At a time when the government is urging Indian manufacturing to scale new heights, the opportunities for the food processing sector never looked so bright before. The bright potential stems from a number of drivers. The government has identified the sector as a key catalyst that can help in shifting more and more employment from agriculture to manufacturing. Consequently, there is a strong impetus towards incentivising the development of food processing infrastructure, which is beginning to show positive results. There is also a discerning shift in the preferences of consumers due to rising affluence and hectic lifestyles. These are driving them more towards packaged food products.
As the market is fragmented, there is lots of scope for achieving higher value addition. The government plans to raise the value addition from 20 per cent in 2005 to 35 per cent currently. This is not a tall order and Indian food manufacturers should not let this opportunity go.
India’s dual advantages as a resource base as well as a lucrative market are attracting both domestic and foreign players to invest. The fact that foreign PE players are getting attracted to invest in Indian companies is testimony to the long term potential of the industry. Both home-grown and overseas players are increasingly looking at ways to drive innovation and boost value addition of food products. These trends promise to take the sector to an accelerated and more sustainable growth trajectory going forward.