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Reasons to invest in Food Processing Business

India ranks second in terms of availability of arable land with 127 diverse agro-climatic zones, having a share of 11.2% of the total arable land in the world. In addition, the resource-rich country has the 6th largest food and grocery market and 5th largest retail market globally. Thus, India is capable of providing the world a perfect blend of traditional and hygienic food processed and packaged according to the modern technology.Food processing industry is indigenous to India because simple home-based techniques such as fermentation have resulted in the creation of world-wide acknowledgment of Indian pickles, papads, chutneys, and murabba. The Gross Cropped Area accounting for around 61.11% of the total geographical area of the country, stands at 200.9 million hectares as per the land use statistics (2013-14). In the similar period, the net sown period is 141.4 million hectares, with a cropping intensity of 142%, up from 139% in 2012-13. The total area sown under Rabi crops in 2017-18 as on 29th December 2017 stands at 56.57 million hectares. Whereas, the area under wheat and rice stands at 27.38 and 1.63 million hectares. Benefiting from such a geographical advantage, India is the largest producer of milk, bananas, mangoes, guavas, papaya, ginger, okra, 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 globally. India is also globally acknowledged as the leading producer of agriculturally allied products. It is the world's biggest milk producer. Milk production in India in 2015-16 stood at 155.5 million tonnes. With a total fish production of 10.07 million metric tonnes, India makes for around 6.3% of the global fish production. Hence, India’s vast coastline of 8129 km, makes it third and second largest in fisheries and aquaculture respectively. The Horticulture sector has recorded a production of 300.6 Million Tonnes, which is 5% higher than in the previous year. The sector has witnessed an average growth rate of 5.5% annually over the last ten years.It also gains from its locational advantage from the viewpoint of trade, as it has close connectivity with Europe, Middle East & Africa from the western coast, and Japan, Singapore, Thailand, Malaysia, Korea, Australia & New Zealand from the eastern coast. World Food India, a mega food event that took place in November 2017, brought together 75000 business visitors, from 61 countries, 75 International & National policymakers and Heads of State, 60 Global CEOs and 100 Indian CEOs; resulting in 5000 B2B meetings over a span of three days. It helped India showcase itself as a preferred investment destination, with MoU’s worth USD 13.56 billion signed by domestic & foreign investors. At present, Global industry players such as GEA Group, Tetra Laval, Buhler, Alfa Laval, Heat and Control and HRS process are reaping the benefits. Nivesh Bandhu, an investor-friendly portal launched recently brings together Central and State Government policies and incentives provided for the food processing sector. It is a one-stop platform for all stakeholders of the industry, including farmers, processors, traders, and logistics operators. To further help the investor make a strategic decision, the portal also includes a Food Map that can help investors take a decision relating to the project location. Apart from it, an Investor tracking and facilitation desk have also been set up with a dual objective to identify new potential investors and help Ministry to organize trade shows both on domestic as well as international front. Such an initiative will help India to meet its investment needs. Private Sector participation has been on a continuous rise in many segments of the value chain. And, there exist huge opportunities for investments in the fields of contract farming, raw material sourcing, and creation of agri linkages. Many international companies have gained a major foothold in contract farming initiatives. Under the scheme of Mega Food Parks, Government has sanctioned 42 parks, and out of these 9 have been made operational so far. Additionally, under the scheme of Integrated Cold Chain and Value Addition Infrastructure, the Ministry is presently assisting 228 such projects, and in 2017, 16 projects got operationalized, creating an additional capacity of 0.24 million metric tonnes of cold storage, 72.70 metric tonnes per hour of individual Quick Freezing (IQF), 3.45million litres per day of Milk of processing/ storage and 472 reefer vans during 2014 - 2017.FSSAI, the apex regulatory body has taken wide steps aiming to simplify product approval along with the creation of a single-interface portal, “The Food Regulatory Portal” for effective and transparent implementation of the food safety laws in the country. Product-specific developments are also being undertaken, for example, setting up of a Common Food Processing Incubation Centre for Shallots in Perambalur. Under the scheme of Modernization of Abattoirs, one project at Panaji (Goa) has been operationalized. Further, during the year 2016, 10 Food Testing Labs have been completed. Sector Specific Skill Development Initiatives are also being taken up, with National Institute of Food Technology, Entrepreneurship and Management (NIFTEM) and Indian Institute of Food Processing Technology (IIFPT) being recognized as Centers of Excellence. Thus, with such major developments, the market for plant and machinery in the food processing sector in the year 2024-25 is poised to stand at USD 51.41 billion. High growth food segments within the Food & Beverage Industry are Breakfast Cereals, Savory Snacks, Ingredients such as seasonings and dressings and pet food. Apart from growing population and burgeoning purchasing power, rising urbanization, rising retail trade due to initiatives such as Digital India, together with presence of global players of the industry can be considered as the major growth drivers for the industry. As, India having a population base of 1.3 billion offers a large demand-driven market, with a retail sector that is expected to treble by 2020. Hence, total consumption of the food and beverage segment domestically is expected to reach to US$1.142 trillion by 2025.