Food Processing

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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 vegetables 293.96 311.71 6.04 0.10
Processed fruits and juices 639.65 646.83 1.12 0.21
Cereal Preparations 551.72 548.29 -0.62 0.17
Cocoa Products 192.69 180.10 -6.53 0.06
Misc Processed items 659.18 647.07 -1.84 0.21
Processed meat 2.00 2.17 8.30 0
Total 2339.2 2336.17 -0.13 0.75
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.



  • Pradhan Mantri Kisan Sampada Yojana (PMKSY): PMKSY is a comprehensive central scheme which was set up with an aim to create modern infrastructure with efficient supply chain management from farm gate to retail outlet.The following schemes are implemented under the PMKSY:
  1. Mega Food Projects- Under the Scheme, Government of India provides financial assistance upto ₹ 50 crore per Mega Food Park project. The scheme aims at providing a mechanism to link agricultural production to the market by bringing together farmers, processors and retailers so as to ensure maximization of value addition, minimization of wastage, increase in farmers income and creation of employment opportunities, particularly in rural sector. So far, 19 Mega Food Parks are operational under the Scheme.
  2. Integrated Cold Chain and Value Addition Infrastructure- 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)- The main objective of the Scheme is creation of processing and preservation capacities and modernisation/ expansion of existing food processing units with a view to increasing the level of processing, value addition leading to reduction of wastage. The scheme is implemented through organizations such as Central & State PSUs/ Joint Ventures/ Farmer Producers Organization (FPOs)/ NGOs/ Cooperatives/ SHGs/ Pvt. Ltd companies/ individuals proprietorship firms engaged in establishment/ upgradation/ modernization of food processing units.
  4. Infrastructure for Agro Processing Clusters- The scheme aims at development of modern infrastructure to encourage entrepreneurs to set up food processing units based on cluster approach. These clusters will help in reducing waste of surplus produce and add value to the horticultural/ agricultural produce, which will result in an increase of income of the farmers and create employment at local level.
  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) 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 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. Two-pronged strategy for operationalization of the scheme has been declared by the Ministry which include:
    1. Short-term price stabilizationmeasures consisting of a provision of 50 percent of the subsidy on:
      • Transportation of TOP Crops from production to storage
      • Hiring of appropriate storage facilities for TOP Crops;
    2. Long-term Integrated value chain development projects includes assistance for:
      • 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.
  • The Ministry of Finance has launched ₹ 10,000 scheme for ‘Formalisation of Micro Food Enterprises (MFEs)’to implement the vision of “vocal for local with global outreach”. The unorganized MFEs can leverage the scheme for technical upgradation required to attain FSSAI food standards, build brands and marketing. This will ensure improved health and safety standards, integration with retail markets, as well as improve incomes of MFEs. Existing food enterprises, FPOs, Self Help Groups and cooperatives will also be supported under the Scheme.



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