Level of food processing must be raised from just 10% now: Minister

India’s food processing sector is one of the largest in the world and its output is expected to reach $535 billion by 2025-26, the minister said

Food Processing Minister Pashupati Kumar Paras on Friday stressed on increasing the level of processing in India from the current 10 per cent so as to boost farmers' income.

Addressing a virtual conference organized by industry body Assocham, the minister highlighted that the food processing industry has always been the "engine of growth for the Indian economy".

"India’s food processing sector is one of the largest in the world and its output is expected to reach $535 billion by 2025-26," Paras said.

The food processing sector contributes 12.8 per cent to the Indian GDP and provides, directly and indirectly, huge employment, he added.

Pointing out that India’s current overall level of food processing is just 10 per cent, Paras said the processing level needs to be increased to capture market opportunities and improve income for farmers.

The minister highlighted that the government in the last seven years has taken several measures to boost processing level and grow this sector.

Under PMKSY (Pradhan Mantri Kisan Sampada Yojna), he mentioned that 42 Mega Food Parks, 353 Cold Chain projects, 63 Agro-Processing Clusters, 292 Food Processing Units, 62 Creation of Backward & Forward Linkages Projects and 6 Operation Green projects across the country have been approved.

The minister said food processing has an important role to play in linking Indian farmers to consumers in the domestic and international markets.

Highlighting the importance of this sector, Paras said the Indian food and grocery market is the world’s sixth-largest, with retail contributing 70 per cent of the sales.

The food processing industry accounts for 32 per cent of the country’s total food market and is ranked fifth in terms of production, consumption, export, and expected growth, he added.

"The production of horticulture crops in India was estimated at a record 320.48 million tonne in FY20 as per second advance estimates. India has the largest livestock population of around 535.78 million, which translates to around 31 per cent of the world population," Paras said.

The ministry is making all efforts to encourage investments across the value chain, he said.

The food processing sector in India has received around USD 7.54 billion worth of FDI during the period April 2000-March 2017.

Paras pointed out that the food processing industry faced various challenges during the pandemic such as shortage of labour, supply chain gaps due to lockdowns.

Factories were shut down, and there were huge losses of material, he added.

However, the minister said the pandemic has accentuated the critical importance of food safety and the management of food surpluses in the country.

Accordingly, he said, the sector's policy measures have shifted the focus from livelihood to processing, distribution, and marketing.

Anil Rajput, Chairmam, FMCG council Assocham and Himanshu Priyadarshi, Senior Member, Assocham & Director Public, Policy & Government Affairs, PepsiCo, took part in the virtual event.