The Indian food processing industry is witnessing significant growth, driven by a combination of favorable economic factors, changing consumer preferences, and supportive government policies. In 2022, the market was valued at USD 307.2 billion and is projected to reach USD 547.3 billion by 2028, reflecting a robust CAGR of 9.5% during the forecast period of 2023–28. This impressive growth trajectory underscores the sector’s critical role in India’s economic landscape and its potential as a key driver of employment, innovation, and sustainable development.
The Indian food processing industry is a cornerstone of the nation’s economy, transforming raw agricultural produce into value-added products that cater to both domestic and global markets. Accounting for approximately 32% of India’s total food market, the sector is pivotal in enhancing agricultural productivity, reducing wastage, and ensuring food security. With a market size of USD 307 billion in 2023, the industry is projected to reach USD 700 billion by 2030, driven by government initiatives, technological advancements, and shifting consumer preferences.
Current LandscapeIndia’s food processing sector is one of the largest globally, benefiting from the country’s position as a leading producer of agricultural commodities, including milk, fruits, vegetables, and spices. The industry encompasses a wide range of products, such as ready-to-eat (RTE) meals, packaged snacks, dairy products, and processed fruits and vegetables. In 2022, the sector generated revenue of USD 154.3 billion and is expected to grow at a compound annual growth rate (CAGR) of around 8% through 2027.
The sector has attracted significant foreign direct investment (FDI), with USD 11.79 billion recorded from April 2000 to December 2022. Processed food exports have also risen, contributing 23.5% to India’s agri-food exports in 2023–24. Key export markets include the United States, the United Arab Emirates, and Nepal, with products like basmati rice, processed fruits, and dairy seeing strong demand.
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Government InitiativesThe Indian government has prioritized the food processing industry under the “Make in India” campaign, introducing several schemes to boost growth:Pradhan Mantri Kisan Sampada Yojana (PMKSY): Launched in 2016, PMKSY focuses on creating modern infrastructure, including Mega Food Parks and cold chain facilities. As of January 2024, 399 projects have been completed, creating significant processing and preservation capacities.
PM Formalisation of Micro Food Processing Enterprises (PM FME) Scheme: With an outlay of INR 10,000 crore, this scheme supports over 200,000 micro-enterprises by providing financial, technical, and business assistance, following a One District One Product (ODOP) approach.
Production Linked Incentive (PLI) Scheme: Approved in 2021 with a budget of USD 1.3 billion, the PLI scheme incentivizes manufacturing, promotes innovative SME products, and enhances global competitiveness. A dedicated PLI for millet-based products was introduced in FY23 with an outlay of USD 96 million.
Mega Food Park Scheme: The Ministry of Food Processing Industries has approved 41 Mega Food Park projects, with 24 operational, fostering integrated facilities for processing, storage, and value addition.
These initiatives have improved supply chain efficiency, reduced post-harvest losses, and encouraged investments, with companies like Varun Beverages, ITC Limited, and Haldiram investing heavily in regions like Sandila.
Recent DevelopmentsThe food processing sector has witnessed several transformative developments:Technological Advancements: Adoption of AI, IoT, and blockchain has enhanced supply chain traceability and efficiency. Innovations like zero-waste processing and sustainable packaging are gaining traction.
Startup Ecosystem: Over 3,300 DPIIT-recognized startups are active in the sector, employing 33,000 people across 425 districts. Notable startups include Jackfruit365, which developed patented green jackfruit flour, and Aadvik Foods, a leader in camel milk products.
Export Growth: Exports of processed fruits and vegetables grew by 59.1% in 2022, with cereals and basmati rice also seeing significant increases. The focus on millets, declared the International Year of Millets in 2023, has positioned India as a global hub, with the Indian Institute of Millets Research designated as a Centre of Excellence.
Major Investments: The Adani Group announced a INR 28,000 crore investment in Bihar for food processing projects, while Amul established the world’s largest curd manufacturing facility in Kolkata with a USD 69.1 million investment.
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ChallengesDespite its growth, the industry faces several hurdles:Infrastructure Gaps: Inadequate cold chain and storage facilities lead to significant post-harvest losses.
Regulatory Compliance: Diverse regulations across ministries create complexities for exporters, particularly in meeting international quality standards.
Skilled Labor Shortage: The National Skill Development Corporation estimates a need to skill 17.8 million workers to meet industry demands.
Low Processing Levels: India processes less than 10% of its agricultural output, compared to higher levels in developed economies, indicating untapped potential.
OpportunitiesThe Indian food processing industry offers immense opportunities:Rising Demand for RTE and Health Foods: Urbanization, busy lifestyles, and health consciousness are driving demand for packaged and organic products.
Export Potential: India’s strategic location and diverse agricultural base position it to become a global processed food export hub.
Rural Entrepreneurship: Community-based processing centers and MSME support schemes can create jobs and empower rural communities.
Innovation and Sustainability: Investments in R&D for nutrient-enriched foods, probiotics, and eco-friendly packaging align with consumer trends and sustainability goals.
Future OutlookThe Indian food processing industry is poised for exponential growth, with projections estimating a market size of USD 2,150 billion by 2047. The government’s vision to double the sector’s GDP contribution to 20% by 2030 hinges on modernizing infrastructure, enhancing skill development, and fostering innovation. The integration of advanced technologies and a focus on exports, particularly in high-value segments like millets and organic products, will further strengthen India’s global standing.
ConclusionIndia’s food processing industry is a dynamic sector with the potential to transform agriculture, create millions of jobs, and drive economic growth. Supported by robust government policies, significant investments, and a vibrant startup ecosystem, the industry is well-positioned to capitalize on emerging opportunities. By addressing challenges like infrastructure deficits and regulatory complexities, India can solidify its role as a global leader in food processing, ensuring sustainable development and food security for its billion-plus population.
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It is one of the primary focus sectors under the Make in India initiative.Market insights:The food processing industry is expected to expand at a compound annual growth rate (CAGR) of ~11.5% between FY 2018 and FY 2023 to reach a value of INR 15,971.9 Bn in FY 2023.
Hindustan Unilever Limited, Pepsico India Holdings Private Limited, Cadbury India, Nestle India Limited, Mondelez International Incorporation, Pizza Hut (India) Private Limited, and Perfetti Van Melle India Private Limited are some of the major multinational companies (MNCs) that are investing in the Indian food processing industry.To Request A Sample Copy Of This Report @: https://www.radiantinsights.com/research/food-processing-market-in-india-2018-2023/request-sampleMarket segment insights:There are 10 segments within the Indian food and beverage industry - breakfast cereals, dairy food, bakery, organic food, confectionary, ready meals, naturally healthy beverages, pet food, ingredients, and savory snacks.
These segments are increasingly gaining acceptance in the country, thereby creating immense opportunities for new as well as existing industry players to expand their business operations.
Among these, breakfast cereals and savory snacks are the fastest growing segments and are expected to expand at a CAGR of ~19.23% and ~33.59%, respectively during 2018 to 2023.
Processing levels in different food segments:In terms of processing levels, India still lags compared to other developed countries, particularly in the processing of agricultural products.
Mega food park scheme, value addition and preservation infrastructure, infrastructure for agro-processing clusters, the scheme of cold chain, and scheme for creation/expansion of food processing and preservation capacities are some of the plans implemented for the overall growth of the food processing infrastructure.
