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KPMG India calls for PPP model to spur food processing in India
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Friday, 30 April, 2021, 08 : 00 AM [IST]
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Our Bureau, Bengaluru
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KPMG India sees that Government partnership with private players through appropriate PPP models may be considered to ensure a faster scale up of quality infrastructure in the food processing sector. The pandemic has given rise to a new normal with sustainable food chains, growing preference for healthy food and localised food supply with increased trade barriers.
Hence a focussed approach with collaboration from diverse stakeholders is required for catalytic growth of the industry. An inter-ministerial committee led by MoFPI and consisting of various ministries may be constituted to bring various stakeholders together in a co-ordinated manner, noted KPMG in its report titled, ‘Indian food processing industry – growth opportunities post the Covid-19 pandemic'.
In the post Covid-19 era, there is likely to be a surge in non – tariff measures including stringent Sanitary and Phytosanitary Measures (SPSs) and Technical Barriers to Trade (TBT) by major economies to ensure food safety against transmitted chemicals and diseases.
Significant shift from non-sustainable food systems to environmentally sustainable food systems across the entire value chain for food processing will be seen.
Demand for foods perceived to be healthy such as organic food and related products is likely to increase significantly. Adoption of traceability in food products is likely to witness a steep rise. Localisation of food supply is likely to gain prominence as an emerging and increasingly credible concept.
Recognising the essence of food security and shortages, adoption of Information and Communication Technologies (ICTs) such as Artificial Intelligence (AI) and Big Data to improve on-farm handling, post-harvest, storage and transportation processes is likely to gain traction in future. Resilience needs to be strengthened from production of traditional crops to storage, transportation, processing and preparation.
Food processing industry is one of the mainstays of the global economy with a value addition of $ 1.7 trillion. The Indian processed food market is expected to grow to US$ 470 billion by 2025 from $ 263 billion last year.
The post Covid-19 world looks promising for India’s food processing industry and provides the country with an opportunity to calibrate its strategy and gears up to capture new markets.
The industry is expected to move towards an organised structure. PM FME Scheme is providing impetus to this by formalising the unorganised micro players in food processing industry.
There is significant potential for enhancing exports from India to the top 10 food importing countries of the world where India has a limited presence. Major segments of potential include fisheries, meat and marine and dairy.
Government of India can support the exporters by negotiating Free Trade Agreements (FTAs), lowering Non-tariff barriers (NTBs) and expeditious implementation of Remission of Duties and Taxes on Exported Products (RoDTEP) scheme.
Production Linked Scheme (PLI) Scheme is likely to encourage players in food processing industry to enhance their processing capacities and meet the demand for rising challenges. To enhance competitiveness and meet the hygiene needs at a scale, the players specially MSMEs will require high quality testing and certification infrastructure.
A coordinated approach is the need of hour taking into account opportunities in regional preference in domestic market, exports and quality management systems. National Single Window Clearance System and Project Development Cell are a step in the direction for a coordinated approach.
Inter-Ministerial Body led by MoFPI and with participation from APEDA, MPEDA, FSSAI supported by a Food Processing Council can prove to be a catalyst for industry development at segment/product level, tapping value added exports and addressing issues and challenges.
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