46.Food Industry

The Indian food market, according to the 'India Food Report 2008' by Research and Markets is estimated at over US$ 182 billion, and accounts for about two thirds of the total Indian retail market. Further, according to consultancy firm McKinsey & Co., the retail food sector in India is likely to grow from around US$ 70 billion in 2008 to US$ 150 billion by 2025, accounting for a large chunk of the world food industry, which would grow to US$ 400 billion from US$ 175 billion by 2025.

The growth of the food industry in India stems from the consistently increasing agricultural output. With the second largest arable and area in the world, India is one of the key food producing countries in the world, second only to China. In fact, the year 2008 has been a record year for India’s food grain sector with increased production, acreage under cultivation and record procurements.

Further, according to an Economic Times analysis, one out of every five listed companies in India confirmed higher profits during the first half of fiscal 2008–09, with farm inputs and farm machinery companies achieving the biggest profits. According to Mr Subodh Kant Sahai, the Union Minister of State for MFPI, the food processing industry in India was seeing growth even as the world was facing economic recession.

According to the minister, the industry is presently growing at 14 per cent against 6–7 per cent growth in 2003–04. Foreign direct investments (FDI) totalling US$ 143.80 million was put into the food processing industry in 2007–08 against US$ 5.70 million in the previous fiscal. The food processing industry provides crucial connections between industry and agriculture. To aid the growth of the food processing industry, the government has implemented schemes including the setting up food parks, packaging centres, integrated cold chain facilities, value-added centres, and modern abattoirs.