The food processing sector of India experienced substantial growth during the previous ten years to become an essential driver for national economic advancement. Table 1, which the MOFPI derived, presents key GVA development trends regarding India’s Food Processing Industries (FPI) operations at constant 2011-12 prices. The sector data provides essential measurements of its impact on India’s national economic output, which allows analysts to track its performance evolution.
Source: Annual Report (2023 – 2024), Ministry of Food Processing Industries, Government of India, https://mofpi.gov.in/
1. Steady Economic Contributions by the Food Processing Industry
India’s food processing industry’s GVA rose steadily from ₹1.3 lakh crore in 2012-13 to ₹1.96 lakh crore in 2021-22. The food processing sector recorded a 5.2% CAGR for economic growth from 2012-13 to 2021-22 despite experiencing COVID-19-related economic challenges. Data shows that year-over-year growth remained continuous while showing particular speedups, which exceeded 7% in 2014-15 and 2016-17.
The growth of the food processing industry in India received significant influence from the development of broader economic activities throughout agriculture and manufacturing sectors and their associated sectors. The value added worth of agricultural activities rose by ₹9.50 lakh crore from 2012-13 to 2021-22, amounting to ₹24.74 lakh crore. India’s food processing benefits from agricultural outputs simultaneously to drive its business operations and achieve increased value generation.
2. Various forces drive the expansion of the food processing sector.
Manufacturing plays a critical role in the food industry because its Gross Value Added figure rose from ₹14.87 lakh crore in 2012-13 to ₹29.63 lakh crore in 2021-22. The sector’s performance demonstrates both progress in processing technologies and improved infrastructure, together with effective policy support measures. The Make in India initiative, alongside Production-Linked Incentive (PLI) schemes implemented by the government, has served to intensify the manufacturing base of the food processing sector.
Source: Annual Report (2023 – 2024), Ministry of Food Processing Industries, Government of India https://mofpi.gov.in/
The food industry needs agricultural GVA growth to expand because agriculture continues to contribute moderately to national economic production. The industry made sizeable investments in backward integration to obtain farmer supplies directly, which reduced agricultural waste during storage. Forward linkages, which include better logistics technologies and e-commerce networks, enable businesses to achieve smooth market distribution of their processed products.
The food industry maintained strong resistance capabilities when the economy experienced macroeconomic instability. The pandemic triggered national economic contractions, yet the food processing industry recovered rapidly as its GVA has grown from ₹1.94 lakh crore in 2020-21 to ₹1.96 lakh crore in 2021-22.
3. Sectoral Contribution and Growth Rates
The annual growth levels of the food processing industry demonstrate its energy and continuous development. During the period from 2013-14 until 2021-22, the food processing sector experienced average growth of 5% while generating performance results that exceeded national economic growth rates at specific times. For instance:
The food processing industry achieved a 5.1% GVA increase during 2015-16, which surpassed both agricultural (3.08%) and manufacturing sector (4.98%) growth elements.
The growth rate of India’s food processing increased to 9.12% during 2018-19 because of government policies and investments from the private sector.
The food industry continuously grows at a consistent rate because it remains a vital sector that combats unemployment, sparks inclusive development, and strengthens export capabilities. During the 2021–22 fiscal year, the food industry maintained its market position by generating 1.56% of total GVA.
4. Food Industry’s Role in Manufacturing and Agriculture
This demonstrates that India’s food processing industry heavily depends on existing connections between manufacturing and agricultural sectors. The manufacturing GVA contributions from the sector remained between 8.5% and 9% throughout the previous ten years, resulting in a stable performance among other manufacturing sub-sectors. The food industry demonstrated rising influence on agricultural GVA because it strengthened value addition and initiatives that increased farmer income.
5. Challenges and Opportunities
India’s food processing sector demonstrates excellent growth but operates under multiple recognizable obstacles.
- The persistent challenges affecting the food industry include inadequate rural infrastructure together with inefficient cold chains, causing high perishable goods loss rates.
- The numerous food regulations effectively burden companies with higher compliance costs due to their diverse set of requirements for food safety and labeling and quality standards.
- Skill gaps have increased because the industry is experiencing rapid modernization, resulting in needed professionals who specialize in automation, quality assurance, and packaging innovations.
The present industry difficulties generate strategic openings for new startups as well as established businesses to invest in innovative solutions. For example:
- Production lines should adopt automation as well as Internet of Things and artificial intelligence systems, which will improve quality control systems.
- The food industry has the potential to grow its export operations by capitalizing on India’s agricultural diversity for producing organic ready-to-eat and health-focused products that face rising global demand.
- The global market demands sustainably designed practices such as waste reduction, energy-efficient operations, and eco-friendly packaging, which businesses should integrate into their operations.
6. Policy Support and Future Outlook
Government support programs have played a major role in expanding India’s food processing industry’s development.
- The Mega Food Parks Scheme progresses the sector by building processing unit clusters that enhance market relationships and operational efficiency.
- The Agri-Infra Fund provides financial support for building infrastructure that consists of storage facilities along with cold chain systems.
- The PLI Scheme for Food Processing has boosted investment opportunities in ready-to-eat foods and organic product segments by providing incentive support.
India’s food processing industry will reach a projected worth of $500 billion during 2030 because of rising incomes and changing customer behavior patterns along with increasing urban population numbers. For the realization of this potential, the sector needs to adopt digital transformation methods alongside promoting farmer-producer organizations, and it must set goals for export development.