Food Processing in India
The Indian food processing industry was valued at €
92 billion in 2005, a growth of 10% over the
previous year.
Indian food processing industry is becoming an
attractive FDI destination; it attracted around €
790million FDI during 1991-2005 which is 3.3%
of total FDI inflow in India.
The Food Processing Industry sector in India is one of
the largest in terms of production, consumption,
export and growth prospects.
Sectorial Overview
India has arable land of 184 million hectares and produces annually
90 million tonnes of milk
150 million tonnes of fruits and vegetables
485 million livestock, 204 million tonnes food grain
6.3 million tonnes fish, 489 million poultry and 45,200 million eggs
processing level is very low i.e. around 2.20% in fruits and
vegetables, 35% in milk, 21% in meat and 6% in poultry products
India's share of processed food is about 1.6%. Hence,
there is immense potential for growth in this sector.
Fruits and Vegetable Processing
 The capacity of fruits and vegetables processing increased from 1.1million tons
in 1993 to 2.1 million tons in 2006.
Meat and Meat Processing
 Present processing level of buffalo meat is estimated at 21 %, poultry 6 %, and
marine products 8 %.
Dairy Processing
 Milk production is over 90 million tonnes. Per capita milk consumption is 75 Kgs.
Fish Processing
 Long coast line of over 8000 kms., 50600 sq. kms of continental shelf area and 2.2
million sq. km. of exclusive economic zones, India is rich fishery resources.
Consumer Food Industries
 Production is about 4.00 million tons per year.
 During the year 2005-06, financial assistance was sanctioned by Ministry of Food
Processing for 27 consumer food-processing units.
 The total inflow of FDI in FPI sector up to 2005-06 was € 958 million
WHY ENTER THE INDIAN FOOD
PROCESSING SECTOR?
 Seventh largest country, with extensive administrative structure and independent
judiciary, a sound financial network and above all a stable and thriving democracy.
 It is one of the biggest emerging markets, with over 900 million population and a 250
million strong middle class.
 Rapid urbanisation, increased literacy and rising per capita income , have all caused
rapid growth and changes in demand patterns, leading to tremendous new
opportunities for exploiting the large latent market. An average Indian spends about
50% of household expenditure on food items.
 Liberalised overall policy regime, with specific incentives for high priority food
processing sector, provides a very conducive environment for investments and
exports in the sector.
 Very good investment opportunities exist in many areas of food processing industries,
the important ones being : fruit & vegetable processing, meat, fish & poultry
processing, packaged, convenience food and drinks, milk products etc.
Import Duty
Import Duty on Food processing
equipments/ Machinery is as below:
Import Duty
- 15 %
Additional Duty
- 16 %
Educational Cess - 2%
Total Duty
- 36%