What does Make In India Hold For Food Sectors?

Blowing the trumpet on revolutionizing food sectors and bringing capital to the country, Prime Minister Narendra Modi announced the concept of Make in India on 25th September, 2014. The idea of this programme is to help our nation emerge as the top destination globally for foreign direct investment surpassing United States and China.

Make In India- Equinox Labs

Source: Make In India-Food Processing

Largest democracy and with the largest population in the world, a huge man power is at disposal. This added with the expected foreign capital investment, the boom in the food processing industries is expected to be exponential.

11 Reasons to Invest In India-
  • A rich agriculture resource base – India was ranked No.1 in the world in 2013 in terms of production of bananas, mangoes, papayas, chick peas, ginger, lemons & limes, whole fresh buffalo milk, goat milk and buffalo meat.
  • India ranks second in the world in the production of sugarcane, dry beans, lentils and safflower oil. Further, India is at third position in the production of cabbages, cashew nuts, cauliflower, coconuts, garlic, onions, green peas, potatoes, rice paddy, tea, wheat and tomatoes.
  • The country’s gross cropped area amounts to 195.25 Million Hectares, with cropping intensity of 139%. The net irrigated area is 65.26 Million Hectare.
  • A total of 127 agro-climatic zones have been identified in India.
  • Strategic geographic location and proximity to food-importing nations makes India favourable for the export of processed foods.
  • Extensive network of food processing training, academic and research institutes.
  • 42 mega food parks are being set up in Public Private Partnership (PPP) at an investment of INR 98 Billion. The parks have around 1,200 developed plots with basic infrastructure enabled that entrepreneurs can lease for the setting up of food processing and ancillary units.
  • The cost of skilled manpower is relatively low as compared to other countries.
  • Attractive fiscal incentives have been instated by central and state governments and these include capital subsidies, tax rebates, depreciation benefits, as well as reduced custom and excise duties for processed food and machinery.
  • Major global players in the food domain are already present in India.
  • 138 cold chain projects are being set up to develop supply chain infrastructure.

Source: Make In India-Food Processing

The main motto behind this initiative is job creation and skill enhancement in all 25 sectors in question. What catches the eye in food is that major investors like Mars, Pepsi, McCain, Hershey and Coca cola have contributed in overall capital share of the food domain in the country.

What is our Market size?

Over the recent past, multiple factors have worked together to facilitate growth in the agriculture sector in India. These include growth in household income and consumption, expansion in the food processing sector and increase in agricultural exports. Rising private participation in Indian agriculture, growing organic farming and use of information technology are some of the key trends in the agriculture industry.

As per the 4th Advance Estimates, food grain production is estimated at 253.16 million tonnes (MT) for 2015-16. Production of pulses estimated at 17.33 million tonnes.

With an annual output of 146.3 MT, India is the largest producer of milk, accounting for 18.5 per cent of the total world production. It also has the largest bovine population. India, the second-largest producer of sugar, accounts for 14 per cent of the global output. It is the sixth-largest exporter of sugar, accounting for 2.76 per cent of the global exports.

Spice exports from India are expected to reach US$ 3 billion by 2016–7 due to creative marketing strategies, innovative packaging, strength in quality and strong distribution networks. The spices market in India is valued at Rs 40,000 crore (US$ 5.87 billion) annually, of which the branded segment accounts for 15 per cent.

The procurement target for rice during marketing season (MS) 2015–16 has been finalised as 30 MT.

Source: Indian Brand Equity Funds – Agricultural Sector

Highlights of Make In India-
  • Food processing sector is now recognised as the new priority as per the new manufacturing policy in 2011. This ushers new variables and possibilities to venture into businesses, developments and transport of food products.
  • Government had also allotted a special fund of INR 2000 Crore for the year 2014-15 which is now extended for the year 2015-16 as well. Many such funding and loans have been sanctioned, which will ensure greater flow of credit to entrepreneurs for setting up of food processing units and attract investment in the sector.
  • Services like pre-cooling, waxing, ripening and labeling are exempted from paying service tax which comes as a huge relief to food processing sector.
  • Exemption to transportation by rail, or vessels or road will be limited to transportation of food grains including rice and pulses, flours, milk and salt only. Transportation of agricultural produce is exempted.
  •  ‘Negative List’ and ‘Exempted Category’ are provided benefits with respect to service tax payment.
  • Many Custom duty and Central Excise duty exemption on food products, services and machinery come in as a huge relief to the entrepreneurs.
  • Investment opportunities are far and wide, with domains ranging from fruits and vegetables, confectionery and bakery, fermented beverages, food additives and nutraceuticals, dairy products, fruit and cereal based beverages, grain processing, fish and sea food processing and packaging, food processing equipment, labeling and preservation process, spice pastes, consumer goods and much more.
  • Supply chain infrastructure – this niche has investment potential in food processing infrastructure, the government’s main focus is on supply chain related infrastructure like cold storage, abattoirs and food parks-a unique opportunity for entrepreneurs, including foreign investors to enter in the Indian food processing sector.
  • Agencies like Ministry of Food Processing Industries, FSSAI, All India Food Processors Association are actively involved in monitoring and enhancing the motto of the initiative.

To know more about FSSAI, Visit for Testing and Compliance related matters.

While both China and India were lagging behind in terms of manufacturing during 1985, exponential growth was observed in 20 years by the dragon of the continent. [testimonials design=”classic” backgroundcolor=”” textcolor=”#1e73be” random=”” class=”” id=””] [testimonial name=”” avatar=”male” image=”” image_border_radius=”” company=”” link=”” target=”_self”]If one of the many super power can achieve this in 20 years, why can’t the largest democracy do so?[/testimonial] [/testimonials]

Investment portal, conference and a project- an initiative comprising all three in one is a lion’s step taken by the government. Whether the goals achieve the intent is for time to decide and India to watch.

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