Why this is important to Wisconsin businesses: Wisconsin suppliers of food processing equipment, as well as providers of production, processing, packaging, technology, storage, logistics and retail, will find opportunities in the market.
India is the world’s largest producer of bananas, ginger, guavas, milk, mangoes, okra and papaya. It is the second-largest producer of cashew nuts, fruit, rice, sugarcane, tea, vegetables and wheat, and the third-largest producer of cardamom, cereals, chicory, coconut, lettuce, mace, nutmeg and pepper globally.
Almost 30 percent of agricultural produce is estimated to be wasted due to lack of processing facilities, infrastructure and technology. This indicates an opportunity for India’s food processing sector, which is growing rapidly.
The processed food market is poised for huge growth, and is expected to grow at an annual average of 14 percent, from $322 billion in 2016 to $543 billion by 2020. Some of the largest food processing companies in India are Amul, Britannia, Hatsun Agro, ITC, Monginis, MTR Foods, Nestle, Parle Agro, REI Agro and Ruchi Soya.
During fiscal year 2017-18, India’s exports of processed food totaled $4.2 billion. Leading export products included alcoholic beverages, cereal preparations, fruits and vegetables, guar gum, groundnuts, pulses and processed meat.
To encourage growth in the food processing sector and the creation of modern infrastructure, the government has sanctioned 42 mega food parks, of which nine are already operational. It is also assisting in 228 projects for integrated cold chain and value addition infrastructure. The Indian government is encouraging research and development for product and process development.
In the food processing industry, 100 percent foreign direct investment (FDI) is permitted under the automatic route, and also under the government approval route for trading, including through e-commerce, with respect to food products manufactured or produced in India.
The sector has witnessed a 24 percent increase in FDI, from $727 million in 2016-17 to $905 million in 2017-18.
The sector had attracted FDI worth $516 million and $506 million in FY 2014-15 and FY 2015-16 respectively. The Indian food processing sector is the 13th-largest sector in India to receive FDI. U.S.-based Amazon has secured permission from the government to invest $500 million into the food retail sector.
India is one of the largest importers of machinery for food processing, which requires a high level of precision and advanced technology. There is high demand for new machinery, as well as replacement machinery, for the processing of beverages and dairy products, edible oils, grains, meat and seafood, and sugar. Baking and cereal processing is the single largest segment in terms of imports of machinery.
Some of the largest foreign companies are already operating in India, such as GEA Group (Germany), Tetra Laval (Switzerland), Buhler (Switzerland), Alfa Laval (Sweden), and Heat & Control (U.S.). In FY 2017-18, India imported food processing machinery worth $186 million, an increase of 29 percent from $144.86 million in 2016-17. At $13.56 million, the U.S. provided the fourth-largest share of this machinery during 2017-18, after Italy, China and Germany.
India presents promising opportunities for Wisconsin food processing equipment suppliers and investors in production, processing, packaging, technology, storage, logistics and retail. With an annual loss of harvest worth $15 billion, India is desperate to ramp up its food processing sector.