The food processing sector in India is evolving, contributing to the nation's economic framework. The industry has grown at an AAGR of 7.26% over the past seven years, enhancing GDP, employment, and exports. The Ministry of Food Processing Industries (MoFPI) supports this growth through initiatives like the Pradhan Mantri Kisan Sampada Yojana and the Production Linked Incentive (PLI) Scheme, focusing on infrastructure and supply chain efficiency.
According to IMARC, the sector's value reached US$ 336.4 billion in 2023, with projections of US$ 735.5 billion by 2032 at a CAGR of 8.8%. The "Make in India" policy promotes domestic manufacturing and investment, positioning food processing as a priority industry. The sector's growth offers employment opportunities and supports millions of livelihoods.
Consumer lifestyle changes and urbanization drive demand for processed foods, including ready-to-eat meals. Regulatory improvements facilitate market entry, enhancing export potential. However, processed food exports are only 16% of India's agri-exports, compared to 25% and 49% for the US and China, respectively. This presents growth opportunities in processed fruits, vegetables, seafood, and dairy.
Urbanization is altering consumption patterns, with demand for ready-to-eat foods expected to reach Rs. 12 lakh crore by 2025. The organic food market is projected to grow at a CAGR of 20%, driven by health-conscious consumers. Technological advancements, including automation and AI, are transforming the sector, with over 60% of food manufacturers expected to adopt these technologies by 2025.
India's food exports are predicted to reach US$ 61 billion by 2024, with ethnic foods leading this growth. Government initiatives aim to boost exports by US$ 10 billion by 2025. The sector offers opportunities for MSMEs and startups, particularly in rural areas, supported by schemes like the PM Formalisation of Micro Food Processing Enterprises Scheme.
The Indian government supports the sector through the PLI Scheme, Mega Food Park Scheme, and FDI liberalization. Infrastructure bottlenecks, limited SME technology access, regulatory hurdles, and skilled labor shortages pose challenges. Addressing these issues is critical for the sector's development.
Source: IBEV