Food Processing Industry


 

OVERVIEW

The food processing sector is one of the major sectors in India in terms of production, growth, consumption, and export, and has been accorded a priority status by the Government of India. The Indian food processing industry accounts for 32 % of the country’s total food market, 13 % of India’s exports and 6% of total industrial investment. India's food processing sector covers fruits and vegetables, spices, meat and poultry, milk and milk products, alcoholic and non-alcoholic beverages, fisheries, plantation, grain processing and other consumer product groups like confectionery, chocolates and cocoa products, soya-based products, mineral water, and high protein foods.

Exports

The exports of processed food from India were valued at US$ 30.9 billion during the year 2016-17, increasing at a year-on-year growth rate of 4 percent. The exports have declined at a CAGR of 6.7 per cent, as the value of exports fell from US$ 38.1 billion in 2013-14 to approximately US$ 30.9 billion during 2016-17.

Exports of Processed Food from India (US$ mn)
HS Code 2013-14 2014-15 2015-16 2016-17
2 4475.7 4929.3 4210.0 4037.6
3 4823.2 5249.5 4486.3 5501.1
4 705.1 379.0 328.5 292.9
7 1356.1 1180.8 1261.4 1294.7
8 1623.4 1610.7 1584.7 1731.2
9 2746.7 2871.9 2954.9 3185.2
10 10563.3 9551.0 6272.0 6013.0
11 299.1 305.6 299.5 218.0
12 1709.5 2213.9 1673.5 1809.0
13 2414.9 1947.5 869.0 844.4
15 857.4 973.3 877.3 892.6
16 119.7 155.4 212.0 317.3
17 1355.0 1075.2 1763.6 1508.5
18 94.0 138.9 193.3 162.2
19 463.3 489.8 506.2 519.1
20 449.7 504.7 488.3 493.8
21 540.1 587.5 568.8 628.2
22 409.0 377.8 320.5 312.0
23 3047.8 1630.1 802.7 1110.8
TOTAL 38052.9 36172.0 29672.4 30871.5
Source: DGCIS

Foreign Direct Investments

  • 100% FDI is permitted under the automatic route in food processing industries
  • 100% FDI is allowed through government approval route for trading, including through e-commerce in respect of food products manufactured or produced in India.

Outlook

Going forward, the adoption of food safety and quality assurance mechanisms such as Total Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP) by the food processing industry offers several benefits.

It would enable adherence to stringent quality and hygiene norms and thereby protect consumer health, prepare the industry to face global competition, enhance product acceptance by overseas buyers and keep the industry technologically abreast of international best practices.


 

SELECT GOVERNMENT INCENTIVES

  • The Government of India aims to boost growth in the food processing sector by leveraging reforms such as 100 per cent Foreign direct investment (FDI) in marketing of food products and various incentives at central and state government level along with a strong focus on supply chain infrastructure.
  • In Union Budget 2017-18, the Government of India has set up a dairy processing infra fund worth Rs 8,000 crore (US$ 1.2 billion).
  • The Government of India has relaxed foreign direct investment (FDI) norms for the sector, allowing up to 100 per cent FDI in food product e-commerce through automatic route.
  • The Food Safety and Standards Authority of India (FSSAI) plans to invest around Rs 482 crore (US$ 72.3 million) to strengthen the food testing infrastructure in India, by upgrading 59 existing food testing laboratories and setting up 62 new mobile testing labs across the country.
  • The Indian Council for Fertilizer and Nutrient Research (ICFNR) will adopt international best practices for research in fertiliser sector, which will enable farmers to get good quality fertilisers at affordable rates and thereby achieve food security for the common man.
  • The Ministry of Food Processing Industries announced a scheme for Human Resource Development (HRD) in the food processing sector. The HRD scheme is being implemented through State Governments under the National Mission on Food Processing. The scheme has the following four components:
    • Creation of infrastructure facilities for degree/diploma courses in food processing sector
    • Entrepreneurship Development Programme (EDP)
    • Food Processing Training Centres (FPTC)
    • Training at recognised institutions at State/National level

 

SELECT EXPORT MARKET REGULATIONS

IFS Food Standard

The IFS Food Standard is one of the Standards belonging to the umbrella brand IFS (International Featured Standards). It is a Global Food Safety Initiative (GFSI) recognised standard for auditing food safety and quality of processes and products of food manufacturers. It concerns food processing companies or companies that pack loose food products. IFS Food applies when products are “processed” or when there is a hazard for product contamination during primary packing. The standard contains many requirements related to specifications’ compliance and it supports production and marketing efforts for brand safety and quality. The IFS Food standard version 6 has been developed with full and active involvement of certification bodies, retailers, industry and food service companies from all over the world.

FSSAI

The FSSAI is a statutory body for prescribing science-based standards for food articles and regulating their manufacturing, processing, distribution, sale, import and export in order to ensure that food is safe and wholesome for human consumption. Under the Act, a single regulating authority is established for all matters relating to food safety and standards by moving from multi-level and multi-departmental control to a single line of command.

In order to keep a check on food products marketed in India, the FSSAI, also, follows Codex Alimentarius which the FAO and WHO published in 2003 to serve as guidelines for food safety. The Hazard Analysis Critical Control Points system has been introduced as a new quality assurance principle to prevent/avoid health hazards. The HACCP system is included in all stages of food processing, viz. raw materials, storage of food, types of distribution channel and the intended usage of the final product by the consumers.


For further details on Regulations applicable in various geographies, refer to this link: http://www.standardsmap.org/identify