The Food Processing Industries have emerged as a crucial pillar of the Indian economy, making significant contributions to GDP, employment, and exports. Over the past eight years ending in 2022-23, the sector has experienced robust growth, with an Average Annual Growth Rate (AAGR) of approximately 5.35%. This growth trajectory underscores the sector’s vital role in India’s economic development.

Growth in Gross Value Added (GVA)

The Gross Value Added (GVA) in the food processing sector has seen a notable increase, rising from US$ 19.22 billion (Rs. 1.61 lakh crore) in 2015-16 to US$ 22.92 billion (Rs. 1.92 lakh crore) in 2022-23. This data, reported by the Ministry of Statistics and Programme Implementation, highlights the sector’s expanding economic footprint.

Rising Employment Opportunities

Employment within the food processing industry has also surged, growing from 17.73 lakh in 2014-15 to 20.68 lakh in 2021-22, according to the Annual Survey of Industries (ASI). This increase in employment reflects the sector’s capacity to generate jobs and support livelihoods across the country.

Boost in Processed Food Exports

The share of processed food exports in agri-food exports has grown significantly, climbing from 13.7% in 2014-15 to 23.4% in 2023-24. This growth demonstrates the sector’s enhanced competitiveness and its ability to capture a larger share of the global market.

Key Schemes Driving Growth

To sustain and accelerate this growth, the Ministry of Food Processing Industries (MoFPI) is implementing several key schemes designed to address the sector’s challenges and promote its development. These initiatives include:

Pradhan Mantri Kisan SAMPADA Yojana (PMKSY): A flagship scheme aimed at creating modern infrastructure and promoting investment in the food processing sector. As of June 30th, 2024, MoFPI has approved numerous projects under PMKSY, including 41 Mega Food Parks and 399 Cold Chain projects. These projects are instrumental in reducing post-harvest losses, ensuring value addition, and enhancing the income of farmers.

Production Linked Incentive Scheme for Food Processing Industry (PLISFPI): This scheme, with a total outlay of US$ 1.30 billion (Rs. 10,900 crore), aims to create global food manufacturing champions and support Indian food brands internationally. As of June 30th, 2024, 172 companies have received approval for assistance under this scheme, positioning them to compete effectively in the global market.

PM Formalization of Micro Food Processing Enterprises (PMFME) Scheme: With an outlay of US$ 1.19 billion (Rs. 10,000 crore), this scheme supports micro food processing enterprises by providing financial assistance and promoting formalization. As of June 30th, 2024, assistance has been approved for 92,549 micro food processing enterprises, enabling them to scale up their operations and improve their market reach.

Also Read : Union Budget 2024-25: Key Boosts for India’s Marine Sector

Financial Support and Infrastructure Development

The Union Budget 2024-25 includes substantial financial allocations and strategic measures to support the food processing industry. These include:

Nucleus Breeding Centres (NBCs) for shrimp broodstocks, which aim to reduce reliance on imports and cut costs for hatchery operators and farmers.

National Bank for Agriculture and Rural Development (NABARD) will facilitate financing for shrimp farming, processing, and export, covering 80% of project costs with an interest subvention of up to 3%.

Enhanced access to infrastructure development funds for 639 export processing units, improving the quality and competitiveness of Indian marine products in international markets.

Impact and Future Prospects

The comprehensive support and strategic initiatives outlined in the Union Budget 2024-25 are expected to significantly boost the competitiveness of the Indian food processing sector. By reducing costs, enhancing quality, and providing financial assistance, these measures will ensure sustained growth and increased global market share for Indian food products.

Conclusion

The Union Budget 2024-25 presents a well-rounded approach to advancing India’s food processing industry. With strategic schemes like PMKSY, PLISFPI, and PMFME, along with robust financial support and infrastructure development, the budget aims to address the sector’s challenges and promote its growth. The sector’s contribution to GDP, employment, and exports underscores its importance in India’s economic landscape. By continuing to support and develop this vital industry, India is poised to strengthen its position in the global food processing market and achieve its broader economic goals.

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