Food processing is a major segment of the Indian economy that processes raw agricultural products into ready to eat foods for consumption. This sector makes food safer, easier and lasts longer, and enhances both flavor and nutrition. In recent years, the Indian government introduced a few initiatives and schemes to promote the food processing industry. This article reviews these developments and their effects on the sector in recent times.
Overview of Food Processing Industry
Food processing activities in India include processing raw meal components into consumable items. This involves processing grains, fruits, vegetables, dairy and meat products to bread, juices, canned foods in addition to ready-to-eat foods. The industry contributes approximately 13% to the Indian exports and 6% to its industrial investment. Additionally, it has produced jobs for millions.
Government Initiatives & Schemes in Food Processing Industry In India
The Indian government has introduced many programs and initiatives to stimulate food processing industry development and growth. Notable ones include:
1. Pradhan Mantri Kisan Sampada Yojana
- Objective: Launched in 2016, the program gives modern infrastructure for the food processing industry. It has its focus on betterment and increasing of the agriculture productivity alongside decreasing post-harvest losses.
- Components: PMKSY comprise Mega Food Parks, Integrated Cold Chain and Value Addition Infrastructure and Creation/Expansion of Food Processing & Preservation Capacities.
2. Pradhan Mantri Formalisation of Micro Food Processing Companies Scheme
- Objective: Introduced in 2020. It formalizes such enterprises and also assists them in becoming more competitive and exporting.
- Key Features: The scheme offers financial, technical and business assistance to micro food processing businesses. Additionally, it follows the One District One Product approach for promoting specific food products in every District.
3. Production Linked Incentive Scheme for Food Processing Industry
- Purpose: Established in 2021, the PLI scheme encourages domestic production and exports of the Food Processing industry. It stimulates companies to increase their manufacturing capacities and add value.
- Incentives: The scheme offers financial incentives to food processing companies on The basis of production and sales performance.
4. Operation Greens
- Objective: Launched to stabilize the supplies of tomatoes, onions and potatoes, this scheme now consists of 22 perishable crops. It hopes to reduce price volatility and guarantee availability of these crops year round.
- Components: The scheme includes transportation subsidies, storage facilities and industry linkage support for farmers.
5. Food Safety & Standards Authority of India Reforms
- Objective: FSSAI has implemented several changes to streamline the regulation framework for the food processing industry. These reforms aim to guarantee food safety and quality while lowering compliance burden on businesses.
- Key Changes: Transition from product-by-product approval to ingredient and additive based approval and simplifying licensing and registration processes.
Impact of Government Initiatives
The different government schemes and initiatives have influenced the food processing sector of India. Main impacts include:
- Increased Investment & FDI – The government’s supportive policies have attracted investment in food processing. Foreign direct investment likewise increased with USD 4.18 billion in 2014 and 2020. This investment has allowed the building of new processing units and expansion of existing ones.
- Job Creation – Food processing will create more or less 9 million jobs by 2025. Government schemes like PMKSY and PM FME have created several employment opportunities particularly in rural areas through establishment of food processing units and cold chain infrastructure.
- Infrastructure Development – Schemes like Mega food parks and Integrated Cold Chain and Value Addition infrastructure have provided modern Infrastructure for the Food processing industry. This has minimized post-harvest losses and enhanced supply chain effectiveness.
- Market Linkages – Government initiatives have provided better market linkages for farmers to make sure fair prices for their produce. Schemes like Operation Greens have stabilized prices of perishable commodities, lessening the distress experienced by farmers because of price changes.
- Ease of Doing Business – FSSAI reforms streamlined the regulation framework to help companies meet food safety requirements. This has lessened compliance burden on food processing businesses and encouraged new players to the sector.
Challenges & Way Forward for the Food Industry
Regardless of the goodwill of government initiatives, food processing industry in India still has challenges:
- Lack of cold Chain & storage Facilities – Limited Cold Storage & transportation result in post-harvest losses of perishable items. This affects food quality and causes losses for farmers.
- Fragmented supply Chain – Supply chain in India is highly fragmented and costly. Poor road and rail infrastructure may cause losses and delays during transportation.
- Complex Regulatory Environment – The food processing business is entwined with laws, licenses and permits which are tough for companies to get around. Inconsistent enforcement of regulations can cause unfair competition and quality issues.
- Food safety Concerns – Food Safety & quality requirements all through the supply chain continue to be challenging. Public health and reputation of the sector could be damaged by contaminated or even adulterated food items.
- RandD – Limited investment preventing innovation and the Development of new, value added products. India’s RanDD expenditure-GDP ratio of 0.7% is very low when in comparison with major economies and under world average of 1.8%.
Future Directions for Development of Food Industry
To overcome these challenges and build the food processing sector, there are steps:
- Smart food processing Hubs – Develop smart Food Processing hubs with connected technologies including the IoT, AI, and blockchain. These types of hubs might monitor the entire food supply chain for safety, traceability and productivity.
- Nutraceutical Innovation – Develop nutraceutical and functional food according to health needs. These can include foods enriched with nutrients, probiotics and bioactive substances to satisfy the prevailing health problems of the Indian public.
- Zero Waste Processing – Use zero waste processing in which all of the raw materials are utilized. For instance, by transforming food waste into byproducts or biofuels from food production into innovative items like bio-plastics or animal feed.
- Community-Based processing Centers – Develop community-based food Processing facilities in the countryside. These kinds of centers can be utilized by local growers to process produce, reducing post-harvest losses and also producing rural employment.
Conclusion
Food processing business in India possesses immense potential for development and growth. The latest government schemes and initiatives have attracted investments, created jobs and also enhanced infrastructure to the industry. Yet, the realization of the real potential of the industry calls for dealing with the existing challenges.
Using advanced technologies, promoting better market linkages and innovation, food processing can bring about India’s economic development and food security.
FAQs
What are new advancements in food processing?
Recent breakthroughs in food processing involve the application of Internet of Things (IoT) along with artificial intelligence (AI) platforms, along with blockchain for supply chain effectiveness and traceability. Government programs like the Production Linked Incentive (PLI) scheme also aim to improve manufacturing capacities and exports to spur overall industry growth.
What are new government initiatives in food processing industries?
The government of India has introduced Food Processing initiatives like Pradhan Mantri Kisan Sampada Yojana (PMKSY), Pradhan Mantri Formalisation of Micro food processing Businesses (PM FME) Scheme and Production Linked Incentive (PLI) Scheme. These initiatives deal with issues including infrastructure building, funding and ease of conducting business to encourage sector growth.
How is the food processing industry in India going forward?
Food processing business in India will create jobs, invest more and add to the economy in future. Rising household consumption and continuing government assistance would make India the fifth-largest consumer of food and food technology on the planet by 2030.
How can the food processing industry in India be made better?
Enhanced food processing business in India requires investments in cold chain & storage infrastructure, supply chain efficiency, simplified regulatory frameworks and increased R&D activities. Promoting smart food processing hubs and community-based processing centers might also deal with present challenges and foster innovation in the sector.
What is the food processing scheme in India?
Pradhan Mantri Kisan Sampada Yojana is among the key food processing systems in India. It was launched in 2016 to offer modern facilities for food processing, minimize post-harvest losses and also increase farming efficiency. The scheme comprises Mega food Parks, Integrated Cold Chain Infrastructure and Food processing & preservation capability expansion.
What’s the greatest challenge faced by the food processing industry in India?
The greatest problem confronting the food processing business in India would be not enough cold chain and storage facilities. Insufficient infrastructure causes serious post-harvest losses that affect food quality and farmer incomes. Reduced waste, enhancing supply chain effectiveness and enhancing the sector performance is thus essential to deal with this particular problem.
