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> Food Industry >

Review

Israel-India

> Business Guide >

2017

India’s Growing Food Industry

Collaborations with foreign players will bring faster growth

and improved technology

I

ndia’s food industry, which is currently

valued at US$ 39.71 billion, is expected

to grow at a CAGR of 11% to $ 65.4

billion by 2018 mainly through JVs, foreign

collaborations,industrial licenses,and 100%

export-oriented units.

Market Size

The Indian food and grocery market is the

world’s sixth largest with the Indian food

processing industry contributing 32% of

the country’s total food market. The Indian

gourmet food market is currently valued at

$ 1.3 billion, growing at a CAGR of 20 per

cent.India's organic foodmarket is expected

to increase three-fold by 2020.

The online food ordering business is

witnessing exponential growth.The organized

food business in India is worth $ 48 billion,of

which food delivery is valued at $ 15 billion.

Online food delivery players like FoodPanda,

Zomato, TinyOwl and Swiggy are building

scale through partnerships.

Investments

CII estimates that the food processing sectors

have the potential to attract $ 33 billion of

investment over the next 10 years.

US-based food company Cargill Inc, aims

to double its branded consumer business

in India by 2020.

Danone SA plans to launch 10 newproducts

in 2017.

KKR & Co LP, the US-based private equity

firm, plans to invest $ 77 million in dairy

company Kwality Ltd.

Henry Ford Health Systems (HFHS), a

US-based health and wellness group,

plans to set up 'Culinary Wellness'

branded stores across the country.

Mondelez International, the US-based

confectionery, food, and beverage major,

inaugurated its new manufacturing plant

in Andhra Pradesh set up for $ 190 million.

Gujarat Cooperative Milk Marketing

Federation (GCMMF), popularly known as

'Amul', plans to invest $ 733.6 million to

establish ten new processing plants.

Government Initiatives

Some of the major initiatives taken by the

Government of India to improve the food

processing sector in India:

In Union Budget 2017-18,the Government

of India has set up a dairy processing infra

fund worth $ 1.2 billion.

Union Budget 2016-17 proposed 100% FDI

inmarketing of food products produced and

manufactured in India.

The Government has relaxed foreign direct

investment (FDI) norms for the sector,allowing

up to 100% FDI in food product e-commerce.

The Food Safety and Standards Authority

of India (FSSAI) plans to invest $ 72 million

to strengthen the food testing infrastructure

in India.

The Government will set up agencies for

aquaculture and fisheries in coastal states

and export incentives for marine products.

The Government has approved the setting

up of 5Mega Food Parks in Bihar,Maharashtra,

Himachal Pradesh and Chhattisgarh. 42

such mega food parks across the country

are planned.

Road Ahead

Going forward, the adoption of food safety

and quality assurance mechanisms by the

food processing industry offers several

benefits. It would enable adherence to

stringent quality and hygiene norms and

thereby protect consumer health, prepare

the industry to face global competition,

enhance product acceptance by overseas

buyers and keep the industry technologically

abreast of international best practices.

Source:IBEF,Dept.of Commerce & Industry,Govt.

of India

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