Why is it in the news?
Recently, speaking at an event, MoS of Ministry of Food Processing Industries have stated that India’s food processing sector is expected to create 9 million jobs by 2024.
More about the news
- By 2030, India’s household consumption in the food and food technology sector is projected to quadruple, making it the world’s fifth-largest consumer.
- The sector has attracted $4.18 billion in foreign direct investments (2014-2020) and is poised for significant growth.
- It contributes 13% to India’s exports and 6% to industrial investment.
- The Indian gourmet food sector maintains an impressive 20% Compound Annual Growth Rate (CAGR) with a market size of $1.3 billion.
- The food processing sector aims to increase its GDP contribution from 8% to 20% by 2030.
- Government schemes like Pradhan Mantri Kisan SAMPADA Yojana (PMKSY), Pradhan Mantri Micro Food Processing Enterprises (PMFME), and the Production Linked Incentive (PLI) Scheme have helped the industry meet global quality and safety standards.
- The government has allocated ₹4,600 crore to sustain PMKSY, with an additional ₹920 crore allocation reaffirming its commitment to sector growth.
- MSMEs (Micro, Small & Medium Enterprises) contribute significantly to the Indian economy, accounting for over 30% of GDP, nearly 50% of exports, and 45% of industrial output.
About Food Processing Sector
- Food processing is a type of manufacturing in which raw materials are processed into intermediate foods or edible items using scientific knowledge and technology.
- Bulky, perishable, and occasionally inedible food resources are converted into more usable, concentrated, shelf-stable, and pleasant meals or beverages using a variety of techniques.
- It improves the storability, portability, palatability, and convenience of the finished product.
Various Policy Measures taken by Government
- In April 2015, the government included food and agro-based processing units and cold chains as agricultural activities under Priority Sector Lending (PSL) norms.
- The Food Safety and Standards Authority of India (FSSAI) shifted from product-specific approval to an ingredient and additive-based approval process in 2016, streamlining regulations.
- The food processing sector allows 100% Foreign Direct Investment (FDI) under the automatic route.
- A Special Food Processing Fund of Rs. 2000 crore was established in collaboration with the National Bank for Agriculture and Rural Development (NABARD) to provide affordable credit for investments in setting up Mega Food Parks (MFP) and processing units within them.
- In 2019, the fund’s coverage was extended to the establishment of Agro-Processing Clusters and individual manufacturing units.
- A Designated Food Parks (DFPs) scheme is set to be introduced in various states to facilitate access to affordable credit from special funds with NABARD.