• Production Linked Incentive (PLI) Scheme: Offers ?10,900 crore in incentives to food processing companies for scaling up operations and exports.
• Mega Food Parks Scheme: Establishes modern infrastructure with 42 operational parks to support food processing clusters.
• Operation Greens: Stabilises supply chains for perishable fruits and vegetables.
• Pradhan Mantri Kisan Sampada Yojana (PMKSY): Supports food processing projects, cold chain infrastructure, and value addition.
• Startup India Initiatives: Encourages food tech startups, providing funding and mentorship.
• 100% FDI in food processing sector
• NIFTEM initiatives
8. Suggestions for Strengthening the Sector
To unlock the full potential of food processing, India should focus on:
• Harmonising Central and State Policies: Coordinating policies across different levels of government for seamless implementation.
• Strengthening Nodal Agencies: Establishing a single-window clearance system for approvals and funding.
• Digital Mapping of Agro Clusters: Identifying processing zones to streamline logistics and reduce transportation costs.
• Market Research and Export Guidance: Assisting entrepreneurs in identifying global trends and expanding overseas.
• Encouraging Public-Private Partnerships: Leveraging private sector expertise to boost food processing infrastructure.
Conclusion
Food processing is undeniably a sunrise sector in India, poised to drive economic transformation, rural empowerment, and agricultural modernisation. With its vast potential for value addition, job creation, and export growth, food processing is emerging as a key pillar of India’s economic strategy. The sector bridges the gap between farm and fork, ensuring better incomes for farmers while providing consumers with safe, nutritious, and diverse food options.
By investing in modern infrastructure, adopting cutting-edge technology, and strengthening policy frameworks, India can harness the full potential of food processing. Strategic government support, coupled with private sector participation, can unlock unprecedented opportunities, making India a global hub for processed food exports.
As India moves towards self-reliance with 'Make in India' and 'Atmanirbhar Bharat,' food processing will play a crucial role in reducing post-harvest losses, enhancing food security, and boosting the economy. This sunrise sector is not just about economic gains—it is about ensuring sustainability, nutrition, and a brighter future for India’s agricultural and industrial landscape. With the right focus and initiatives, food processing is set to revolutionise the Indian economy and establish the country as a global food powerhouse. With the right policy support, investment, and infrastructure, India can position itself as a global leader in food processing.
By reducing food wastage, ensuring consumer safety, and empowering farmers, food processing holds the key to a ?1000,000 crore industry in the coming years. Recognising its importance, the government must prioritise this sector as a growth engine for the economy, creating a robust ecosystem that benefits all stakeholders.
With focused interventions and technological advancements, India can achieve its vision of becoming a global food hub, fulfilling the goals of 'Make in India' and 'Atmanirbhar Bharat' in the food processing sector.
(The author is chairman, AIFPA Western Region)
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