Indian Food Industry

                   Indian Food Industry 

      India is one of the key food producers in the world, with the second largest pure land area. It is the largest producer of milk, pulses, sugarcane and tea in the world. and the second largest producer of wheat, rice, fruits and vegetables. 

India’s Food Processing industry is one of the largest 

industries in the country - it is ranked fifth in terms of production, consumption, export and expected growth. 

The Indian food industry is estimated to be worth over US 200 billion and is expected to grow to US 310 billion by 2015. India is one of the world’s major food producers. but accounts for only 1.7 per cent of

The Indian food processing industry is estimated at 

US 70 billion. It contributed 6.3 per cent to India’s GDP in 2003 and had a share of 6 per cent in the total industrial Production The industry employs 1.6 million workers directly. 

                   Structure and Composition

Food processing is a large sector that covers activities such as agriculture, horticulture, plantation, animal and fisheries. It also includes other industries that use agriculture inputs for manufacturing of products. 

The Ministry of Food Processing, Government of India has defined the following segments within the Food Processing industry: 

• Dairy, fruits & vegetable processing

• Grain processing

• Meat & poultry processing

• Fisheries 

Consumer foods including packaged foods, beverages 

and packaged drinking water. While the industry is large in terms of size, it is still at a nascent stage in terms of development. Out the country’s total agriculture and food produce, only 2 per cent is processed. The highest share of processed 

food is in the Dairy sector, where 37 per cent of the total produce is processed, of which 15 per cent is processed by the organised sector.

Primary food processing packaged fruit and vegetables, 

milk, milled flour and rice, tea, spices, etc. constitutes around 60 per cent of processed foods. It has a highly fragmented structure that includes thousands of rice mills flour mills, pulse mills and oil-seed mills, several thousands of bakeries, traditional food units and fruits, vegetable and spice processing units in unorganised sector. In the organised sector is relatively small, with around 516 flour 

mills, 568 fish processing units, 5,293 fruit and vegetable 

processing units, 171 meat processing units and numerous 

dairy processing units at state and district levels. 

Segment-wise analysis Dairy Sector

India stands first in the world in terms of milk production .The output expected to be about 108 million tonnes, growing at a compounded annual growth rate of 4 per cent. Consumption of milk has registered a growth of nearly 8.4 per cent in urban areas and is currently valued. 

The dairy sector ranks first in terms of processed foods 

with 37 per cent of the produce being processed. The 

organised sector processes an estimated 15 per cent of the total milk output in India. There are 676 dairy plants registered with Government of India, which come under the organised sector.

Milk and milk products contribute to a significant 17 per 

cent of the country’s total expenditure on food. Traditional dairy products account for about 50 per cent of the total milk produced Fruits and Vegetables. 

India produces the widest range of fruits and vegetables in the world. It is the second largest vegetable and third largest fruit producer accounting for 8.4 per cent of the world’s food and vegetable production. 

Meat and Poultry Processing

India has the largest number of population in 

the world accounting for 50 per cent of buffaloes and 16 per cent of the goat population. Meat production grew at a CAGR of 34 per cent during the period 1999-2004 

Fisheries

India is the third largest fish producer in the world and second in in-land fish production. The Fisheries sector in India has been classified into marine, inland and aquaculture. The fisheries sector contributes 1.1 per cent to the country’s GDP. This segment also provides employment 

Beverages

The beverages market primarily consists of non-alcoholic beverages which can be broadly classified into carbonated drinks, non-carbonated drinks and hot beverages. This segment is estimated at US 155 million out of which fruit juices and fruit-based drinks account for US 60 million. The market size of organised carbonated drinks is estimated at US 119 million. In the past decade the carbonated drinks 

market registered a healthy growth rate of 20 per cent, driven by the positive changes in India’s consumer profile.

Packaged foods segment in India registered a growth of 8 per cent in 2005 - 06 Noodles/Vermicelli is the fastest growing category in this segment with a CAGR at 15 percent. The market for branded noodles is estimated at 230 million servings per year.

Staples – Bread, Wheat Flour, Salt and Sugar

Bread is slowly coming to be a staple product consumed by people of  in India. Total bread production in the country in 2004-05 was estimated at 2.7 million tons, growing at 7.5 per cent. About 55 per cent of bread production comes from the organised sector. 

India has access to several natural resources that provides it a competitive advantage in the food processing sector. Due to its diverse climate conditions, it has a wide-ranging and large raw material base suitable for food processing industries. 

Presently a very small percentage of these are processed into value added products. The semi-processed and ready to eat packaged food segment is relatively new and evolving.

Related and Supporting Industries

The Indian food processing industry has significant support from the well developed R&D and technical capabilities of Indian firms. India has a large number of research institutions like Central Food Technological Research Institute, Central Institute of Fisheries Technology, National Dairy Research 

Institute, National Research and Development Centre etc.

Processing Technology

Most of the processing in India is currently manual. There is limited use of technology like pre-cooling facilities for vegetables, controlled atmospheric storage and irradiation facilities. This technology is important for extended storage of fruits and vegetables in making them conducive for further processing.

In the case of meat processing, despite the presence of over 3600 licensed slaughter-houses in India, the level of technology used in most of them is limited, resulting in low exploitation of animal population. 

Bringing in modern technology is an area that existing as well as new investors in the sector can focus on, this will make a clear difference in both process efficiencies as well as quality of the end product.


                                                       -   By Rehan Shaikh