Food Processing Industry reforms in India

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Context

The Prime Minister, in his message at World Food India 2024, praised India’s progress in building a strong food processing ecosystem(FPI) over the last decade.

World Food India 2024

This year World Food India 2024 was organised from 19th to 22nd September 2024. This is the third edition of the event.

The theme for 2024 is “the right to food for a better life and a better future.” This is based on the fact that the world's farmers produce enough food to feed more than the global population but hunger is still an issue for many.

First Edition

With the objective of introducing the world to rich Indian food culture as well as promoting investments in the diverse food processing sector of the country, the Ministry of Food Processing Industries launched the first edition of World Food India in 2017.

Second Edition

In view of celebrating 2023 as the International Year of Millets and bringing the global food processing industry together, the Ministry of Food Processing Industries organized the second edition of World Food India in 2023.

Status of FPI in India

The food processing industry in India is a sunrise sector that has gained prominence in recent years. This sector serves as a vital link between the agriculture and industrial segments of the economy. During the last seven years ending 2021-22, the FP sector has been growing at an Average Annual Growth Rate (AAGR) of around 7.26%.

Gross Value Added (GVA) in the FP sector has also increased from 1.30 lakh crore in 2013-14 to 2.08 lakh crore in 2021-22.

As per NSSO 2015 report, the industry has a share of 13% in the employment generation in all Registered Factory sectors and employs approximately 2.03 million people. The unregistered food processing sector provides employment to 5.1 million workers which constitutes 14.18% of employment in the unregistered manufacturing sector.

The market size of the food processing sector in India is poised to reach US$ 1,274 billion in 2027 from US$ 866 billion in 2022 as per the Economic Survey of India reports 2023-24. 

Food Processing Industry Reforms in India

100% FDI in food processing

100% Foreign Direct Investment (FDI) permitted through automatic route for the food processing sector subject to sectoral regulations.  100% Foreign Direct Investment, under Government approval route, for trading including through e-commerce, in respect of food products manufactured or produced in India.

Pradhan Mantri Kisan Sampada Yojana

The Pradhan Mantri Kisan Sampada Yojana (PMKSY) is a scheme implemented by the Ministry of Food Processing Industries (MoFPI) to create modern infrastructure and efficient supply chain management for the food processing sector in India.

The scheme's objectives include Better prices for farmers, Employment opportunities, Reduced agricultural waste, Increased processing levels, and Enhanced exports. The scheme provides financial assistance in the form of grants-in-aid or subsidies for setting up food processing projects.

Some of the components of the scheme include Mega Food Parks, Integrated Cold Chain and Value Addition Infrastructure, Creation of Infrastructure for Agro Processing Clusters, Creation/Expansion of Food Processing and Preservation Capacities, and Operation Greens.

Formalisation of Micro Food Processing Enterprises

The Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme is a program that helps micro food processing enterprises in India become more competitive and formal.

The scheme was launched in June 2020 by the Ministry of Food Processing Industries (MoFPI) in partnership with state and union territory governments.

Production Linked Incentive Scheme for food-processing industries

The Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) is a Government of India (GOI) initiative to support the growth of the food processing sector.

The scheme was approved by the Cabinet on March 31, 2021 and is being implemented from 2021-2022 to 2026-2027. The scheme's objectives include:

• Supporting the creation of global food manufacturing champions
• Promoting Indian food brands in international markets
• Increasing employment opportunities
• Ensuring remunerative prices for farm produce
• Increasing farmers' income
• Reducing food wastage
• Boosting agricultural productivity

The Mega Food Park (MFP) scheme

The Mega Food Park Scheme (MFPS) is a government initiative to boost modern food processing infrastructure in India. It offers financial aid of up to Rs. 50 crore per mega food park (MFP) to a group of companies.

Important articles for reference

World Food India 2024

Food processing sector in India

Sources

https://ddnews.gov.in/en/pm-modi-highlights-decade-of-reforms-transforming-indias-food-processing-sector/#:~:text=Key%20reforms%20such%20as%20100,strengthening%20the%20food%20processing%20sector.

https://indianexpress.com/article/india/world-food-india-2024-pm-modi-wide-ranging-reforms-undertaken-in-food-processing-sector-in-last-10-years-9577770/#:~:text=Through%20multidimensional%20initiatives%20such%20as,infrastructure%2C%20robust%20supply%20chains%20and

https://translate.google.com/translate?u=https://www.mofpi.gov.in/Schemes/about-pmksy-scheme&hl=hi&sl=en&tl=hi&client=sge&prev=search#:~:text=Government%20of%20India%20had%20approved,the%2014th%20Finance%20Commission%20cycle.

https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2003092#:~:text=Food%20Processing%20(FP)%20sector%20emerged,AAGR)%20of%20around%207.26%25.