Food processing industry in India

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SUMMARY
  • India offers the largest diversified production base and has a growing food industry. India is: 
    • World’s largest milk producing nation
    • World’s largest producer, consumer and exporter of spices
    • World’s second largest producer of food grains, fruits, and vegetables.1
  • The total geographical area of India is 328.7 mn ha and the Gross Cropped Area is 200.9 mn ha with a cropping intensity of 142% in 2016-17.2
  • The reported Net Sown Area as recorded in 2014-15 is 140.1 mn ha.3
  • As per the National Agricultural Research Project (NARP), India has been divided into 127 agro-climatic zones. Out of the total 42 Mega Food Parks sanctioned, 17 Food Parks have been operationalized as on May 2019.4
  • Nivesh Bandhu is an investor facilitation portal to assist investors on the investment decisions. A special fund of $285 Mn has been set up in National Bank for Agriculture and Rural Development (NABARD) for affordable credit.5
  • Loans to food & agro-based processing units & cold chains have been classified under agriculture activities for Priority Sector Lending (PSL).


Food processing - 'A sunrise sector'

India's food ecosystem offers huge opportunities for investments with stimulating growth in the food retail sector, favourable economic policies and attractive fiscal incentives. The Food & Grocery market in India is the sixth largest in the world. Food & Grocery retail market in India further constitutes almost 65% of the total retail market in India.
The Government of India through the Ministry of Food Processing Industries (MoFPI) is also taking all necessary steps to boost investments in the food processing industry. The government has sanctioned 40 Mega Food Parks (MFPs) to be set up in the country under the Mega Food Park Scheme. Currently, 17 Mega Food Parks have become functional.

Snapshot of food processing in India 

Food processing - 'A sunrise sector'

India's food ecosystem offers huge opportunities for investments with stimulating growth in the food retail sector, favourable economic policies and attractive fiscal incentives. The Food & Grocery market in India is the sixth largest in the world. Food & Grocery retail market in India further constitutes almost 65% of the total retail market in India.
The Government of India through the Ministry of Food Processing Industries (MoFPI) is also taking all necessary steps to boost investments in the food processing industry. The government has sanctioned 40 Mega Food Parks (MFPs) to be set up in the country under the Mega Food Park Scheme. Currently, 17 Mega Food Parks have become functional.


  • By 2020, Indian Food and Retail market is projected to touch $ 828.92 bn
  • By 2020, the Indian Dairy industry is expected to double to $ 140 bn
  • By 2024, the Food Processing industry will potentially attract $ 33 bn investments and generate employment for 9 mn people
  • By 2030, Indian annual household consumption to treble, making India 5th largest consumer
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.

Food processing Industry Scenario in India 

The Processed food market is expected to grow to $ 543 bn by 2020 from $ 322 bn in 2016, at a CAGR of 14.6%.

Food processing has an important role to play in linking Indian farmers to consumers in the domestic and international markets. The Ministry of Food Processing Industries (MoFPI) is making all efforts to encourage investments across the value chain. The industry engages approximately 1.85 mn people in around 39,748 registered units with fixed capital of $ 32.75 bn and aggregate output of around $ 158.69 bn. Major industries constituting the Food processing industry are grains, sugar, edible oils, beverages and dairy products.
The key sub-segments of the Food Processing industry in India are: Dairy, Fruits & Vegetables, Poultry & Meat processing, Fisheries, Food retail etc.
Key facts:
  • 311.71 mn tonnes of horticulture crop production in 2017-18
  • Milk production of 176.3 mn tonnes during 2017-18 with per capita availability of milk at a level of 375 grams per day in 2017-18
  • Egg production of around 95.2 bn during 2017-18
  • Total fish production was 12.6 mn tonnes during 2017-18
  • Food Retail market is majorly dominated by Food Grocery (growing at CAGR 25%) and Food Service. 



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