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Learn about the Food Processing Industry in India

Narendra Kumar

| Updated: Jun 17, 2019 | Category: FSSAI Food License

food processing industry

Food Processing Industry in India is a sector that includes the processing of raw food ingredients and transforms them into food that can be consumed by humans. This industry is also known as “A Sunrise sector”. These industries are one of the fastest growing sectors in India and worldwide. Thus, food processing industries manufacture their products using the process known as Food Processing. Let’s know about this process in detail.

What is food processing?

Food Processing industries uses a method of Food Processing, a procedure of transforming raw agricultural items or livestock into consumable food items. We can also say the transformation of one form of food into another is called food processing. Also, this sector may include agrarian produce, poultry, and animal slaughtered or butchered components to produce marketable food products. In short, there are three types of food processing techniques as given under:

  • Primary: Turning raw agricultural and livestock in a form that can eventually be consumed by people is  Primary Food Processing
  • Secondary: Everyday processing of food for consumption is Secondary Food Processing. Few of the examples include bread making, wine making, making sausages etc. irrespective of whether these are produced in large industries or at home.
  • Tertiary: Processing of food at an industrial level for marketing purposes is Tertiary Food Processing. Examples include foods such as ready to eat or heat and serve foods, airline meals etc.
food processing industry

Benefits and drawbacks of Food Processing

Food processing has its own advantages and disadvantages. Let’s look at them one by one.

Benefits

  • Removal of toxins
  • Preservation of food products by processes such as pasteurization
  • Marketing and distribution of processed foods are relatively easier
  • Reduce the risk of food-borne diseases
  • Enhances taste
  • Includes great profits
  • Processed meals are convenient for people having short of time
  • Processed foods have a longer life

Drawbacks

  • Depending on the kind of food and method used, the nutritional density of processed food decreases to some extent
  • Processing of food includes the use of food additive which is a risk for human health in various ways
  • Processing of foods using various mechanical equipment, consists of the risk of contamination by any means

Sectors of the Food Processing Industry in India

There are various food processing industries which constitutes in the growth of the Indian market. These are namely:

food industry
  • India is the second largest producer of fruits and vegetable after China with a production of 259 million MT
  • F&V Processing levels are almost up to 2%
  • After all, the climate and other environmental factors of India benefits in the production of this vegetation
food industries
  • The largest producer of milk with a production value of 105 million tons per year
  • India also has the highest bovine population
  • The annual growth of dairy in India is 5% per annum
food processing
  • India is the fifth largest egg producer and eighteenth largest broilers, producer
  • The contribution of the Poultry industry to national income is Rs. 26,000 crore
  • The size of the industry ranges from units with 5000 to 50,000 birds per week
processing food
  • India is the third largest producer of fish and second in inland fish production
  • The contribution of Fishery industry to the national income is $ 70 million per annum
  • The vast coastline of India employs over 14 million people
grains
  • The food production of India is 273.38 million tones
  • The Indian climate contributes to the growth of agricultural products
  • The third largest producer of food grain
spices

World’s largest producer, consumer and exporter of spices

  • Leading exporter of pepper
  • India produces 75 of the 109 variety of spices

What are the licenses required to start a Food Processing Industry in India?

The Indian Government has set up various rules and regulations for people who wish to start a food processing industry in India need specific licenses. Significantly these licenses are;

  • Prevention of Food Adulteration Act, 1954
  • Vegetable Oil Product Order, 1947
  • Meat Food Products Order 1973
  • Fruit products Order, 1955
  • Edible  Oil Packaging(Regulation) Order, 1988
  • The Milk and Milk Products Order, 1992
  • The essential Commodity Act, 1955
  • Food Safety and Standard Authority of India(FSSAI), 2006
  • AGMARK
food

Scope of Food Processing Industry in India

Another key point, the Indian Food Processing Industry currently is USD 130 million and is expected to attract domestic and international investors. Moreover, some of the factors that can increase the demand of the Indian food processing market:

  • The Indian local market offers 1.25 billion opportunities for the rising population of our country.
  • As a matter of fact, our country ranks as number one for the production of milk, ghee, ginger, bananas, guavas, papayas and mangoes
  • Also, India is the second largest producer of rice, wheat and many varieties of vegetable and fruits
  • Demand for processed foods is increasing due to an increase in urbanization and hence resulting in lesser time
  • Overall after China, our country is the fast-growing food industry

What are the challenges faced by the Food Processing Industry in India?

Like every other sector, the Food Processing Industry also faces some problems in its operation. Furthermore, the common issues faced by this sector are as follows:

  • Raw material at hand: due to the seasonal availability of agricultural produce the food sector face problems like delay in production.
  • Limitations of storage areas: At the same time, one of the problems faced by small scale food processing industry is the shortage of space to store raw material
  • Difficulties encountered in transportation: Additionally, transportation plays a vital role in this sector. Problems such as, spoilage, late delivery, breakages and damages to the product, etc. can occur if an error occurs in the same.
  • Technical equipment: The production rate also depends on the type of machines used in a unit for production.
  • Industrial competition: as the demand for processed foods is increasing the competition in the food processing industry is also growing. Despite these facts, the Indian Food Industry is making progress is expanding every year.

Importance/ significance of Indian Food Processing Industries in the international market

India is the leading producer and exporter of processed food. Number one producer of milk and milk products like ghee, etc. also a significant producer of ginger, bananas, guavas, papayas and mangoes. Also, India is the major producer and exporter of spices. Identically, India is the third largest producer of fish and second in inland fish production. Henceforth, our country is known as the second largest producer of rice, wheat, fruit and vegetable.

Considering all the things

Certainly, we can say that India constitutes the major international market in terms of the processed food industry. Due to the industrialization and urbanization, people have less time, and the demand for processed foods is increasing. Hence, at an era like this, the scope of this industry is growing and prospering.

Narendra Kumar

Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.

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