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Press Release

Grant Thornton Bharat report highlights the need for India’s food processing sector to quadruple to 7.2% of the GVA for a Viksit Bharat

The report unveils a strategic 3-I model for revolutionising India’s food processing sector.

India's food processing sector is one of the most substantial globally and serves as a crucial link between Indian farmers and domestic and international consumer markets. According to the ‘Vikasit Bharat by 2047: Role of the Food Processing Sector’ report by Grant Thornton Bharat, the sector’s contribution to India’s Gross Value Added (GVA) needs to quadruple to 7.2%, which currently stands at 1.8% of the total GVA, to become a developed nation by 2047. Future strategies must be aligned to achieve the target of 10.4% CAGR by 2047.

According to the report, the food processing industry faces many challenges, from food safety and sustainability to labour shortages. India has a large agricultural sector but is fragmented and underdeveloped. This leads to problems such as a lack of storage facilities, poor transportation infrastructure and high levels of wastage. Deficiencies in the supply chain infrastructure can lead to inadequate primary processing, storage, and distribution facilities.

Introducing a thorough framework to aid the growth of this sector, Chirag Jain, Partner, Grant Thornton Bharat said, "The 3-I Model (Innovation through Technology, Infrastructure Development, and Investment Convergence) emerges as a strategic framework for the evolution of the food processing sector. Leveraging digitalisation and technology adoption, particularly through IoT, AI, and blockchain, offers a pathway to efficiency and cost reduction. Robust infrastructure development, encompassing primary processing at the farm level and a well-integrated cold chain, is pivotal. As the government propels this vision forward through schemes like the Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) and others, the 3-I Model stands to revolutionise India's food processing landscape."

Naveen Malpani, Partner- Consumer Industry, Grant Thornton Bharat said, “India’s food processing industry, no longer in its infancy, holds the potential for a transformation that reduces waste, adds value, and fuels economic growth. Government policies and support are pivotal, yet investment in infrastructure and innovation is needed to unlock its full potential. By 2047, the goal is to boost its GVA contribution and establish India as a global leader in processed food exports, underlining its integral role in shaping India’s economic future.”

Key highlights of the report:

  • Significant investments are needed in rural infrastructure such as grading and packing centres, storage facilities, transportation, and testing laboratories
  • Increasing agricultural output without investing in processing facilities can harm farmers’ earnings and cause rural distress
  • Developing strong supply chains that connect farmers to processing and marketing is crucial.
  • There is a need to strengthen primary processing at the farm level, including sorting/grading, packaging, drying, etc., while focusing on improved levels of value-addition
  • An integrated cold chain can be an industry driver that can transform India’s rural economy

With ongoing investments, the food and processing sector is pivotal in propelling India toward its national vision of becoming a developed and empowered country by 2047.

The press release was issued on 25th January, 2024.