Food quality safety and investments

Table of
Contents
1. India Food Processing Industry Overview
1.1 Agricultural and Allied Products Outlook
1.1.1 Production Trend
1.1.2 By Segment
1.2 Industry Size & Future Outlook
1.2.1 By Segment
1.3 State-Wise Contribution
1.4 Trade Scenario
1.5 FDI in Food Processing
2. Sector Policies & Initiatives
2.1 Make in India Initiatives
2.2 Infrastructure Policies
2.3 Investment Policies
2.4 Food Safety
2.5 Skill Development Initiatives & Awareness
2.6 Technology Development
3. Top 10 States - Strategic Outlook
3.1 Andhra Pradesh
3.2 Maharashtra
3.3 Uttar Pradesh
3.4 Karnataka
3.5 West Bengal
3.6 Bihar
3.7 Tamil Nadu
3.8 Madhya Pradesh
3.9 Gujarat
3.10 Punjab
4. Recommendations to Stimulate Growth

Food Quality , Safety and Investments - Propellants for Processing Sector 7
1.1 Agricultural and Allied Products
Outlook
1.1.1 Production Trend
Agriculture has been a crucial sector for the Indian
economy; more than half of the rural population still
depends on agriculture for its livelihood. Leading
industries, like cotton textiles, jute and sugar industries,
rely on the agriculture sector for supply of raw material.
However, its contribution to the nation’s GDP has
fallen down to 13.7% (2012-13) from 30% (1990-91) as
the industrial and service sectors have overtaken the
agriculture sector during the past two decades.
Over 60% of India’s land area is arable, making it the
second largest country in terms of total arable land.
Agricultural products that are traded include rice,
wheat, potato, tomato, onion, mangoes, sugar-cane,
beans, cotton, etc. Also, India is the largest producer,
consumer and exporter of spices and spice products.
Agricultural export accounts for 10% of India’s total
exports. Agricultural production in India has been
witnessing slow growth, of around 2% since 2010-
11, as it largely depends on monsoon and due to
change in climatic conditions, there is a shortage of
rainfall across the country. The agricultural and allied
products production in 2014-15 is estimated to be
around 1400 Million Tonnes. The Indian agriculture
sector is anticipated to gain momentum in the near
future backed by the strong government support to
increase investments in agricultural infrastructure such
as irrigation facilities, warehousing and cold storage.
The regulatory authority of agriculture sector in India
is “Department of Agriculture and Cooperation” under
the “Ministry of Agriculture”. It manages several other
bodies, such as the National Dairy Development Board
(NDDB), to develop other allied agricultural sectors.
1.1.2 By Segment
Agriculture sector can be segmented into several
segments such as fruits, vegetables, crops, dairy
products, meat and fish. India produces around 275
Million Tonnes of food grains annually and is also a
largest producer of milk and a second-largest producer
of sugar in the world. Additionally, India is the sixth-
largest exporter of sugar, accounting for 2.76% of the
global exports.
In2014-15,cropproductionaccountedforanestimated
share of 70% of the total agricultural production in
India Food Processing Industry Overview1
Figure 1‑1 Agriculture and Allied Products Production
(BillionTonnes), 2010-11 to 2014-15
Source: Ministry of Agriculture, RNCOS
Note: e = RNCOS Estimation
2010-11 2011-12 2012-13 2013-14 2014-15e
1.26
1.33 1.32
1.37
1.42

Food Quality , Safety and Investments - Propellants for Processing Sector8
the country. It majorly constitutes rice, wheat, cereals,
pulses, food grains, oilseeds, sugarcane, cotton, jute
and mesta. Fruits and vegetables together accounted
for about 19% of the total production, followed by
dairy products with only 10% share. Meat and fish
production accounted for a very small share in the total
agricultural and allied products production.
1.2 Industry Size & Future Outlook
Food processing is a process of value addition to
the agricultural or horticultural produce by various
methods like grading, sorting, preserving, packaging,
etc. Processing is a technique of transforming a raw
agricultural product into eatable food or beverage.
The Indian food processing industry plays a vital role in
India’s economic growth and it has been growing faster
than the agricultural and manufacturing sector. The
Indian food processing industry accounts for about
32% of the total India’s Food Market.
India is the world’s second-largest producer of food
after China and has the potential to outpace China in
the coming future. In 2014-15, the estimated size of
Indian food processing industry was INR 7.95 Trillion,
and it is expected to grow at CAGR 9.5% during the
period 2014-15 to 2019-20, reaching around INR 12.5
Trillion.The primary factors that drive the growth of the
industry are rising disposable income, high growth of
organizedretailandprivatelabelpenetration,increased
demand for functional foods and beverages, changes
in lifestyle, increasing number of nuclear families and
Table 1‑1: Agricultural and Allied Products Production (000’Tonnes), 2010-11 to 2014-15
Production (000’Tonnes) 2010-11 2011-12 2012-13 2013-14 2014-15e CAGR (%)
Fruits 74,878 76,424 81,285 88,977 97,500 7%
Vegetables 146,554 156,325 162,187 162,897 164,000 3%
Rice 95,980 105,300 105,240 106,540 108,000 3%
Wheat 86,870 94,880 93,510 95,910 98,000 3%
Coarse Cereals 43,680 42,010 40,040 43,050 46,000 1%
Pulses 18,240 17,090 18,340 19,270 20,500 3%
Oilseeds 32,480 30,010 30,940 32,880 35,000 2%
Sugarcane 342,380 361,040 341,200 350,020 360,000 1%
Cotton 33,000 35,200 34,220 36,590 39,000 4%
Jute & Mesta 10,620 11,400 10,930 11,580 12,300 4%
Milk 121,848 127,904 132,431 137,685 144,000 4%
Meat 4,869 5,514 5,948 6,400 6,900 9%
Fish 8,231 8,666 9,040 9,579 10,195 5%
Source: Ministry of Agriculture, RNCOS
Note: e = RNCOS Estimation
Figure 1‑2 Agricultural and Allied Products Production by
Segment (%), 2014-15
Source: RNCOS Estimation
Crops
Vegetables
Milk
Fruits Meat & Fish
70%
12%
10%
7%
1%

working women. Moreover, technology advancement
and government support has further catalyzed the
growth of Indian food processing Industry.
Despite the huge size of the Indian food processing
industry it is still in its infancy stage, as only 12% of
the total India’s agriculture produce is processed.
There is a strong need for the government to take
effective measures to increase level of processing of
the agriculture production.
1.2.1 By Segment
The Indian food processing industry can be broadly
segmented into distinct categories: grain mill &
starch products, vegetable & animal oil and fats, dairy
products, beverages, prepared animal feed and other
food products.Tremendous growth opportunities exist
in every segment of Indian food processing industry
backed by the increasing demand, government
support and favorable economic conditions.
Grain mill & starch products are considered to be the
prominent segment as they account for the majority of
food processing value of output. The major grains that
are processed in the country are rice, wheat, maize,
barleyandmilletslikejowar,bajraandragi.Further,only
15% of the total wheat production is processed into
wheat products.The second-largest share of the Indian
food processing industry is captured by the vegetables
& animal oil and fats, which are processed into cooking
oils, margarine, shortening and compound fat.
In 2012-13, dairy products accounted for about 11% of
the total registered food processing’s value of output
with INR 825 Million and most of the processing is done
by the unorganized sector. The share of organized
dairy processing sector is as low as 15%. Some of
the milk products processed in the country are milk,
butter, cheese, ice creams, milk powders, malted milk
food, condensed milk and infant foods. Major players
in the dairy processing are Nestle and Britannia. The
remaining share of Indian food processing value of
output is accounted for by beverages, prepared animal
feeds and other food products.
1.3 State-Wise Contribution
In 2014-15, the value of Indian agricultural and allied
activities output was INR 19,264 Billion, which is 1.5%
higher than that of 2013-14. Uttar Pradesh contributed
the maximum share in the value of agricultural output
Figure 1‑3 Food Processing Industry (INRTillion), 2014-15
to 2019-20
Source: RNCOS
12.5
11.3
10.2
9.4
8.6
8.0
2014-15e
2015-16e
2016-17f
2017-18f
2018-19f
2019-20f
Figure 1‑4 Food Processing Industry by Segment (%),
2012-13 (P)
Source: Ministry of Food Processing Industry
Note: The segmentation is based on the value of output by registered food
processing units
P: Provisional Results
Grain Mill &
Starch Products
Vegetable &
Animal Oils & Fats
Dairy Products
Beverages
Prepared
Animal Feeds
Others 24%
22%
11%
7%
3%
33%

with INR 2,620 Billion, followed by Andhra Pradesh
(10%), Maharashtra (9%) and Madhya Pradesh (8%).
The top 9 states account for about 71% of the total
value of agricultural output and 29% of the output
comes from rest of India.
According to the latest survey of Industries, the total
number of registered food processing industry (FPI)
units in India during the year 2012-13 was 37,175.
Among the industry, the highest number of registered
factories are located in Andhra Pradesh, accounting
for about 15% of the total registered food processing
industry units in the country. Tamil Nadu is the second
highest state with 5,161 FPI units and constituting 14%
of the total registered FPI units, followed by Telangana
(10%), Maharashtra (8%), and Punjab (8%). The top 7
states account for about 66% of the total registered FPI
units in the country.
1.4 Trade Scenario
The export value in the food processing sector has
been witnessing an escalating trend with CAGR of
around 33% during the period 2010-11 to 2014-15.The
value of APEDA product exports during 2014-15 was
INR 1,313 Billion. With the surging investment in food
processing, various government initiatives, demand
for processed foods, meliorated income levels, and
bilateral trade agreements, the exports of APEDA
products is likely be fueled further in years to come.
In 2014-15, the top country claiming highest share in
the APEDA products export was Bangladesh followed
by Indonesia and UAE with shares worth 12.4%, 6.3%
and 5.7% respectively. In 2014-15, the major items
Figure 1‑5
Figure 1‑6
Value of Agricultural and Allied Activities
Output by States (%), 2014-15
Registered Food Processing Industry Units by
States and UTs, (%), 2012-13
Source: RNCOS Estimation
Note: Based on historical data by Ministry of Agriculture, Government of India
Uttar Pradesh
Andhra Pradesh
Maharashtra
Madhya Pradesh
RajasthanWest Bengal
Tamil Nadu
Punjab
Gujarat
Others 14%
10%
9%
8%
8%8%5%
5%
5%
29%
Andhra Pradesh
Tamil Nadu
Telangana
MaharashtraPunjab
Uttar Pradesh
Karnataka
Others
15%
14%
10%
8%
8%
6%
5%
34%
Source: Annual Survey of Industries, 2012-13
Figure 1‑7 Export & Import of APEDA Products (INR Billion),
2010-11 to 2014-15
Source: Directorate General of Commercial Intelligence and Statistics
(DGCIS)
2010-11 2011-12 2012-13 2013-14 2014-15
287
222227180146
1313
1369
1183
835
424
Imports Exports

exported to the top 3 destinations included buffalo
meat, basmati rice and non-basmati rice.
On the other hand, in 2014-15, import of APEDA
products reached INR 287 Billion, growing at a CAGR of
nearly 18% during the period 2010-11 to 2014-15. The
top country claiming the highest share in the APEDA
products import was Canada followed by Myanmar
and US. In 2014-15, major items imported from the
top 3 destinations included pulses, fresh fruits and
alcoholic beverages.
India is focused on food sector with National Mission
on Food Processing. Such initiatives are expected to
bridge the gap between food demand-supply.The very
fact itself will reduce India’s dependence on imports in
the years to come.
1.5 FDI in Food Processing
The government of India has permitted 100% FDI in
food processing industry on automatic route except
for the items reserved for micro, small and medium
enterprises (MSME). The food processing industry
accountsforarounda2.5%shareinthetotalFDIinflows
in India. There is an increasing trend in the FDI inflows
in Indian food processing industry as in 2014-15, the
total FDI inflows in the food processing industry was
INR 31.6 Billion and it has grown at CAGR 39% during
the period 2010-11 to 2014-15.
However, during the year 2013-14, the FDI inflows in
food processing industry witness a record break value,
which was 11 times higher than the corresponding
valueof2012-13.Theprimaryfactorforthetremendous
growth was the announcement of investment plan
of American food and beverages giants Coca-Cola
and PepsiCo in India. Coca-Cola is expected to invest
US$ 5 Billion in India by 2020, while its rival PepsiCo is
expected to spend US$ 5.5 Billion in India by 2020.
A number of active measures have been taken up by
the government to upgrade the food processing units
in terms infrastructure, human resource, and research
and development. Further, to boost FDI in the country
the government has relaxed the EXIM policies as well;
for example, duty free import of capital goods, raw
materials and intermediates and exemption of export
income from Corporate Tax, etc.
Figure 1‑8 FDI in Food Processing Industry (INR Billion),
2010-11 to 2014-15
Source: Department of Industrial Policy and Promotion (DIPP)
2010-11 2011-12 2012-13 2013-14 2014-15
31.7
251.1
21.9
8.38.6

2.1 Make in India Initiatives
NABARD Loan for Food Processing
In the Budget 2015-16, a fund of INR 20 Billion (US$
301.3 Million) was assigned under National Bank for
Agriculture and Rural Development (NABARD) to
provide cheaper credit to food processing industry.
Under this scheme, the entrepreneurs setting up
food processing businesses in designated food parks
would get loans at subsidized interest rates. The food
processing activities such as cleaning, grading, waxing,
controlled ripening, labeling, packing and packaging,
warehousing, canning, freezing, freeze drying and
more are eligible under the scheme.
The ministry has notified 148 food parks in which
concessional credit can be availed by food processing
units. As of December 2015, a loan of INR 5.2 Billion has
been sanctioned to 12 Mega Food Projects.
Sector Policies & Initiatives2
Reserve Bank of India Loan for Food- & Agro-
Based Processors
The Reserve Bank of India grants loan to food &
agro-based processing units and cold chains, under
Agriculture activities for Priority Sector Lending
(PSL), with overall sanctioned limit of INR 1 Billion per
borrower. The scheme ensures greater flow of credit to
entrepreneurs for setting up of food processing units
and attracts investment in the sector.
Exemption from Service Tax
In the budget 2015-16, the government of India
has exempted service tax on the services of pre-
conditioning, pre-cooling, ripening, waxing, retail
packing and labeling of fruits and vegetables. This
initiative aims to promote food processing sector and
controlling price rise of perishable items.
The government also exempted service tax on
transportation of ‘food stuff’ by rail, vessels or road,
which particularly includes food grains (rice and pulses,
flours, milk and salt). Transportation of agricultural
produce is separately exempted.
Exemption from Excise Duty
In 2015-16 budget, the government has announced
omission of 5% additional excise duty on “waters,
including mineral waters and aerated waters,
containing added sugar or other sweetening matter or
flavored”.

2.2 Infrastructure Policies
Mega Food Park
The Mega Food Park scheme was implemented by
the Ministry of Food Processing Industries (MoFPI)
during the 11th
five year plan to enhance the growth
of food processing industry in the country through
establishing a robust food processing infrastructure
bolstered by a competent supply chain. The scheme
aims to bring agricultural farmers, processors,
retailers and distributors together at one place to
maximizing value addition, minimizing wastages,
increasing farmers’ income and creating employment
opportunities, particularly in rural sector. The food is
processed, packed, labeled and distributed from these
mega food parks to retailers.
The scheme provides a one-time capital grant of 50%
of the project cost (excluding land cost) subject to a
maximum of INR 500 Million in general areas and 75%
of the project cost (excluding land cost) subject to
a ceiling of INR 500 Million in difficult and hilly areas
i.e. North East Region including Sikkim, J&K, Himachal
Pradesh, Uttarakhand and ITDP notified areas of the
states.
The Government of India has approved the setting up
of5MegaFoodParksinthestatesofBihar,Maharashtra,
Himachal Pradesh and Chhattisgarh. Currently, 39
Mega Food Parks have been granted assistance. The
government plans to set up 42 such mega food parks
across the country in near future.
Scheme of Cold Chain, Value Addition and
Preservation Infrastructure
The Scheme of Cold Chain, Value Addition and
Preservation Infrastructure was implemented by the
Ministry of Food Processing Industries (MoFPI) in 2008
to provide coherent and complete cold chain, value
addition and preservation infrastructure facilities,
for perishables, from the farm gate to the consumer,
without any delay or break. It includes pre-cooling
facilities at production sites, refrigerated vans, mobile
cooling units as well as value addition centers which
includes infrastructural facilities like Processing/Multi-
line Processing/ Collection Centres, etc. for horticulture,
organic produce, marine, dairy, meat and poultry etc.
The scheme provides assistance of 50% the total
cost of plant and machinery and technical civil works
in General areas and 75% for NE region, including
Sikkim and difficult areas (J&K, Himachal Pradesh and
Uttarakhand) subject to a maximum of INR 100 Million.
Government has approved 138 cold chain projects
during2009-2015,including30newcoldchainprojects
approved by the ministry in May, 2015. As of December
2015, 70 cold chain projects were operational and
remaining are still under construction.
Vision 2015 Action Plan
Vision Document 2015 was prepared by the Ministry of
Food Processing Industries to promote food processing
industries, enhance level of processing and exploit
the potential of domestic and international market

for processed food products. The action plan expects
to treble the size of investment in the processed
food sector by increasing the level of processing of
perishables from 6% to 20%, value addition from 20%
to 35%, and share in global food trade from 1.5% to
3% by 2015. To achieve these targets, an investment of
INR 1000 Billion was required by the year 2015. Out of
which, the government had invested INR 100 Billion.
Modernisation/Setting up of Abattoirs
Modernisation/Setting up of Abattoirs scheme was
implemented by the Ministry of Food Processing
Industries (MoFPI) to improve the overall hygiene
by establishing modern abattoirs (meat shops) and
modernizing or up scaling the infrastructure of
existing abattoirs. Modernizing abattoirs will improve
the competitiveness in the supply of wholesome
meat as well as the development of new retail chains.
The scheme is implemented with the involvement of
local bodies (municipal corporations and panchayats)/
public sector undertakings/co-operatives/boards
under government and has flexibility for involvement
of private investors on PPP basis.
The scheme envisages a grant of 50% of the cost of
plant and machinery and technical civil work and
other eligible items subject to a maximum of INR
150 Million in general areas and 75% of the cost of
plant and machinery and technical civil work and
other eligible items subject to a maximum of INR 150
Million in difficult areas (NE states including Sikkim,
Jammu & Kashmir, Himachal Pradesh, Uttarakhand and
Integrated Tribal Development [ITDP] notified areas of
the States) per abattoir.
As of December 2015, 40 projects have been approved
and out of these, 5 abattoirs have become operational.
Setting up of Packaging Centres
The government of India has introduced the scheme
for the establishment and development of packaging
centers in food processing industry. The objective of
the scheme is to provide well established packaging
facilities to improve the life of the food products and
make them internationally available.
The scheme envisages a grant of 25% of the project
cost in general areas and 33.33% assistance in difficult
areas subject to maximum INR 20 Million for the
establishment of packaging centre.
Capital Investment Subsidy for Construction/
Expansion/Modernization of Cold Storage for
Horticulture Products (a sub scheme under
MIDH)
This scheme grants subsidy for setting up of cold
storage (of capacity above 5000 MT and up to 10000
MT) and their modernization. It envisages assistance
@ 40% of capital cost of project limited INR 3 Million
per project in general area and 50% limited to INR 3.75
Million per project in case of NE, hilly & scheduled area.
Mission for Integrated Development of
Horticulture (MIDH)
The open-ended scheme of National Horticulture
Mission/Horticulture Mission for North East &
Himalayan States (a sub scheme of MIDH) provides
assistance for setting up of cold storage (long-term
storage and distribution hubs) up to 5000 MT capacity.
The assistance is extended as subsidies to credit-linked
projects @ 35% of capital cost of project in general area
and 50% in case of hilly & scheduled area.
Small Farmer Agri-Business Consortium
(SFAC) Assistance to Cold Storage under
Integrated Scheme for Agricultural Marketing
(ISAM)
SFAC was established as a nodal agency by Dept. of
Agriculture, Govt. of India in 1994, to coordinate with
variousstategovernments,civilsocietypartners,private
sector, financial institutions, resource persons and
other stakeholders to help in the conduct of baseline
studies, promote Farmer Producer Organizations

(FPOs) across the country and link producer groups
(both existing ones and newly formed institutions)
to marketing opportunities. It also provides capital
support in the form of Venture Capital Assistance and
Project Development Facility to the small farmers.
Cold storage, which is a part of a permissible integrated
value chain project, is eligible for subsidy under
Integrated Scheme for Agricultural Marketing (ISAM).
However, the cold storage component should not
exceed 75% of Total Financial Outlay (TFO).
The scheme grants assistance to projects as @ 25% of
capital cost and maximum ceiling to INR 22.5 Million in
general area and 33.33% and maximum ceiling up to
INR 40 Million in case of NE, hilly & scheduled area.
Agricultural and Processed Food Products
Export Development Authority (APEDA)
Assistance for Cold Chain under Agriculture
Export Promotion Plan Scheme for XII Plan
The APEDA as a part of strategy develop the
industries relating to the scheduled products (eg,
fruits, vegetables and their products, meat and meat
products, poultry and poultry products, alcoholic and
non-alcoholic beverages, etc) for export and provides
assistance for setting up a cold chain.
The scheme provides assistance as 40% subsidy subject
to a limit of INR 7.5 Million for cold chain projects with
mechanized handling system.
Horticulture Mission for North Eastern Region
and Himalayan States (HMNEH) Assistance for
Food Processing Unit
Under Horticulture Mission For North Eastern Region
and Himalayan States (HMNEH), a sub-scheme of
MIDH, food processing units for horticulture products
are eligible for credit-linked, back-ended capital
investment assistance of 50% of project cost (ceiling
amount of project cost is INR 80 Million) in the states of
J&K, Himachal and Uttarakhand.
2.3 Investment Policies
Foreign Direct Investment
FDI is allowed for all the processed food products up
to 100% via automatic route except for items reserved
for MSMEs. The permissible FDI limit for MSMEs via
automatic route is 24%. For any foreign investment
more than 24%, the government route can be opted,
also the enterprise will have to be licensed under
Industrial License and Industries (Development &
Regulation) Act, 1951.
Nearly 30% of the FDI in the country is made by the
European Union (EU) countries such as Netherlands,
Germany, Italy and France. Some of the successful
ventures from EU countries include Perfetti, Cadbury,
Godrej-Pilsbury, Nutricia International, Manjini
Comaco, etc.
Credit-Linked Capital Subsidy Scheme
(CLCSS) Assistance for Plant & Machinery
The Ministry of Small Micro and Medium Enterprise
(MSME) implemented a Credit Linked Capital Subsidy
Scheme (CLCSS) for promotion and technology
up gradation of Small Scale Industries (including
food processing industry). The scheme provides
subsidy at the rate of 15% of the investment in plant

and machinery to micro and small manufacturing
enterprises (MSEs). Maximum amount of subsidy is INR
1.5 Million and maximum ceiling of investment in plant
and machinery is INR 10 Million.
Small Farmer Agri-Business Consortium
(SFAC) Assistance for Venture Capital
Small Farmer Agri-Business Consortium (SFAC)
provides venture capital assistance to agri-business
projects in the form of equity. The SFAC provides
assistance as 26% of promoter’s equity or amount of
INR 5 Million (whichever is lower) in general area and
40% of the promoter’s equity or amount of INR 5 Million
(whichever is lower) in Hilly and NE regions.
SIDBI Venture Capital Ltd assistance for
Venture Capital to MSME
SIDBI, through its Smaridi Fund scheme provides
assistance to the MSME (including food processing
MSMEs) with a corpus of INR 4,500 Million, which
is invested by the Department for International
Development (DIFD) UK and SIDBI. The assistance is
provided in form of equity ranging between INR 50
Million and INR 250 Million.
2.4 Food Safety
Food Safety Act 2006
TheFoodSafetyandStandardAct(FSSA)wasformulated
by the Ministry of Food Processing Industry in 2006.
The act aims to establish a single reference point for
all matters relating to food safety and standards, by
moving from multi-level, multi-departmental control
to a single line of command. To this effect, the act
establishes an independent statutory authority – the
Food Safety and Standards Authority of India (FSSAI).
The salient features of the act are:
yy Food Safety and Standard Authority will be aided
by scientific panels and central advisory committee
to lay down standards for food safety. These
standards will include specifications for ingredients,
contaminants, pesticide residue, biological hazards
and labels.
yy The law will be enforced through State
Commissioners of Food Safety and local level
officers.
yy Everyone in the food sector is required to get a
license or registration which would be issued by
local authorities.
yy Every distributor is required to identify any food
article to its manufacturer, and every seller is
required to identify any food article to its distributor.
Anyone in the sector should be able to initiate recall
procedure if he finds that the food sold has violated
specified standards.
Quality Assurance, Codex Standards and
Research & Development and Promotional
Activities
Ministry of Food Processing Industries implemented
a scheme for quality assurance, codex standards,
research & development and promotional activities
to enhance competitive edge for the enterprises
producing processed foods and providing services by
prescribing domestic as well as international standards
for food safety and quality control. Further, the scheme
aims to emphasize on R&D for the development of
innovative products, cost effective processes and
efficient technologies for food processing sectors

The scheme comprises of following components:
yy Setting up/upgradation of food testing laboratories
(maximum grant INR. 25 Million per project)
yy Implementation of HACCP / ISO / GMP / GHP / Safety
Management System in food processing units
(maximum grant INR 1.5 Million/INR 2 Million per
project in general area / difficult area)
yy Research & development in food processing sector
yy Promotional activities including advertisement &
publicity
2.5 Skill Development Initiatives &
Awareness
Human Development Scheme in Food
Processing Sector
Human resource development (HRD) in the food
processing sector was implemented by the Ministry of
Food Processing Industries (MoFPI) in association with
Sector Skill Council, i.e., Food Industry Capacity & Skill
Initiatives (FICSI). This scheme is being implemented
throughStateGovernmentsundertheNationalMission
on Food Processing (NMFP). The main objective of this
scheme is to enhance the supply of trained manpower
or personnel at all the levels of food processing sector.
The scheme has the following four components:
yy Creation of infrastructure facilities for degree/
diploma courses in food processing sector
yy Entrepreneurship Development Programme (EDP)
yy Food Processing Training Centres (FPTC)
yy Training at recognized institutions at State/National
level
As of September 2015, skill development programme
has been launched in 30 centres across 11 states of
the country and 12182 persons have been enrolled
for training. Further, 124 training centers have been
affiliated in 25 States.
Setting up of National Institute of Food
Technology, Entrepreneurship and
Management (NIFTEM)
NationalInstituteofFoodTechnology,Entrepreneurship
and Management (NIFTEM) is a deemed university
under Denovo category and an autonomous
institution under Ministry of Food Processing
Industries, Government of India. NIFTEM is considered
as an International Center of Excellence in the field of
Food Sciences & Food Technology. The objectives of
the institution are to offer high-quality educational and
research programme with management orientation
specific to the food industry, propagate knowledge
on the processed food sector and provide business
incubation facility.
In 2011, government-approved revision of the
estimated cost for setting up of NIFTEM from INR 2446
Million to INR 4799 Million. NIFTEM conducts skill
development trainings and outreach programmes for
students, farmers and entrepreneurs.
As of December, NIFTEM had conducted 104 skill
development trainings and outreach programmes had
trained 8469 persons. It has skilled 44 persons under the
Pradhan Mantri Kaushal VikasYojana (PMKVY) scheme.
Setting up of The Indian Institute of Crop
Processing Technology (IICPT)
Indian Institute of Crop Processing Technology (IICPT)
is an independent research & development and
educational institution under the Ministry of Food
Processing Industries, Government of India. The main
activities of IICPT are teaching, research and expansion

in areas of food processing to serve the needs of
stakeholders in the country.
As of December 2015, the institute has developed
and commercialized 28 technologies (idli dry mix to
Supreme Power Food Products, SSR Products and
others), 25 gadgets and has filed 15 patents. Further
during the year 2015, it has conducted 293 skill
development programmes for over 4122 beneficiaries.
Out of these, 17 have established their own industries
and 51 have secured industry-based jobs.
Promotion of Innovation, Entrepreneurship
and Agro Industry
The Promotion of Innovation, Entrepreneurship and
Agro Industry scheme was launched by the Ministry
of Micro, Small and Medium Enterprises (MSME) for
enterprises that are primarily engaged in activities
pertaining to wholesale/retail trade; repair of personal
and household goods; manufacture of food products
and beverages; manufacture of wearing apparel;
dressing and dyeing of Fur; manufacture of textiles;
hotels and restaurants; sale, maintenance and repair
of motor vehicles and motorcycles; retail sale of
automotive fuel; manufacture of furniture; education;
and other businesses / services to provide required
skill set and expertise for establishing a business,
promote entrepreneur culture in the country, facilitate
innovative business solutions and promoting and
strengthening the MSME sector.
Pradhan Mantri Kaushal Vikas Yojana
(PMKVY)
Pradhan Mantri Kaushal Vikas Yojana (PMKVY) was
introduced by the new Ministry of Skill Development
& Entrepreneurship (MSDE) to encourage skill
developmentforyouthbyrewardingtheminmonetary
terms for successful completion of approved training
programs.
The main objective of the scheme are:
yy Encourage standardization in the certification
process and instigate a process of creating a registry
of skills
yy Enable and mobilize a large number of Indian youth
to take up skill training and become employable
and earn their livelihood. Increase productivity of
the existing workforce and align the training and
certification to the needs of the country
yy Provide monetary awards for skill certification to
boost employability and productivity of youth by
incentivizing them for skill trainings
yy Reward candidates undergoing skill training by
authorized institutions at an average monetary
reward of INR 8,000 (rupees eight thousand) per
candidate
2.6 Technology Development
Scheme for Technology Upgradation/
Establishment/Modernization for Food
Processing Industries
The Scheme for Technology Upgradation/
Establishment/ Modernization for Food Processing
Industries was implemented by the Ministry of Food
Processing Industries (MoFPI) to upgrade processing
capabilities. The scheme covers all the segments, ie,
fruits & vegetable, milk product, meat, poultry, fishery,
oil seeds and such other agri-horticultural sectors,
leading to value addition and shelf life enhancement
including food flavors and colors, oleoresins, spices,
coconut, mushroom, hops.
The scheme grant to the unit will be provided @ 25%
of the cost plant & machinery and technical civil works
subject to maximum of INR 5 Million in general areas
and @ 33% or up to INR 7.5 Million in difficult areas
(Jammu & Kashmir, Himachal Pradesh, Uttarakhand,
Sikkim, North Eastern, Andaman & Nicobar Islands,
Lakshadweep and integrated Tribal Development
Project (ITDP)). Only new plant and machinery will be
eligible.

3.1 Andhra Pradesh
Andhra Pradesh holds a superior position in the
country’sagribusinessindustrywithmajorcontribution
in agriculture, horticulture, dairy, poultry, fisheries
and marine production. State’s agriculture sector
contributed close to 23.3% to state’s GSDP (constant
prices) in FY 2014. Around 60% of the state’s population
is employed in agriculture and related activities, which
makes food processing one of the major thrust areas
for the state. Realizing the huge potential in the sector,
government has been quite supportive to the sector.
Under Mega Food Parks Scheme of Ministry of Food
Processing Industries (MoFPI), Andhra Pradesh has
been sanctioned 3 Mega Food Parks in Chittoor,
Godavari, and Krishna districts. Also, MoFPI has
sanctioned seven cold chain projects in the state
Top 10 States - Strategic Outlook3
Figure 3‑1
Andhra Pradesh - Agriculture and Allied Products
Production (MillionTonnes), 2011-12 & 2012-13
Source: National Horticulture Board, Directorate of Economics and Statistics,
Department of Agriculture and Cooperation, National Dairy Development
Board, Department of Animal Husbandry, Dairying & Fisheries
2.4
18.7
2.7
18.4
12.112.0
9.8
12.812.4
14.2
Fruits Vegetable Food
Grains
Milk Meat &
Fishes
2011-12 2012-13
Table 3‑1: Andhra Pradesh - Opportunities in Food Processing
S. No.
Food
Produce
Production (Million
Tonnes), 2012-13
Processed Food Items
1 Milk 12.8
Cheese, Ice Cream, Pasteurized and Flavored Milk, Butter, Paneer, Ghee,
Butter Milk, Curd, Cottage Cheese, Packaged Cream, Condensed Milk,
Confectionary Products (Chocolates, Biscuit Creams), Milk-based sweets (RTE
Gulab Jamuns)
2 Rice 11.5
Rice Flour, Rice Bran Oil, Parboiled Rice, Rice Flakes, Wafers, Pasta, Idli Mix, Snacks
(Quaker), Cereal Bars (Sweet)
3 Tomato 5.2 Puree, Ketchup, Sauce, Jam, Paste, Dried Powder, etc
4 Maize 4.9 Corn Flakes, Snacks, Popcorn, Starch, Oil, Corn Syrup, Corn Flour, Corn Soup, etc
5 Citrus Fruits 3.8
Juice, Jam, Jellies, Squash, Candies, Pulp, Confectionary Products (Candies,
Chocolates, Biscuit Creams)
Source: National Horticulture Board, Directorate of Economics and Statistics, Department of Agriculture and Cooperation, National Dairy Development Board
Note: Figures Rounded Off to One Decimal Place

under its ‘Scheme for Cold Chain, Value Addition and
Preservation Infrastructure.
Food processing industry is gaining prominence in the
state with more facilities coming up and continuous
policies and initiatives of the state government to
boost the processing sector. The opportunity lies in
those processed food items whose raw material base is
as strong as the growth in food processing units.
The processed food items and specially RTE/RTC foods
have been gaining prominence across India as the
younger generation is more inclined towards easy-to-
cook food items. Also, together with other initiatives,
the Andhra Pradesh government is expecting INR 50
Billion investments in the food processing industry by
2020 as it plans to set up integrated food processing
parks in all districts. Hence, In light of the ongoing and
proposed investments in the state, Andhra Pradesh
food processing industry is expected to boom.
3.2 Maharashtra
Maharashtra is a state of biological diversity with 9
agro-climatic zones, which makes it suitable for various
types of production. It is one of the major horticulture
states with more than 1.3 Million hectares of land under
horticulture. It is also the largest producer of seedless
grapes, banana, mandarin, onion and tomatoes. The
exports from the state for fresh vegetables and fruits
accounts for close to 30% share and for processed food
productsupto50%.Hence,thepositionofMaharashtra
on the food production chart is quite substantial and
projects a high potential in food processing industry in
the coming years.
Table 3‑2: Maharashtra - Opportunities in Food Processing
S. No.
Food
Produce
Production (Million
Tonnes), 2012-13
1 Milk 8.7
Gulab Jamuns)
2 Cereals 4.4 Snacks & Namkeens
3 Onion 4.7 Onion Flakes, Powder, Paste, etc
4 Banana 3.6 Juice, Chips, Puree, RTS juice, Jam, Jelly, Wine, Banana Cheese, Flour, etc
5 Pomegranate 0.4 Juice, Jam, Jelly, Frozen Arils, etc.
Figure 3‑2
Maharashtra - Agriculture and Allied Products
Grains
Milk Meat &
Fishes
2011-12 2012-13
1.2 1.2
10.4
11.0
12.5
8.58.8
10.5
11.1
8.7

Under its Mega Food Parks Scheme, MoFPI has given
final Approval to the Mega Food Park project in
Aurangabad and Satara. There are approximately 30
projects approved by MoFPI under its Cold Chain,
Value Addition and Preservation Scheme. Also, under
the scheme for Setting up of New/ Modernization of
Existing Abattoirs of MoFPI, Maharashtra has been
sanctioned 2 abattoirs projects so far.
The huge production base, abundance of natural
resources, supportive steps by state’s government
and changing lifestyle are few of the reasons backing
magnificent growth in state’s food processing. Also,
increase in number of companies in the sector of value-
added food products has created vast opportunity for
SME’s to cater to this burgeoning demand of value
added food products.
As the state is a major producer of fruits like oranges,
mangoes, grapes, bananas, cashew, pomegranates
and other citrus family fruits like sweet lime, Japan is
keen to invest in the state, especially in food processing
sector.The investment climate in the state is strong and
exhibits a major scope for foreign direct investment in
the sector. Hence, in light of the ongoing and proposed
investments in the state, burgeoning demand for value
added food products and changing demographics,
state’s food processing industry is expected to boom.
3.3 Uttar Pradesh
Uttar Pradesh is the second-largest economy in India
after Maharashtra, with agriculture as its leading
occupation. Wheat is the principal food crop and
sugarcane is the main commercial crop. Uttar Pradesh
is the leading agricultural state in the country and is
poised to emerge as a most sought after destination
for the food processing industry.With large stretches of
agrarian fertile plains, a vast network of rivers and filled
with natural resources, state is economically one of the
more dynamic states in the country. The developed
agricultural industry is one of the supporting pillars for
the emerging food processing industry in the state.
UP State Industrial Development Corporation (UPSIDC)
is the nodal state agency to develop industrial areas
and provide primary infrastructure. It has developed
159 Industrial Areas and 23 Residential Areas
encompassing 41948 acres of land with a wide range
of infrastructure facilities. Under the Scheme for Cold
Chain, Value Addition and Preservation Infrastructure,
MoFPI has approved six cold chain projects out of
which the projects at Unnao, Agra and Noida have
already started its commercial operations.The ongoing
industrial and commercial developments are set to
give big boost to the overall food processing industry
of the state.
Uttar Pradesh is one of the leading states in the
production of food grains, especially wheat and rice.
The increasing production base and availability of the
crucial natural resources has brought up Uttar Pradesh
in the ranking of most productive states.
With approximately 1600 cold storages, total storage
capacity close to 5.8 Million Tonnes and APMC Act,
which now provides for Direct Marketing, Contract
Farming and Markets in Private/Coop Sectors, the
Figure 3‑3
Uttar Pradesh - Agriculture and Allied Products
Grains
Milk Meat &
Fishes
2011-12 2012-13
1.0
6.9
19.4
23.3
1.1
50.3
22.6
18.6
5.8
50.8

future outlook for the food processing industry is even
brighter.
3.4 Karnataka
Karnataka portrays specific supply strengths, giving the
state a comparative advantage over other counterparts
in becoming leading food processing hub of the
country. With 10 agro-climatic zones and landscape
highly suitable for agriculture, Karnataka is one of the
most agriculturally diverse states in India. It contributes
70% of India’s coffee and is a major producer of spices,
flowers, fruits and vegetables. The strong agricultural
base together with the presence of more than five
national level research institutes in agriculture &
horticulture sectors makes it an attractive destination
for companies coming up in the food processing sector.
MoFPI has sanctioned one Mega Food Park project
under its Mega Food Parks Scheme in Tumkur in
Karnataka. Apart from MoFPI’s Mega Food Parks
Scheme, the state govt. also has a Food Parks Scheme
under which food parks are being established in
6 districts including Bangalore (Rural), Tumkur,
Shimoga, Davangere, Bijapur and Belgaum. The state
government is also planning to set up a spice park
at Byadagi in Haveri district. Moreover, MoFPI has so
far sanctioned five cold chain projects in the state
under its ‘Scheme for Cold Chain, Value Addition and
Preservation Infrastructure.’
Together with its natural tendency for highly varied
agriculture production, policy-makers efforts
to promote development of supporting agri-
infrastructure, especially through initiatives like crop
cluster development, food parks, agri-economic zones
and agri-SEZs among others, are few reasons boasting
of high potential in state’s food processing industry.
Figure 3‑4
Karnataka - Agriculture and Allied Products
Table 3‑3: Uttar Pradesh - Opportunities in Food Processing
S. No.
Food
Produce
Production (Million
Tonnes), 2012-13
1 Rice 14.4
2 Wheat 30.3
Flour, Suji, RTC (Upma), Bakery & Confectionary Products (Bread, Biscuits/Cookies,
Noodles, Pasta, Rusk, Vermicelli, etc.)
3 Potato 14.4 Chips, Snacks (Potato Bites), Seasonings
4 Mango 4.4
Pulp, Concentrate, Juice, Squash, Tandra/ bar, Pickle, Jam, Jelly, Candy, Dehydrated
Slices, Mango frozen, etc.
5 Banana 0.1 Juice, Chips, Puree, RTS juice, Jam, Jelly, Wine, Banana Cheese, Flour, etc.
Grains
Milk Meat &
Fishes
2011-12 2012-13
0.7 0.7
5.7
12.1
5.5
7.7
6.4
10.9
7.5
6.6

3.5 West Bengal
The state of West Bengal has always been gifted
with a huge amount of natural resources, which is
significant to produce vast range of agricultural as well
as horticultural products. West Bengal is the largest
producer of vegetables in the country and seventh
largest producer of fruits. Horticultural crops cover
close to 20% of net cultivable area in the state. The
state’s dominancy in various agricultural items projects
a huge opportunity for food processing industry
and supportive government initiatives add further
momentum to it.
The Agro food parks are being developed in the state
with the intention of providing support to small &
medium entrepreneurs in setting up facilities like cold
storages, warehouses, quality control labs, effluent
treatment plants etc. A Mega Food Park (MFP) has
been approved by MoFPI at Jangipur, implemented by
the M/s Jangipur Bengal Mega Food Park Ltd and shall
include core processing facilities, factory buildings for
micro and small enterprises (MSES), enabling basic
infrastructure and non-core infrastructure as per the
guidelines of scheme for mega food parks (MFPS). With
similar kind of facilities coming up the food processing
in the state has become a lucrative investment option.
West Bengal accounts for over 11% of total production
of fruits & vegetables in the country and is the leading
producerofcauliflower,brinjal,cabbageandpineapple,
and the second largest producer of potato and litchi.
In response to the ongoing developments in the sector
of food production and food processing, the industry is
Table 3‑4: Karnataka - Opportunities in Food Processing
S. No.
Food
Produce
Production (Million
Tonnes), 2012-13
1 Milk 5.7
Butter Milk, Curd, Cottage Cheese, Packaged Cream, Condensed Milk, Confectionary
Products (Chocolates, Biscuit Creams), Milk-based sweets (RTE Gulab Jamuns)
5 Mango 1.8
Figure 3‑5
West Bengal - Agriculture and Allied Products
Grains
Milk Meat &
Fishes
2011-12 2012-13
2.1
2.9
4.9
2.1
16.0
4.7
23.4
3.1
16.6
25.0

expected to grow with a magnificent growth rate in the
near future.The major investment opportunities for the
SME’s lies in the food items listed above as they enjoy a
high resource base and also are being preferred by the
younger generation as a substitute for staple diet.
3.6 Bihar
Bihar is one of the states which are largely agrarian
and rural with almost 90% of the total population
engaged in agricultural activities. Though the share
of agriculture in the GSDP has been decreasing over
the years and it remains only one-fifth of the GSDP
presently, agriculture still remains the backbone of
the state economy and consequently food processing
sector has made good progress in recent years.
In order to boost the level of food processing, MoFPI
has awarded Final Approval to Pristine Mega Food Park
Pvt. Ltd. (project SPV) for setting up Mega Food Park
project in Khagaria and in Principle Approval to JVL
Mega Food Park Pvt. Ltd. in Rohtas, MUMS Mega Food
Park Pvt. Ltd. in Buxar for setting up Mega Food Park
project. Also, Under the Scheme for Cold Chain, Value
Addition and Preservation Infrastructure, MoFPI has
approved two cold chain projects in the state.
Rice,milkandpotatoarethemajorfooditemsproduced
in the state. As now, state and central government is
inclined towards unveiling the potential of state’s food
processing industry, the derived food items from these
resources exhibit the maximum potential.
Figure 3‑6
Bihar - Agriculture and Allied Products
Table 3‑5: West Bengal - Opportunities in Food Processing
S. No.
Food
Produce
Production (Million
Tonnes), 2012-13
1 Rice 15.0
3 Milk 4.9
Gulab Jamuns)
Grains
Milk Meat &
Fishes
2011-12 2012-13
0.6
4.5
6.8
0.6
14.1
6.6
15.6
3.9
16.3 15.9

The processed food items and specially RTE/RTC
foods have been gaining prominence across India
as the younger generation is more inclined towards
easy-to-cook food items. In response to the ongoing
developments in the sector of food production and
food processing, Bihar’s food processing industry is set
to grow with a better growth rate in the coming years.
3.7 Tamil Nadu
Tamil Nadu is a growing south Indian state with GSDP
increasing at a CAGR of around 15% between FY2005
and FY2012. The services sector contributes 45% to
the state’s income followed by manufacturing and
agriculture at 34% and 21% respectively. Tamil Nadu is
the largest producer of bananas and also leads in the
production of coffee, tea and sugarcane.
In the recent years, state and central government has
taken various initiatives to boost the sector growth.
For instance, Ministry of Food Processing Industries
(MoFPI) has awarded “In-principle” approval to NDR
Infrastructure Pvt. Ltd. in Thiruvallur district and 3F
Industries Ltd. in Krishnagiri district for setting up Mega
Food Park projects. It has so far sanctioned three cold
chain projects in the state under its ‘Scheme for Cold
Chain, Value Addition and Preservation Infrastructure.’
Rice, banana and coconut are the major food items
produced in the state. As now, state and central
government is inclined towards unveiling the potential
of state’s food processing industry, the derived food
items from these resources exhibit the maximum
potential.
Table 3‑6: Bihar - Opportunities in Food Processing
S. No.
Food
Produce
Production (Million
Tonnes), 2012-13
1 Rice 7.5
2 Milk 6.8
Products (Chocolates, Biscuit Creams), Milk-based sweets (RTE Gulab Jamuns)
4 Maize 2.5 Corn Flakes, Snacks, Popcorn, Starch, Oil, Corn Syrup, Corn Flour, Corn Soup, etc
5 Mango 1.4
Figure 3‑7
Tamil Nadu - Agriculture and Allied Products
Grains
Milk Meat &
Fishes
2011-12 2012-13
1.1 1.1
7.4
8.7
10.2
5.6
7.0 7.0
9.1
8.5

3.8 Madhya Pradesh
Theeconomyofthestatemainlydependsonagriculture
with more than 70% of the population involved in
agricultural activities. During the year FY2013, growth
of primary sector in Madhya Pradesh was about 18% as
compared to 3.08 % at all India level. There are about
550 small scale food processing units in the state with
an estimated investment of about INR 71.0 Billion and
about 73 small scale beverage units with an estimated
investment of INR 13.6 Billion.
In order to give a boost to the growing food processing
industry in the state, a mega food park (MFP) has been
approved by MoFPI in Khargone district which is under
implementation. Recently it has also accorded “In-
Principle”Approval to set up a mega food park project
in Dewas district. Several agro food parks are being
developed in the state to promote small and medium
scale units in the state. At present, there are 7 approved
food park in the state.
With improving infrastructure and growth in the
industrial setup, the production and demand of
processed food items is expected to attain high boom
in the coming years.
Major agriculture and horticulture production includes
Wheat, Soybean, Onion, Rice, Potato among others.The
value added products derived from these resources
exhibit bigger and better market opportunities for
upcoming industrial players.
Ongoing industrial developments, high agricultural
and horticulture production, increasing investments,
upcoming SME’s in the sector, has lead to a remarkable
uplift in the processed food manufacturing in the state.
Table 3‑7: Tamil Nadu - Opportunities in Food Processing
S. No.
Food
Produce
Production (Million
Tonnes), 2012-13
1 Rice 4.1
3 Coconut 4.8
coconut milk, dried coconut or copra, desiccated coconut, coconut oil, coconut
water, Nate-de-coco, coconut flour, vinegar, jaggery
4 Milk 7.0
Confectionary Products (Chocolates, Biscuit Creams), Milk-based sweets (RTE Gulab
Jamuns)
Figure 3‑8
Madhya Pradesh - Agriculture and Allied Products
Grains
Milk Meat &
Fishes
2011-12 2012-13
0.1
5.7
12.9
23.7
8.8
0.1
20.4
8.2
10.1
3.4

Similar scenarios are expected to keep boosting the
industry growth in coming years as well.
3.9 Gujarat
Gujarat, located in western part of India, is the 6th
largest state in terms of area and 9th largest in terms of
population in the country. All the resources like fruits,
vegetables, food grains, milk, etc., are in abundance in
the state. Also, state has a major impact of PM Modi’s
industrial polices and Make-in-India move. Of the total
investments worth over INR 829.40 Billion attracted by
food processing sector as of December 2014, Gujarat
attracted the highest share at 20%1
amounting to over
INR 165.7 Billion.
Major agriculture and horticulture production includes
milk, banana and, mango among others. The value-
added products derived from these resources exhibit
bigger and better market opportunities for upcoming
industrial players.
3.10 Punjab
Punjab is the land of food grains and is one of the
leading producers of food grains in the country
especially wheat. Food processing sector is the focus
Table 3‑8: Madhya Pradesh - Opportunities in Food Processing
S. No.
Food
Produce
Production (Million
Tonnes), 2012-13
1 Wheat 13.1
2 Soybean 7.8 Cheese, Sauce, Oil, Milk, Margarine, Animal Feed
4 Rice 2.8
1. The Associated Chambers of Commerce and Industry of India (ASSOCHAM)
Figure 3‑9
Gujarat - Agriculture and Allied Products
area of investment in Punjab due to government’s
special support to the food processing sector and
abundance of agricultural crops.The state government
operatesanagriculturalmegaprojectpolicytofacilitate
investment in the food and agro processing sector. In
line with the thinking of the Government of India, the
state government has formed a separate department
Grains
Milk Meat &
Fishes
2011-12 2012-13
0.8
8.4
11.3
7.1
10.3
0.8
8.9
9.810.1
7.5

of Food Processing Industries to look after the schemes
of National Mission on Food Processing.
In order to improve the food processing scenario in
Punjab, agro food parks are being developed in the
state to enable small- and medium-scale units to attain
viability by defraying cost of major facilities such as
cold storage, ware-housing facilities, etc. Currently, 3
mega food parks have been approved by MoFPI in the
state, which are being implemented by International
Mega Food Park Limited in Fazilka, The Sukhjit Starch
& Chemicals Limited in Kapurthala and Punjab Agro
Industries Corporation in Ludhiana.
Major food items produced in the state include wheat,
rice and milk, among others.The value-added products
derived from these resources exhibit bigger and better
market opportunities for upcoming industrial players.
Table 3‑9: Gujarat - Opportunities in Food Processing
S.
No.
Food
Produce
Production (Million
Tonnes), 2012-13
1 Milk 10.3
Products (Chocolates, Biscuit Creams), Milk-based sweets(RTE Gulab Jamuns)
2 Banana 4.5 Juice, Chips, Puree, RTS juice, Jam, Jelly, Wine, Banana Cheese, Flour, etc
3 Mango 1.0
4 Papaya 1.2 Juice, jelly, Confectionary Products (Candies, Chocolates, Biscuit Creams)
Figure 3‑10
Punjab - Agriculture and Allied Products
Grains
Milk Meat &
Fishes
2011-12 2012-13
1.4
3.7
28.4
9.6
0.3 0.3
1.5
3.9
28.5
9.7

Table 3‑10: Punjab - Opportunities in Food Processing
S. No.
Food
Produce
Production (Million
Tonnes), 2012-13
1 Wheat 16.6
2 Rice 11.4
3 Milk 9.7
Products (Chocolates, Biscuit Creams), Milk-based sweets(RTE Gulab Jamuns)
5
Total
Citrus
1.0
Juice, Jam, Jellies, Squash, Candies, Pulp, Confectionary Products (Candies,
Chocolates, Biscuit Creams)

Investment in Infrastructure
Inadequate infrastructure acts as the biggest hindrance
to the Indian food processing industry and has been
affecting its growth since past several years. Bad road
conditions; poor connectivity; inadequate air and sea
port capacities; and lack of development of modes
of transports, like railways, and alternates, like inland
water transport and domestic aviation, have been
causing delays in the food processing operations.
Due to this, costs per transaction in the Indian food
processing sector increases and ultimately leads to
increase in prices.Therefore, there is an urgent need for
entirely new logistic networks, linking roads, railways,
airports, and warehouses, cold chain storage to curtail
the post-harvest losses, particularly of perishables,
testing laboratories, food parks, etc. and new electricity
grids to power them. The Indian government, by
collaborating with leading Indian engineering and
consulting companies through a public-private
partnership model (PPP), should develop world class
infrastructure in the untapped areas of the country.This
will not only benefit the food processing industry but
will also result into the development of the particular
areas.
Re-engineer Mega Food Parks Scheme
The Ministry of Food Processing Industries had
launched‘The Mega Food Parks Scheme’(MFPS) under
the 11th Five Year Plan and was implemented in 2008.
Since its inception, 42 mega parks were given in-
principle approvals. However, only five projects have
started operations, including the North East Mega Food
Recommendations to Stimulate Growth4
Park in Assam; India Food Park in Tumkur, Karnataka;
International Mega Food Park in Fazilka, Punjab; Srini
Food Park in Chittoor, Andhra Pradesh; and Patanjali
Food and Herbal Park in Uttarakhand. The remaining
37 projects are either still lined up for final approval or
got cancelled due to several reasons. The government
should take effective measures to reengineer MFPS
scheme and allow speedy approvals to achieve the
objective of MFPS scheme. Also, there should be a
relaxation on the eligibility criteria of a minimum land
of 50 acres.
Investment in Training and Skill
Development
The government has been constantly making efforts
to develop skills among rural and urban population.
However, with a lot of development happening in
the food processing sector, emerging skill shortages
between the demand and supply of specific skills
can potentially obstruct the competitiveness of the
industry. If this trend continues, the SMEs would
be badly affected as the investment in training and

human resource development is minimal at their
level. The number of institutes providing proper
training suitable to the industry is also not adequate.
There is a strong need for government intervention to
establish institutions that provide skill development
training and expertise in food processing sector. The
government support in terms of subsidies or incentives
can also solve the problem of shortage of skill set to
some extent.
Easy Availability of Credit
The unavailability of credit is one of the major
bottlenecks of the Indian food processing industry,
however the government has taken several initiatives/
schemes in this regard, but still there exists some
loopholes. The government/RBI should come up with
a scheme for the small farmers or industry players
with less documentation and timely approvals of the
loans. They should also relax the eligibility criteria
for granting of loans. Since, food processing is a sub
category of agriculture; the rate of interest charged by
the banks should also be similar to that of agriculture
(around 7%). Also, the term of loan should be extended
to 15 years.
Additionally, the credit assistance scheme provided by
the NABARD needs to relax its collateral requirement
from the borrowers as it is even higher than that of
commercial banks’requirement. FPI units would hardly
get benefited from this policy. Additionally, NABARD
provide credit assistance only to the 148 designated
food parks, it should broaden its eligibility criteria
and should provide assistance to the privately and
government owned food parks as well.
Consistent State and Central Policy
There exist a lot of inconsistencies and inefficiencies
in the Indian food processing industry as there is an
involvement of multiple ministries and administering
authorities at both the central and state level. Different
states have different policies and taxes which lead to
complex structure and ultimately affect the growth of
the industry.There should be a consistency in state and
central policies or same policies for all states as well as
the relaxation of state barriers.
Effective Implementation of GST
Implementation of GST is expected to significantly
stimulate the Indian food processing industry in the
coming future. The GST, intended from April 1, 2016,
would amalgamate India’s multi-layered indirect tax
system into a single unified system, unleashing India
from its bureaucratic web and improving the ease of
doing business. This will lead to a notable reduction in
transportation costs for the food processing industry
players as they will not have to pay central sales tax at
2% of sales. Also, firms that have established their own
warehouses will get benefitted from lower logistics
costs resulting in the shutdown/consolidation of some
warehouses.This will ultimately result into reduction of
final prices.

Establishment of Semi-Food Processing
Industry Units
To meet the domestic as well international demand for
processed food products, government should establish
semi processing units near agriculture produced area.
Also, small size food parks can be developed at various
center points of districts areas with the facilities of
packaging, semi processing, advanced equipments
and machineries. This will not only reduce the time
to transport agricultural produce from farm to the
processingunitbutitwillalsocondensethecostoffood
processing and wastage of agricultural production and
ultimately stabilizes the prices.
Growth of MSME Units
Government has been very supportive towards
the development of MSME sector by giving special
incentives and subsidies. Various incentives like capital
assistance, bank loans, plant & machinery, among
others. Few special incentives and relaxations such
as procurement of raw materials at subsidized rates,
entrepreneur training to the rural entrepreneurs will
give further push to the industry. A venture capital
fund should also be established by the MoFPI in order
to boost production capacity of the MSME sector.
Encourage Contract Farming
The food processing industry in India involves a long
and time-consuming supply chain which results
into wastage of agricultural production. The idea of
contract farming can eliminate the problem of wastage
and can enhance the production of processed foods.
By contract farming, companies can create direct
farm linkages to get appropriate quality, quantity and
varieties of inputs from farmers by supporting them
throughout the production process, land preparation
and technical advice. In this way, both the parties in
the contract are better off. Farmers have a guaranteed
market outlet, mitigated uncertainty regarding prices,
supplied with loans in kind, through the provision of
farming inputs such as seeds and fertilizers. Companies
benefit from having a guaranteed supply of agricultural
products that meet their specifications regarding
quality, quantity and timing of delivery.
Promoting Cluster-Based Agricultural
Practices
Cluster Farming aims at real profit by merging several
smallholder farms into a solid entrepreneurial group,
which is known as a cluster. The small farms cultivate
specific food grains, vegetables, fruits and other

horticulture crops as a consolidated production. This
agricultural practice can improve agricultural growth
rate as well as farm income. Therefore government
should rigorously promote cluster based agricultural
practice especially in those areas where there is less
farm mechanization.
Development of Organic Agriculture
The Indian organic agriculture is highly fragmented
and there is no proper organization or a body for
managing its value chain. Additionally, there is an
absenceofpropermarketinganddistributionnetworks
both in the domestic as well as export market. The
Indian government has taken limited initiatives for the
growth of organic agriculture in the country. There is
a scope for government support in terms of subsidies
or incentives for the growth and promotion of organic
agriculture.
Additionally, lack of organic market awareness is
the biggest roadblock for Indian organic agriculture
industry. The farmers, as well as the end consumers,
do not have proper information about organic farming
and products. Government should conduct awareness
programmes in rural as well as in urban areas to make
farmers as well as end consumers aware about the
organic agriculture, also steps should be taken to
motivate larger section of farming community to opt
for organic farming.
Research & Development
In the phase of innovation and development,
companies must emphasize on investing in research
and development to keep updated with current trends
in technology and development of the product. The
target customer has become excessively particular in
demand and a price comes secondary to the benefits
associated with the product. Therefore, continuous
research on defining new product lines and
restructuring the existing offerings is crucial to match
the changing needs of the consumers.
Focus on Nutritional Products
The food processing industry players should adopt
new methods of processing that ensures nutrient
value of any food remains unaltered while processing.
The industry should focus on processing products that
are rich in vitamins and minerals and that have long life
span as well.The processing of nutritional products will
curb the problem of malnutrition in the country.

ASSOCHAM
THE KNOWLEDGE ARCHITECT OF CORPORATE INDIA
Evolution of Value Creator
ASSOCHAM initiated its endeavour of value creation for Indian industry in 1920. Having in its fold more
than 400 Chambers and Trade Associations, and serving more than 4,50,000 members from all over India.
It has witnessed upswings as well as upheavals of Indian Economy, and contributed significantly by playing
a catalytic role in shaping up the Trade, Commerce and Industrial environment of the country.
Today, ASSOCHAM has emerged as the fountainhead of Knowledge for Indian industry, which is all set to
redefine the dynamics of growth and development in the technology driven cyber age of ‘Knowledge Based
Economy’.
ASSOCHAM is seen as a forceful, proactive, forward looking institution equipping itself to meet the
aspirations of corporate India in the new world of business. ASSOCHAM is working towards creating a
conducive environment of India business to compete globally.
ASSOCHAM derives its strength from its Promoter Chambers and other Industry/Regional Chambers/
Associations spread all over the country.
Vision
Empower Indian enterprise by inculcating knowledge that will be the catalyst of growth in the barrierless
technology driven global market and help them upscale, align and emerge as formidable player in respective
business segments.
Mission
As a representative organ of Corporate India, ASSOCHAM articulates the genuine, legitimate needs and
interests of its members. Its mission is to impact the policy and legislative environment so as to foster
balanced economic, industrial and social development. We believe education, IT, BT, Health, Corporate
Social responsibility and environment to be the critical success factors.
Members – Our Strength
ASSOCHAM represents the interests of more than 4,50,000 direct and indirect members across the
country. Through its heterogeneous membership, ASSOCHAM combines the entrepreneurial spirit and
business acumen of owners with management skills and expertise of professionals to set itself apart as a
Chamber with a difference.
Currently, ASSOCHAM has more than 100 National Councils covering the entire gamut of economic
activities in India. It has been especially acknowledged as a significant voice of Indian industry in the field
of Corporate Social Responsibility, Environment & Safety, HR & Labour Affairs, Corporate Governance,
Information Technology, Biotechnology, Telecom, Banking & Finance, Company Law, Corporate Finance,
Economic and International Affairs, Mergers & Acquisitions, Tourism, Civil Aviation, Infrastructure, Energy
& Power, Education, Legal Reforms, Real Estate and Rural Development, Competency Building & Skill
Development to mention a few.

Insight into ‘New Business Models’
ASSOCHAM has been a significant contributory factor in the emergence of new-age Indian Corporates,
characterized by a new mindset and global ambition for dominating the international business. The
Chamber has addressed itself to the key areas like India as Investment Destination, Achieving International
Competitiveness, Promoting International Trade, Corporate Strategies for Enhancing Stakeholders Value,
Government Policies in sustaining India’s Development, Infrastructure Development for enhancing India’s
Competitiveness, Building Indian MNCs, Role of Financial Sector the Catalyst for India’s Transformation.
ASSOCHAM derives its strengths from the following Promoter Chambers: Bombay Chamber of Commerce
& Industry, Mumbai; Cochin Chambers of Commerce & Industry, Cochin: Indian Merchant’s Chamber,
Mumbai; The Madras Chamber of Commerce and Industry, Chennai; PHD Chamber of Commerce and
Industry, New Delhi.
Together, we can make a significant difference to the burden that our nation carries and bring in a bright,
new tomorrow for our nation.
The Associated Chambers of Commerce and Industry of India
ASSOCHAM Corporate Office:
5, Sardar Patel Marg, Chanakyapuri, New Delhi-110 021
Tel: 011-46550555 (Hunting Line) • Fax: 011-23017008, 23017009
Email: assocham@nic.in • Website: www.assocham.org

5, Sardar Patel Marg, Chanakyapuri, New Delhi - 110 021
Phone: +91-11-46550555 (Hunting Line) • Fax: +91-11-23017008, 23017009
E-mail: assocham@nic.in • Website: www.assocham.org
ASSOCHAM REGIONAL OFFICES
ASSOCHAM Southern Regional Office
D-13, D-14, D Block, Brigade MM,
1st Floor, 7th Block, Jayanagar,
K R Road, Bangalore-560070
Phone: 080-40943251-53
Fax: 080-41256629
Email: events@assocham.com
events.south@assocham.com,
director.south@assocham.com
ASSOCHAM Western Regional Office
608, 6th Floor, SAKAR III
Opposite Old High Court, Income Tax
Ahmedabad-380 014 (Gujarat)
Phone: +91-79-2754 1728/ 29, 2754 1867
Fax: +91-79-30006352
E-mail: assocham.ahd1@assocham.com
assocham.ahd2@assocham.com
ASSOCHAM Eastern Regional Office
BB-113, Rajdanga Main Road
Kolkata-700107
Phone: 91-33-4005 3845/41
Fax: 91-33-4000 1149
E-mail: debmalya.banerjee@assocham.com
ASSOCHAM Regional Office Ranchi
503/D, Mandir Marg-C,
Ashok Nagar,
Ranchi-834 002
Phone: 09835040255, 06512242443 (Telefax)
E-mail: Head.RORanchi@assocham.com
ASSOCHAM CORPORATE OFFICE
The Associated Chambers of Commerce and Industry of India
ASSOCHAM OVERSEAS OFFICES

A - 142, Second Floor,
Sector 63, Noida - 201301, INDIA
 : +91 - 120 - 4224700/ 01/ 02/ 03, Ext: 203/ 208
 : +91 - 120 - 4224707
: marketing@rncos.com
: www.rncos.com
5, Sardar Patel Marg, Chanakyapuri, New Delhi-110 021
 : 011-46550555 (Hunting Line)
 : 011-23017008, 23017009
: assocham@nic.in
: www.assocham.org

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