The Indian food processing industry is one of the largest industries in India and ranks fifth in terms of production, consumption and exports. With an estimated value of US$ 181 billion in 2013, the food processing sector is expected to continue to grow at 10% per annum over the next few years.
This growth has been encouraged by the Indian Government’s strong policy support including the exemption of export earnings from corporate taxes, 100 per cent foreign direct investment (FDI) under automatic route, the opening up of mega food parks, the assignment of Agri Export Zones and incentives for the development of storage facilities.
Over the next ten years the Indian food processing industry holds tremendous potential to grow, considering the still nascent levels of processing at present. Though India’s agricultural
production base is reasonably strong, wastage of agricultural produce is sizeable. Processing of fruits and vegetables is a low 2%, around 35% in milk, 21% in meat and 6% in poultry products. By international comparison, these levels are significantly low – processing of agriculture produce is around 40% in China, 30% in Thailand, 70% in Brazil, 78% in the Philippines and 80% in Malaysia. Value addition to agriculture produce in India is just 20% and wastage is estimated to be valued at around US$ 13 bn (Rs 580 bn).
It is little wonder then that European flexible packaging converters are looking to India for opportunities to grow their business e.g. Huhtamaki, Amcor and Constantia. Flexible packaging already plays a major role in protecting food stuffs throughout the distribution chain in India but it is destined to play an even larger role as packaged food sales continue to expand. Growing urbanization, increasing disposable incomes, the emergence of an organised food retailing sector, changing lifestyles and food consumption patterns are some of the key factors driving this growth.
It is probably too late to ride the wave of consumption growth in China, but India’s food packaging revolution is only now beginning to emerge, so no time like the present!