The World Food India 2017 event is the biggest-ever congregation of global investors and business leaders of major food companies, held in New Delhi from November 3-5, 2017. It is also the first time India has hosted such an event for the food processing sector. It has been organised with the motive of establishing India as a preferred investment destination and sourcing hub for the global food processing industry.
What makes India an attractive destination in the food processing sector?
The sheer consumption patterns and the rising population create immense opportunities for the food processing industry to grow here. At the time of Independence, India was unable to feed 34 crore of its population. Today, India has a population of approximately 1.3 billion. Added to that, India has also become a food exporter. With a little more than 2% of the world’s land, India is feeding 17% of the global population, 11.3% livestock and is also exporting food now.
India has the second-largest arable land area and about 127 diverse agro-climatic zones. Globally, India is the largest producer of milk, banana, mango, guava, papaya, ginger, okra; the second-largest producer of wheat, rice, fruits, vegetables, tea, sugarcane and cashew nut; and the third-largest producer of cereals, coconut, lettuce, chicory, nutmeg, mace, cardamom and pepper.
India has earned the tag of being the world’s fastest growing major economy, and the second-largest producer of food and agri-commodities.
WFI 2017 was conceived to showcase and further the initiatives of the food processing sector in India. 13 MoUs worth Rs 68,000 crore have been signed on the inaugural day of the conference. ITC, PEPSICO, Patanjali and Coca Cola are among the many domestic and multinational firms who signed these MOUs.
Strengthening the Food Processing Sector
Food processing is a priority sector for the “Make in India” programme. As a result, many initiatives and policy changes have been taken in the last three years to take the food processing industry forward.
In terms of total food production, India ranks second globally. Moreover, India’s food processing sector ranks first on employment and factory numbers in operation. Where output is concerned, the sector is third.
As the Prime Minister noted at the inauguration of WFI 2017, the private sector’s participation has been increasing in many segments of the value chain. But India, nevertheless, needs more investment in “contract farming, raw material sourcing and creating agri linkages”. There are several international firms that have taken a lead in contract-farming initiatives in India. And today, India is in a position to be considered a major outsourcing hub by global supermarket chains.
100% FDI in food retail:
One of the biggest policy measures to encourage investors has been to allow 100% Foreign Direct Investment (FDI) in food retail, including through e-commerce, in respect of food products manufactured or produced in India. 100% FDI is already permitted in manufacturing of food products through the automatic route.
To mark the World Food Convention, the Prime Minister launched Nivesh Bandhu (http://foodprocessingindia.co.in/). This unique portal is meant to help bring together information on Central and state government policies as well as incentives provided for the food-processing sector. The portal also maps resources till the local level. It will also be a business-networking platform for all the stakeholders in the food processing industry, meaning farmers, processors, traders, logistics operators, etc.
Pradhan Mantri Kisan Sampada Yojana (PMKSY):
With an allocation of Rs 6,000 crore, the plan is to develop world-class infrastructure, with efficient supply chain management — and from the farm gate to the retail stores. The scheme is expected to leverage an investment of Rs 31,400 crore, handling of 334 lakh MT agro-produce valuing Rs 1,04,125 crore, benefit 20 lakh farmers and generate 5.30 lakh direct and indirect jobs in India by 2019-20.
The PMKSY is an umbrella scheme incorporating ongoing schemes like Mega Food Parks, Integrated Cold Chain and Value Addition Infrastructure, Food Safety and Quality Assurance Infrastructure, among others.
Mega Food Parks:
The creation of Mega Food Parks is a key component of PMKSY. The objective of creating these food parks is to link agro-processing clusters with key production centres. Farmer groups are being encouraged to set up units in these food parks, which will lead to reduced wastage and save on transportation costs.
As of now, nine such parks are already operational. Out of these, seven mega food parks became functional over the last three years, and more than 30 others are in the process of coming up.
Cold Chain Projects:
The objective of the Scheme of Cold Chain, Value Addition and Preservation Infrastructure is to provide integrated cold chain and preservation infrastructure facilities, without any break, from the farm gate to the consumer. For the longest time, cold chain facilities were considered the weakest link in India’s food processing sector.
Nearly 109 cold chains are now operational, most of which have commenced operations in the last three years. Another 133 cold chains have received formal approval and may be operational in the near future.
India finds itself geographically located relatively close to food-importing states. Therefore, all of these advantages and developments put together would make India a favourable hub for exporting processed foods.