The Indian food processing industry accounts for 32 percent of the country’s total food market. It is one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. It contributes around 8.80 and 8.39 percent to the Gross Value Added (GVA) in manufacturing and agriculture, respectively. The sector contributes to 13 percent of India’s total exports and 6 percent of the total industrial investment in the country. India has diversified range of food culture, spices and non- agri commodities.
In India, the food processing sector has emerged as a high growth and high-profit sector due to its immense potential for value addition. Food processing has an important role to play in linking Indian farmers to consumers in the domestic and international markets. Food processing in India covers fruit and vegetables, plantations, grain processing, spices, milk and dairy products, meat and poultry, fisheries, non-alcoholic and alcoholic beverages, as well as other consumer product groups such as confectionery, chocolates, cocoa products, soya based products, mineral water and high protein food.
The exports from food processing industry during 2019-20 stood at US$ 2.3 billion, registering a decline of 0.75 percent, as compared to corresponding period of the previous year. Although, processed meat accounted for a negligible share in India’s total export, the exports of processed meat recorded the highest y-o-y growth of 8.30 percent during the given period. The export of cocoa products on the other hand witnessed a decline of (-) 6.53 percent during 2019-20, as compared to corresponding period of the previous year.
Exports of Select Principal Commodities from India in the Food Processing Industry
(In US$ Million)
|Commodity||Apr- Mar' 19||Apr-Mar' 20||% Growth||% Share in Total Exports (2019-20)|
|Processed fruits and juices||639.65||646.83||1.12||0.21|
|Misc Processed items||659.18||647.07||-1.84||0.21|
|Source: Ministry of Commerce and Industry|
Foreign Direct Investments
FDI of 100 percent is permitted under the automatic route in the food processing industries. FDI of 100 percent is allowed through government approval route for trading, including through e-commerce in respect of food products manufactured or produced in India. The sector attracted cumulative FDI of US$ 9.98 billion between April 2000- March 2020, accounting for 2.12 percent of the total FDI inflows in the country.
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.
Exporting food products to the USA are subject to FDA inspection when offered for import at the USA ports of entry. FDA may detain shipments of products offered for import if the shipments are found not to be in compliance with the USA requirements. For an overview of the USA Import Program, please visit the links provided below: US Food Drug Administration
The EU legislation demands for many health and supervisory requirements that are meant to guarantee that imports meet the standards of production in Member States. In general, health certificates are required for all products of animal origin imported in the EU and phytosanitary certificates are needed for all plant products that could introduce pests into the EU. Shipments to free zones and sea vessels only need to fulfill EU animal health requirements as these goods are not subject to the EU public health requirements. For more information: European Commission
Food exports to the UK must fulfill the labelling, packaging, chemical safety, additives and organic product requirements. The UK regulations imposes various import restrictions on various food categories. For more information: Food Standards Agency