Lack of skilled manpower and infrastructure emerges as key challenges hampering the growth of Indian food processing industry, finds PHD Chamber – Grant Thornton report

The lack of cold chain infrastructure, certified labs and inadequate skill sets at different levels in food processing industry are among the key issues hampering the growth of the industry in India, according to a PHD Chamber – Grant Thornton report - India Farm 2 Fork 2015 – Making India Globally Competitive - launched at PHD Chamber’s 3rd international conference and exhibition India Farm 2 Fork 2015 today. The other issues faced by the industry are lack of innovation and access to credit and inadequate branding & marketing.

Indian food processing industry is pegged at between US$121 Billion to US$130 Billion. However, the extent of processing is relatively low particularly in fruits, vegetables, poultry, meat and fishery. Compared to other Asian markets, food processing levels in India are a mere 6 percent in overall terms as against 40 percent in China. Hence, value accruals to farm and enterprise stakeholders within the country are also relatively poor.

“Sustainable Development Goals 2030 have put food security, nutrition and sustainable agriculture at the centre of global policy initiatives. Food processing provides the all-important link between these goals. The country is witnessing promising growth in the sector as a result of enterprising private sector and proactive Government. One of the key recommendations to enhance India’s global competitiveness in the sector is transforming natural food processing agglomerations into regions of specialization,” said Kunal Sood, Partner, Grant Thornton India LLP.

The report suggests that e-commerce presents a great opportunity for the growth of the food processing industry in India. The organised food business in India is worth US$ 48 billion, of which food delivery is valued at US$ 15 billion. With online food delivery players like FoodPanda, Zomato, TinyOwl and Swiggy building scale through partnerships, the organised food business has a huge potential and a promising future. Government’s ambitious Make in India program also encourages the development of food processing through relaxed FDI norms, ease of doing business, grant assistance to the project etc. Government of India are encouraging policy initiatives which supports user based model and assist in expansion of natural organic agglomeration of food processing units shall be encouraged.

The study recommends the government to grant in-aid assistance for establishing institutions with common facilities for the development of joint technology upgrading projects or for establishment of value chain gap filling technical infrastructure facilities and establishing or upgrading physical infrastructure in PPP mode in the existing specialized enterprise agglomerations.