Food processing industry in India

Indian food processing industry stands at $135 billion and is estimated to grow with a CAGR of 10 per cent to reach $200 billion by 2015.


The food processing industry in India is large and includes segments such as agriculture, horticulture, plantation, animal husbandry and fisheries. These segment also incorporate other industries that use agricultural inputs for manufacturing edible products. As per Ministry of Food Processing Industries indicates the segments within the food processing industries as listed below:

  • Dairy Segment: Pasteurized and packed milk, Whole milk powder, Skimmed milk powder, Condensed milk, Ice cream, Butter, Ghee and Cheese etc.
  • Fruits and Vegetables segment: Beverages, Juices, Concentrates, Pulps, Slices, Frozen and Dehydrated products, Potato Wafers/Chips, etc.
  • Grains and Cereals : Flour, Bakeries, Starch Glucose, Cornflakes, Malted Foods, Vermicelli, Beer, Grain based alcohol
  • Fisheries: Frozen and Canned products mainly in fresh form
  • Meat and Poultry: Frozen and packed-mainly fresh form
  • Consumer Foods: Snack food, Namkeens, Biscuits, Ready to eat food, Alcoholic and Non-alcoholic beverages

Growth Environment & Drivers

  • The food processing industry in India is witnessing rapid growth. In addition to the demand side, there are changes happening on the supply side with the growth in organised retail, increasing FDI in food processing and introduction of new products.
  • The growth is driven by the fact that the central government has given a priority status to all agro-processing businesses. Government incentives in the field of mega food parks, cold chain and exports benefits are also playing an important role in promoting food processing.


  • The major challenges are investments at different points of the supply and value chain, proper research, farm and lab connectivity, upgradation of technology, increase in farm holding, skill and manpower training, backend and front-end integration and cold chain integration.


  • The opportunities in the food processing industry are vast. However, there is a need to improve technology and productivity to be competitive globally. As the economy grows, the food processing industry will offer bigger opportunities to the new as well as the existing players.

Potentials for Food Processing Industry

Food processing Industry offers distinct benefits to both the producers as well as processors. The following four fundamental shifts in the market conditions reaffirm the potential for the sector.

Rapid growth in organized retail, a catalyst for the food industry
  • Increased consumer spend as organized retail and hypermarkets can drive cost down by 35-40%
  • Employment generation and higher tax revenue
  • Productivity gains across entire supply chain through dis-intermediation and superior technology
Consumer trend towards convenience and ‘enjoying life’ driven by demographic trends in age, income-levels and more women in the workforce
  • Explosion of convenience foods, value-added foods and eating-out
  • Increasing willingness to pay premium for quality products
Global shift to outsourcing from India across products/ services including food
  • High-margin businesses possible in niche export markets (e.g. organic foods, herbal products)
  • Quality improvement and spill-over to domestic markets, as producers meet stringent export requirements
  • Investments in cold chain and transport infrastructure
De-regulation and liberalization of the Indian economy, driven by central and state governments
  • Ease of entry for new businesses and capacity addition
  • Demand-growth from economy growth and rising incomes
  • Potential to bring in global technology, know-how and investments
  • India is the world’s second largest producer of food next to China, but accounts for only 1.6 percent of international food trade.