Food Processing Industry

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India has diversified range of food culture, spices and non- agri commodities. The food processing industry accounts for 13% of India’s Exports. India ranks first among the world’s largest milk producing nations since 1998. It is also world’s third largest producer of cashew nuts and second largest producer of fruit grains, fruits and vegetables. It engages 11.6% of workforce in the employment sector. India is globally ranked 1st in production of several Agri-Commodities and 2nd in total food production after China.

India is also globally acknowledged as the leading producer of agriculturally allied products. It is the world's biggest milk producer with milk production in 2017-18 being registered at 176.4 million tonnes. Additionally, with a total fish production of 10.07 million metric tonnes, India makes for around 6.3% of the global fish production. Hence, India’s vast coastline of 8129 km, makes it third and second largest in fisheries and aquaculture respectively.


The exports of processed food from India were valued at US$ 35.5 billion during the year 2017-18, increasing at a year-on-year growth rate of 4 %. The exports have declined at a CAGR of 0.49 % during FY15 to FY18, as the value of exports fell from US$ 36.1 billion in 2014-15 to approximately US$ 35.4 billion during 2017-18.

India's exports of Processed Food were US$ 4258 Million in 2017-18, which including the share of products like Mango Pulp (US$ 104.54 Million), Dried and Preserved Vegetable (US$146.54 Million), Other Processed Fruit and Vegetable (US$ 528.22 Million), Pulses (US$ 228.32 Million), Groundnuts (US$ 524.82 Million), Guargum (US$ 646.94 Million), Jaggery & Confectionary (US$ 214.20 Million), Cocoa Products (US$ 177.47 Million), Cereal Preparations (US$ 552.33 Million), Alcoholic Beverages (US$ 326.68 Million), Miscellaneous Preparations (US$ 442.56 Million) and Milled Products (US$ 136 Million).

Exports of select principal commodities from India in food processing industry (US$ mn)
Commodity Apr-Nov’ 17 Apr-Nov’ 18(P) % Growth % Share
Processed vegetables 177.33 193.06 8.87 0.09
Processed fruits and juices 404.35 407 0.65 0.19
Cereal Preparations 362.94 353.96 -2.47 0.16
Cocoa Products 109.05 128.30 17.65 0.06
Misc Processed items 351.23 431.12 22.75 0.20
Processed meat 0.79 1.10 39.26 0.00
Dated: 18/1/19
(P- Provisional)
Source: Ministry of Commerce, FTPA

Foreign Direct Investments

FDI Policy

  • 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.
  • FDI Inflow to food processing sector was US$ 484.82 million in the FY18 (Apr-Oct). FDI in the food processing sector rose to 24% in 2017-18 vis-à-vis 2016-17.


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 is expected to offer 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.



  • Allocation for Ministry of Food Processing has been doubled in the Budget 2018-19 to Rs. 1400 Crores
    • Promotion of cluster based development of agri commodities and regions in partnership with Ministry of Agriculture, Commerce and allied ministries;
    • 100% income tax deduction from profit derived from activities such as post- harvest value addition to agriculture to Farmer Produce Organisations (FPOs) having annual turnover of Rs. 100 crores;
    • Setting up of state of art testing facilities in all the 42 Mega Food Parks to encourage export of agri-commodities realizing their full potential.
  • Revamped national mission on food processing: The government is taking steps to launch a new scheme – SAMPADA or Pradhan Mantri Kisan Sampada Yojana (Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters) by 2019-20. The overall mission will involve the launch of three separate schemes – creation and expansion of food processing and preservation capacities, new agro-processing clusters, and establishing backward and forward linkages. SAMPADA will have an outlay of US$935 million (Rs 6000 crores).
The following schemes are implemented under Pradhan Mantri Kisan Sampada Yojana (PMKSY)-
  1. Mega Food Projects- Under the Scheme, Government of India provides financial assistance upto Rs. 50 Crore per Mega Food Park project.
    Five Mega Food Parks were inaugurated during this period taking the total number of Mega Food Parks in the country to 14. These include:
    1. Himalayan Mega Food Park at Kashipur in Udham Singh Nagar district in Uttarakhand
    2. Greentech Mega Food Park at Roopangarh Village in Ajmer, Rajasthan
    3. Satara Mega Food Park in Satara District, Maharashtra
    4. Paithan Mega Food Park in Aurangabad District in Maharashtra
    5. Gujarat Agro Infrastructure Mega Food Park
  2. Integrated Cold Chain and Value Addition Infrastructure - 81 projects have been approved by Inter Ministerial Approval Committee (IMAC). The Government has introduced Cold Chain Scheme with an objective to facilitate entire supply chain viz. pre-cooling, weighing, sorting, grading, waxing facilities at farm level, multi product/ multi temperature cold storage, CA storage, packing facility, IQF, blast freezing in the distribution hub and reefer vans, mobile cooling units for facilitating distribution of horticulture, organic produce, marine, dairy, meat and poultry etc. The scheme allows flexibility in project planning with special emphasis on creation of cold chain infrastructure at farm level.
  3. Creation/Expansion of Food Processing & Preservation Capacities (Unit scheme)- 70 projects have been approved under the scheme till date.
  4. Infrastructure for Agro Processing Clusters - 33 projects have been approved under the scheme till date
  5. Creation of Backward and Forward Linkages - The objective of the scheme is to provide effective and seamless backward and forward integration for processed food industry by plugging the gaps in supply chain in terms of availability of raw material and linkages with the market. Under the scheme, financial assistance is provided for setting up of primary processing centres/ collection centres at farm gate and modern retail outlets at the front end along with connectivity through insulated/ refrigerated transport.
  6. Human Resources and Institutions- The Ministry launched a new sub-scheme i.e. Scheme for Human Resources and Institution – Skill Development (SHRISD) for assisting skilling infrastructure and Development of Course Curriculum with a budget outlay of Rs.27.50 Crore from 2017-18 to 2019-20 with following two components
    1. Development of Course Curriculum / Training Module in English, Hindi and translation of the same in recognized regional languages based on the Qualification Packs (QPs) validated by National Skill Development Corporation (NSDC) as National Occupational Standards.
    2. Establishing Training Centre (TC) / Expansion of Existing Training Centre to   impart skill/ training on various job roles in food processing as per the National Skill Qualification Framework (NSQF).
  7. Operation Greens - Operation Greens was announced in the Budget speech of 2018-19 with an outlay of Rs 500 crores to stabilize the supply of Tomato, Onion and Potato(TOP) crops and to ensure availability of TOP crops throughout the country round the year without any price volatility.
    A major step was taken when the Ministry declared a two pronged strategy for operationalization of the scheme which comprises of
    1. Short term Price Stabilisation Measures consisting of a provision of 50% of the subsidy on:
      • Transportation of Tomato Onion Potato(TOP) Crops from production to storage
      • Hiring of appropriate storage facilities for TOP Crops
    2. Long Term Integrated value chain development projects
      • Capacity Building of FPOs & their consortium
      • Quality production
      • Post-harvest processing facilities
      • Agri-Logistics
      • Marketing / Consumption Points
      • Creation and Management of e-platform for demand and supply management of TOP Crops.
  8. The Ministry launched an in-house toll free Interactive Voice Response service at 1-800-111175. People applying under various provisions of Pradhan Mantri Kisan Sampada Yojana (PMKSY) can call on this number and get their queries resolved by the concerned department.
  • Pradhan Mantri Kaushal Kendra (PMKK) : Pradhan Mantri Kaushal Kendra is Ministry of Skill Development and Entrepreneurship’s initiative towards creation of standardized infrastructure for delivery of skill training which are equipped to run industry-driven courses of high quality with focus on employability and create an aspirational value for skill development training. As on December 2018, 719 PMKKs have been allocated across 29 States and 6 UTs, covering 631 Districts and 521 Parliamentary Constituencies (PC). Out of which, 515 PMKKs have been established and work is under progress to establish 204 additional PMKK Centres.