• Kovllp Consulting

Processed Foods- A booming sector for SMEs

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. It lies at the heart of the Govt. of India’s Make in India initiative and resonates with Prime Minister’s call for Vocal for Local. India’s food sector attracted $4.18 billion in FDI from April 2014-March 2020. India is one of the largest producers of a range of agricultural products and as the global population grows, demand for made in India food is ever rising. The acceptability of Indian horticulture products is rising due to concurrent developments in the areas of state-of-the-art cold chain infrastructure and quality assurance measures. Currently, India is processing less than 10% of its agricultural output, thus presenting immense opportunities for increasing these processing levels and leading to investments in this sector.

The emergence of retail food chains, the acceptance of packaged food and the emergence of the food courts in the urban India has contributed greatly to the food processing unit of the SMEs. The food processing industry under the SMEs flourished with the introduction of the food packaging technology and the improvement of the storage facilities in the cold storage units in the Indian market.

  • Included cold chain setup, food first-class control and trying out labs, dry warehousing, fruit pulp and concentrates, modernization of foods and oilseed milling, food flavors, components and coloring, milk and poultry processing has led to the entry of large overseas gamers who are eyeing Indian MSMEs with technology switch and putting in captive gadgets in India.

  • Recurring grants in resource ranging from Rs.10 lakhs to 50 lakhs is supplied for MSMEs by the government in trying to set-up vegetation in food processing.

  • Indian food processing market is export oriented because of unique geography and ethnicity of products. The demand for Indian food products has surged in the international market thereby opening a demand gap in the market for the new entrants to take up.

  • Dehydrated Vegetables, Cold storage, canned sweets have a huge demand in the international market and government has invited many aspiring entrepreneurs to take up the opportunity.

  • With huge land space, and having geographic advantage, India has the ability to set up many numerous storage facilities and warehouses which can contain and store processed foods for a longer duration.

  • Power atta chakki, besan, petha, Jam, jelly, murabba are few of the many new initiatives taken by Indian government as new projects under food processing industry where new entrants and SMEs are to set business up as these products have a domestic and international market demand.

  • Technological advance in terms of manufacturing or storage is an upcoming area where lots of opportunities for many small enterprises have come up in the recent past. With the dependency increasing on more processed foods these research areas will witness a huge boom in the future.

Specific loans and government initiatives in terms of finance have been deployed to encourage more entries of SMEs into the sector. Recent global lockdown has ignited the want for processed food more and suggests a growth in the future.

New initiatives like a planned infrastructure spend of around INR 100 lakh crore (around $1 trillion) and INR 25 lakh crore to boost the rural economy have put the food processing sector on a high growth trajectory.

The Pradhan Mantri Kisan Sampada Yojna is a comprehensive package which shall create modern infrastructure with efficient supply chain management from farm to retail outlet. More recently, boosting Prime Minister Modi’s Atmanirbhar Bharat vision, the scheme of Formalization of Micro Food Processing Enterprises (FME) is being rolled out with an outlay of INR 10,000crore. MSMEs in India have an excellent capacity to grow and make a contribution to the Indian financial system.

Long term partnerships with Indian MSMEs having suitable technical capabilities couldn’t simplest offer a low price advantage however additionally a source of “economic innovation” for organizations worldwide. An ecosystem with MSMEs will be a source of world aggressive advantage for the organizations investing in India.

16 views0 comments

Recent Posts

See All

The SMEs play an important role in terms of creating employment, increasing manufacturing and contributing to GDP. The main purpose of the SMEs is to engage with the future generation and to promote t