India has a significant scope for improvement in productivity for food processing industry: Deloitte
The Food Processing Industry (FPI) is the fifth-largest industry in India in terms of production, consumption, and exports. Compared with other developed economies, the ratio of food retail sales to GDP from agriculture in India is relatively low, signifying an opportunity to scale up the food processing industry.
We Now spoke to Anand Ramanathan, Partner, Deloitte India about the food processing industry and growth in India. He started by saying that Food processing is India is much lower than the world and even compared to the Asian Countries food processing in India is 10% of all the products that get grown. He further added that looking at the current scenario there is a huge growth opportunity for India in the food processing industry. The growth will be led by demand in retail and also the need for convivence & safe food. Currently, the size of the Indian FPI is currently 1.5x that of the agricultural industry while in the developed countries it’s around 4-5x which shows the growth opportunity for India in the sector.
Talking Covid-19 and its role in pushing rural demand he said that it has put back the focus on agriculture. He further added that the focus which is come in from the government and the size of the consumption market in rural areas is where the big difference was made in the food processing industry. Another area which Covid-19 opened up was focus away from cereals to proteins and fresh produces. There has been a boost in demand for horticulture due to Covid-19.
There have been a lot of policies in the recent times like modification in APMC Act, strengthening farm gate infrastructure, etc he said that this is just the beginning and the main challenge is on implementation front where translating the policies changes at the central government into actions at the local level
Currently, the Indian food processing industry is dominated by MSMEs, he believes that what will help the MSME sector in FPI will be if states have a crop value chain and then focus on providing both funding and capability building. He further added that technology will also play an important for MSME and the sector.
Source : timesnownews