For more than two decades now India has been dreaming of a sunrise in its food-processing industry. Will the sector see a new dawn as the country now faces the challenge of jobless growth?
India is one of the front-running nations when it comes to production, consumption and export of food products in the world. This is well attributed to the robust food production, increasing urbanisation, dynamic lifestyle changes and growing number of working women and nuclear families.
Accounting for 32 pc of the total food market, India’s food-processing sector is estimated to be worth more than EUR 20 billion. It is one of the largest industries in India, currently employing 13 million people directly and 35 million indirectly. It accounts for 14 pc of the manufacturing Gross Domestic Product (GDP), nearly 13 pc of India’s exports and six pc of total industrial investment.
However, when compared to global figures, merely over two pc of India’s annual food production is processed — an abysmally low figure when compared to Malaysia (83 pc), China (23 pc) and the United States of America (US) (65 pc).
Despite a key role in the Indian economy, the agriculture sector is faced with several roadblocks. Heavily exposed to the vagaries of nature and weather, the Indian farming sector is plagued by lack of proper irrigation, low mechanisation, poor agricultural infrastructure and low export orientation. Worst of all, despite a large network of banks—nationalised, private, cooperative, commercial, regional and rural — the farm sector continues to be under serviced —in terms of lending as well as services.
Untapped potential
Sagar Anand Kurade, expert on food processing and associated infrastructure and technologies, asserts that the sector is already improving in India. The Indian food processing industry is worth USD 250 billion. “Today, whatever we have in the country, be it rice, pulses, bread, or any form of food, is processed. Even the water we drink in metros or Tier-I and Tier-II cities is processed.”
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