India's Food Processing Industry Expects Double-Digit Growth

By Isaac Fletcher, contributing writer, Food Online

Growing populations, increased incomes, urbanization, and a desire to boost food exports are driving India’s food processing sector, and experts see vast opportunities for growth

During a conference on Future of Food Processing, which was organized by the Confederation of Indian Industry (CII), experts discussed various aspects of the food processing industry, ranging from new foods and technology, to supply chain and logistics. Rajesh Srivastava, Chairman and Managing Director of Rabo Equity Advisors, claims the Indian food processing industry is expected to experience double-digit growth. Srivastava states, “The ever-growing consumer demands have opened up huge investment opportunities for foreign and private entities in the food processing and equipment industry.”

Underscoring the various factors creating a prime investment climate, Srivastava adds, “It is the right time for an investor to invest in this sector. Consumerism, literacy, population, and awareness are the growth driving factors for the food processing industry. All this creates tremendous opportunities for agile marketers, restaurateurs, and hoteliers to capitalize on new trends.”

Rising incomes and urbanization factors have contributed to profound changes in the food processing sector. India’s agricultural sector accounts for 14.1 percent of the nation’s gross domestic product (GDP) and 12.3 percent of exports. High levels of wheat and rice production in India’s northern region also mean that procurement and storage by government and private agencies have created potential opportunities for the industry. Additionally, the food processing sector directly employs around 13 million workers. Abhiram Seth, Former Executive Director of PepsiCo India, says, “A skilled workforce is key to take the food processing sector to next levels of growth.”

However, growth will not necessarily come without challenges. Seth explains, “Supply chain bottlenecks and demand/supply gaps need to be tackled to ensure smooth growth of the sector.” The increased demand for processed food resulting from population growth and increased urbanization will up the need for more value-added products. Further, while India is a large producer of food, its share of food exports is relatively small, a factor that can be addressed through sustained focus on the processed foods industry.