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India’s food production industry is worth over $400 billion, but level of food processing across categories is still low: BCG-FICCI Report

India’s food production industry—the primary source of livelihood for nearly half of the country’s population—is worth over $400 billion, but the level of food processing across categories is significantly low, according to a report by Boston Consulting Group (BCG) in association with the Federation of India Chambers of Commerce & Industry (FICCI).

A recent study reported that India’s share of agri-production is 9.5% globally, while its share in the export of overall food products is 2-3%, with the share in the export of processed food category even lower at 1-2%.

With fundamental shifts in consumer behaviour owing to the pandemic, growing awareness, convenience and lifestyle changes, and health consciousness, consumers are gravitating towards processed and packaged foods. These newly created opportunities in the food processing industry make it crucial for India to focus strongly on exports and seize the opportunity to capture a burgeoning global market”, “said Hemant Malik, Chairman – FICCI, Food Processing Committee and CEO-Food Division, ITC Ltd.

The total agriculture and food-related exports from India were valued at nearly $50 billion in FY22. Some of the key challenges contributing to this trend include low-cost competitiveness, product quality concerns, limited brand strength in overseas markets, lack of infrastructure for processing, storage, and logistics, as well as limited compliance with sustainability and ethical requirements.

“Given India’s strong position in the production of agricultural products, there is a huge opportunity for India to develop its food processing industry with a strong focus on the export markets. However, there are multiple key inhibitors to this growth, and a concerted effort from both public and private stakeholders is required to address these challenges.

According to the Boston Consulting Group, a structured plan of action in this regard can help India tap the huge potential that can subsequently be unlocked in this sector and propel growth in a global market.

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