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Why to invest in Indian Agro-Food Sector?
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Contents
World Food and Agro Introduction Global Food Industry Global Trade
India’s International Trade India: As World Food Basket Overview of Export/Import APEDA Indian Trade Policy Trade Policy Benefits Regional Free Trade Agreements
Agriculture: Backbone of Food Industry
Introduction Agriculture Production Horticulture Production Animal Husbandry & Dairy Meat Industry Poultry Fish and Marine Products Sugar Industry
Government Incentives & Initiatives Introduction Initiatives in Agriculture Grants/Subsidy: MoFPI Special Fund: NABARD MSME Schemes Make in India: Tax Benefits
Food Industry: Snapshot View Introduction Major Players Market Size FSSAI Food Safety and Quality Standards Bottlenecks in Food Industry
Why to Invest in Food Industry
Introduction Growth Drivers Advantage India Business Plan Preparation Winning Consumer Trust
The Way Forward
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Tables Page No.
Principal Agriculture Export Commodities Principal Agriculture Import Commodities Agriculture Production of Major Crops in Last five years Marine Products Exports States (India) Export of Marine Products in Quantity and Value (2013-14) Fisheries Production in 000 Tonnes in top 5 States (2012-13) Segments and Examples of Food processing
Graphs/Infograhics Page No.
World Population Growth Estimate 3 Global Food Industry Statistics and Market Size Overview 4 Top 10 Global Exporters and their share (Countries) 6 Top 10 Global Importers and their share (Countries) 6 Share of India's Agricultural Export/Import in global trade 7 Import Commodities 9 Percentage Share of Different Commodities in Export 9 Percentage Share of Different Commodities in Import 10 Basmati/Non-Basmati Rice Export from India (2014-15) 12 Indian Trade Policy- Price Stabilization Instrument 14 Share of Different Commodity Groups in Horticulture Production 20 Livestock Population in India (cattle, buffalo, sheep, goats) 24
Segment wise net sales of top companies listed on BSE in Rs. Crore Hub-Spoke model of Mega Food Park Major Factors for growth in Food Industry Reasons for NPA in agro-food sector
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Disclaimer
This report has been prepared from various public sources believed to be
reliable (set out at relevant places throughout the report and listed out all
references at the end of the report.) FoodCognics is not responsible for any
error or any decision by the reader based on this information. This
document should not be relied upon as authoritative or taken in
substitution for the exercise of judgment by any recipient or a substitute for
detailed advice and we do not accept responsibility for any loss as a result of
relying on the material contained herein. This document is for information
purposes only and not intended to be a substitute for professional, technical
or legal advice. Whilst due care has been taken in the preparation of this
document and information contained herein, neither FoodCognics nor other
legal entities in the group to which they belong, accept any liability
whatsoever, for any direct or consequential loss arising from any use of this
document or its contents or otherwise arising in connection herewith.
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“Future belongs to nations with grains not guns”- M S Swaminathan Wadapav sellers in Narrow Street of Mumbai may not fetch your attention
but he is part of global food industry that uses Pav (Bread) made from
refined wheat flour and oil from oil refineries or extraction plants, spices
blended and prepared in spice processing industry. Euromonitor
International reckons the packaged food industry–including everything from
pasta and cooking oil to canned and frozen foods–is worth almost $1.6
trillion. The World Bank puts the food and agriculture sector at 10% of
global gross domestic product, which, taking the bank’s 2006 estimate of
about $48 trillion would make the sector worth about $4.8 trillion.
1. WORLD FOOD AND AGRO
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Food is one of the basic needs of all human being. Current global population
is about 7.2 billion and will reach to 9 billion by end of 2050. Providing safe
and quality food to citizens is major challenge of all governments. Climate
change made this internationally stressed point. The anatomy of global
agriculture has undergone a complete metamorphosis in recent decades and
is structurally very different now. According to the World Fact book of the
CIA in 2014, the global agricultural output was $ 4,771 billion. But a full 42
percent of this output comes from just six countries – China ($ 1,005 billion)
is the largest producer, followed by India ($ 367 billion). The US is third ($
279 billion), followed by Brazil ($ 130 billion), Nigeria ($ 122 billion) and
Indonesia ($ 121 billion). As one can see, five of the six global leaders in
agricultural output are developing countries. In fact, China and India alone
account for close to 30 percent of the global total.
According to the Food and Agriculture Organization (FAO), there are more
than 570 million farms in the world, and 70-80 percent of them are family
farms, accounting for more than 80 percent of the world’s food in terms of
value. Only four percent of these farms are present in high-income
countries. Clearly, family farming forms the backbone of agriculture in
developing countries.
Global Food Industry
7900
2500
1486
279
72
0 1000 2000 3000 4000 5000 6000 7000 8000 9000
Global Food and Agricultural Industry
Packaged Food Industry
Global Food Exports
Global Non-Food Agricultural Exports
Global Organic Food Sales
GLOBAL FOOD INDUSTRY MARKET SIZE (In Billion$)
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According to Alexandratos, N and J Bruinsma in ‘World agriculture towards
2030/2050’, food supplies need to increase by 60 percent (estimated at
2005 food production levels) in order to meet the food demand in 2050.
India’s domestic demand for food and fibre is expected to go up considerably
as the country has the second-largest economically active population in the
world.
The need of the hour is strategic thinking and rapid but thoughtful action
that will result in increase in production and reduction in wastage. The UN-
FAO estimates that nearly 30 percent of foods produced are wasted post-
harvest, resulting in huge economic losses in addition to a negative
environmental footprint. Food availability and accessibility can be made
better by increasing production, improving distribution, and reducing these
losses. Thus, reduction of post-harvest food loss is a critical component of
ensuring global food security.
In the next 10-15 years, it is expected that 75 percent of primary
agricultural production will come from Asia, South America and Africa.
Efforts have to be made to protect crops from pre-planting to post-harvest
for ensuring enough food is produced to feed the world. Thus, crop
protection is a key component in guaranteeing food security.
Food Industry can play vital role in ensuring food security worldwide, food
processing helps in reducing post-harvest losses, increases shelf life by
preserving foods and can be made available in off season and distant places.
Global Trade
As per World Trade Statistical review 2016 regarding agricultural products in 2015,
below table mentioned about top 10 exporters and importers in world. India ranks
ninth with 2.2% of global exports whereas it ranks seventh in terms of imports with
1.6% of world imports. The top ten exporters represented 72.7 per cent of world
agricultural exports in 2015 and top ten importers represented 67.9 per cent of world
agricultural imports in 2015.
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585
16380 73 63 39 36 36 35 35
Top 10 Global Exporters
37.1
10.4
5.14.6 4 2.52.32.32.22.2
Top 10 Global Exporters
590
160 14974 38 33 28 28 28 27
Top 10 Global Importers
37.1
10.4
5.14.6 4 2.52.32.32.22.2
Top 10 Global Importers
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India is among the 10 leading exporters of agricultural products in the
world. The country has emerged as a significant exporter of certain agri-
items like cotton, rice, meat, oil meals, pepper and sugar. India has
developed export competitiveness in certain specialized agriculture products
like basmati rice, guar gum and castor.
Agricultural exports increased from Rs 2,19,900 crores in 2012-13 to Rs
2,29,996 crores in the financial year 2014-15, registering a growth of nearly
4.6 per cent. The increase in the value of agricultural exports during 2014-
15 over 2013-14 was primarily on account of higher exports of marine
products, non-basmati rice and meat and meat preparations.
1.00%0.80%
1.10%
2.50%
0.50%0.40%
0.70%
1.50%
1980 1990 2000 2014
Share of Indian Agriculture Export/Import in World Export /Import
Export Import
2. INDIA’S INTERNATIONAL TRADE
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Commodities 2012-13 2013-14 2014-15 2015-16
Rs. Crore
Rs. Crore
Rs. Crore
Rs. Crore
Marine Products 18841 30627 33685 31183 Buffalo Meat 17409 26458 29283 26682 Basmati Rice 19409 29292 27599 22714 Spices 15177 15146 14842 16374 Non-Basmati Rice 14449 17795 20336 15086 Cotton Raw Incld.Waste
20277 22338 11643 12816
Sugar 8576 7179 5327 9772 Coffee 4711 4799 4973 5123 Cashew 4067 5095 5566 5025 Fresh Vegetables 3407 5384 4612 4763 Tea 4719 4873 4166 4719 Castor Oil 4310 4364 4710 4616 Tobacco Unmanufactured
3816 4783 4163 4371
Groundnut 4065 3188 4675 4039 Fresh Fruits 2687 3646 3148 3918
Commodities 2012-13 2013-14 2014-15 2015-16
Rs. Crore
Rs. Crore
Rs. Crore Rs. Crore
Vegetable Oil 53562 44038 59094 52549 Pulses 13345 11037 17063 19238 Wood and other wood 11439 12500 11888 7886 Fresh Fruits 6180 7716 9544 8647 Cashew 5434 4668 6600 7399 Spices 2716 3452 4392 3842 Sugar 3094 2287 3668 2778 Cotton raw included waste
2467 2376 3101 2135
Misc. Processed Items
1268 1474 1749 1271
Coffee 796 729 930 607
Principal Export Commodities of Last Four Years
Principal Import Commodities of Last Four Years
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India’s agricultural imports increased from Rs. 1,03,693 crores in 2012-13
to Rs 1,22,188 crores in 2014-15, registering a growth of nearly 17.8 per
cent. The increase in the value of agricultural imports during this period
was primarily on account of imports of vegetable oils, pulses, cashew nuts,
spices, sugar and cotton. The share of agricultural imports in total imports
increased from 3.88 per cent in 2012-13 to 4.47 per cent in 2014-15.
During 2015-16 (Apr-Dec), agricultural imports are estimated at Rs
1,06,935 crores as compared to Rs 94,634 crores during the corresponding
period in 2014-15.
0
2000
4000
6000
8000
10000
12000
14000
'000
Ton
nes
Import Commodities
2012-132013-142014-152015-16
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Marine Products20%
Baffalo Meat18%
Rice-Basmati17%
Rice-Non Basmati
12%
Spices9%
Cotton Raw(Incld.Waste)
7%
Guargam Meal6%
Oil Meals 5%
Cashew3%
Sugar3%
Percentage Share of Different Commodities in Export
Vegetable Oil50%
Pulses14%
Wood & Other Wood10%
Fresh Fruits 8%
Cashew6%
Spices4%
Sugar3%
Cotton Raw incl. Waste
3%Coffee
1%
Misc.Processed Items
1%
Percentage Share of Different Commodities in Import
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APEDA
The Agricultural and Processed Food Products Export Development
Authority (APEDA) was established by the Government of India under the
Agricultural and Processed Food Products Export Development Authority
Act passed by the Parliament in December, 1985. The Act (2 of 1986) came
into effect from 13th February.
Role of APEDA
Products Monitored
Control and regulation of the service levels, charges, terms and
conditions that may be levied upon exporters of Perishable Agricultural
Produce by nodal agencies
Prescribing the criteria for accreditation of Nodal Agencies;
Accreditation, renewal, modification, suspension or
cancellation of such accreditation of Nodal Agencies
Levy of charges for carrying out the purpose of this Appendix. Calling for
information from, undertaking inspection of, conducting enquiries and
investigations including audit of nodal agencies
Registration of persons as exporters of the scheduled products on payment of such fees as may be
prescribed
Promotion of export oriented production and development of the Scheduled products
Training in various aspects of the industries connected with the
scheduled products
Improving of packaging of the Scheduled products; Improving of marketing of the
Scheduled products outside India
Fruits, Vegetables
Meat and Meat Products
Poultry and Poultry Products
Dairy Products
Confectionery, Biscuits Bakery
Honey, Jaggery and Sugar
Cocoa and its products, chocolates
Alcoholic and Non-Alcoholic
Floriculture Herbal and Medicinal Plants
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Indian Trade Policy
Cereals
The export of cereals is currently free and imports are allowed through the FCI
subject to some conditions. The import duty was raised from zero per cent to 25 per
cent for wheat on 19 October 2015 and from 70 per cent to 80 per cent for rice.
Rice from India is traded in two varieties—basmati and nonbasmati. Wheat is
traded as duram and other wheat.
23573
12634
4026
7702
0
5000
10000
15000
20000
25000
30000
Basamati Rice Export from India (2014-15)
Non-Basmati Rice Exports from India
(2014-15)
Rest of World
Share of top 10 CountriesValues in Rs. Crore
58%
42%
Basmati and Non- Basmati Rice Export (2014-15)
Basamati Rice Export from India (2014-15)
Non-Basmati Rice Exports from India (2014-15)
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Sugar and Cotton
Oil and Oil Seeds
Pulses
In the case of sugar and cotton,
exports are free without any
quantitative restrictions. Import duty
of 40 per cent is levied on sugar, while
duty-free import is allowed for cotton.
In the case of oil seeds, exports are free and imports
are subject to a levy of 30 per cent duty. Vegetable
oil export is permitted in consumer packs of 5 kg,
subject to a Minimum Export Price (MEP) of US$
900 per MT. Besides, there are no restrictions on
the export of coconut oil and rice bran oil. Import
duty is levied on crude oil at 12.5 per cent and on
refined edible oils at 20 per cent.
Pulses export is prohibited except
for chick pea (Kabuli chana) and
organic pulses including lentils
upto 10,000 MT per annum.
Import is free
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Trade Policy Benefits
Instrument of Price Stabilization
The Trade Policy has been amended from time to time for various
agricultural commodities in response to domestic availability and the price
situation. In view of domestic shortages and price volatility, the import duty
on wheat was brought down to zero in September 2006 and export was
banned in October 2007. Similarly, to manage shortages in domestic
markets, the import duty on rice was brought down to zero in March 2007
and export was banned in April 2008. In September 2011, export
restrictions on wheat and rice were removed in view of stable prices and
improved stocks. Also, the import duty on rice has been restored to the
statutory level in 2011 in view of sufficient domestic availability.
Price Stabilization Instruments
Niche products such as basmati rice and organic pulses (10,000 MT per annum)
have been allowed to be exported even in the event of a ban on the export of mass
consumption produce such as non-basmati rice and pulses. A decision has been
taken by the Government to allow the export of certain processed products such as
cereal flour and milk products (except SMP) even in the event of a ban on the
export of their primary products in the face of domestic shortages. Export of edible
oils in consumer packs of 5 kg subject to MEP of US$ 900 per MT is also permitted.
Import Duty
Export Restriction
The policy on the export of onion has seen
frequent changes in the past. Exports have
been regulated through MEP or outright
ban. Recently, in April 2015, the MEP on
onion was introduced again in view of high
domestic prices, but was removed on 24
December 2015. The requirement of
canalization of onion exports through state
trading enterprises was also done away with
in March 2014.
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Regional Free Trade Agreements (RFTA)
India has been negotiating free trade agreements (FTAs) for liberalized trade
of agriculture goods to increase its trade. The main developments during the
period under review are listed below.
After the implementation of the India–ASEAN FTA, India’s exports of garlic,
onions, turmeric, wheat and meslin, cane sugar, groundnuts,
oilcake/oilcake meal of soybean, oilcake/oilcake meal of rape/colza seed
and millets (sorghum and bajra) to ASEAN have registered an increase. On
the other hand, high growth of imports from Indonesia has been noticed for
products such as black pepper, refined palm oil, mace, etc. India also
imports crude palm oil and cotton from Malaysia; dog and cat food and
other fresh fruit from Thailand; cashew kernel (whole), black pepper, anise
Negotiations on preferential trade agreements (PTAs) and free trade
agreements (FTAs) continue to progress with the European Union, EFTA
(Switzerland, Norway, Iceland and Liechtenstein), MERCOSUR (Brazil,
Argentina, Paraguay, Uruguay), Chile, Israel, Indonesia, Australia, New
Zealand and Thailand.
A trade in goods agreement between India and ASEAN (Brunei, Indonesia,
Malaysia, Philippines, Singapore, Thailand, Cambodia, Lao PDR, Myanmar
and Vietnam) was signed on 13 August 2009. This FTA became effective from
1 January 2010. The India–South Korea Partnership Agreement (CEPA)
concluded on 7 August 2009 and came into force on1 January 2010.
Trade in goods agreements under the India–export of chick pea
(kabulichana) was permitted considering that India is the largest
producer of this commodity. In 2011, export of up to 10,000 MT per
annum of organic pulses including lentils was also permitted.
agricultural products has been reduced to zero for SAFTA LDCs. Bangladesh is a major beneficiary of this liberalization
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seeds and starches from Vietnam; and chickpeas, red beans and kidney
beans from Myanmar. However, no significant import under FTA has been
noticed from the Philippines or Cambodia.
Instrument of Growth
The export of agricultural commodities has helped producers take advantage
of the wider international market which, in turn, has incentivized their
domestic production. Crops that are exported in significant quantities, such
as cotton, soyabean and maize, have seen significant increases in area State
of Indian Agriculture 2015-16 Japan CEPA and India–Malaysia CECA were
concluded during 2010-11 and have become effective from 1 August 2011
and 1 July 2011 respectively.
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Introduction
India is one of the fastest growing economies in the world and is currently
the focus of great deal of international attention. India has a large and
diverse agriculture and is one of top most producers in world. Agriculture is
key employer in India with about 60% of workforce. India has second largest
arable and cropland after United States. After independence till date Indian
agricultural policy is aimed essentially for self-sufficiency and food
distribution and hunger alleviation. Now we are one of the top most
producer of fruits and vegetables, milk, cashew, eggs, spices, tea etc. in the
world.
In spite of vast natural resources and abundant agriculture produce India
ranks 9th in global food exports. The single most important problem in
Indian agriculture industry is inefficient supply chain and processing units.
Because of lack of cold chain infrastructure and processing facilities about
20 per cent of all foods produced in India are wasted. Demand forecasting is
totally absent in India, farmers are trying to push whatever they produce in
the market. How many farmers in India really knowing that we are
importing about 60% of our total edible oil consumption?
Food processing industry has very important role of linking farmers with
national and international consumers. India has opportunity to be leading
supplier of fresh and processed food in world in near future.
The agriculture and allied sector continues to be pivotal to the sustainable
growth and development of the Indian economy. Not only does it meet the
food and nutritional requirements of 1.3 billion Indians, it contributes
significantly to production, employment and demand generation through
various backward and forward linkages. Moreover, the role of the
agricultural sector in alleviating poverty and in ensuring the sustainable
development of the economy is well established.
3. INDIAN AGRICULTURE
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India’s Position in World’s Production
As a natural consequence of economic growth and structural changes in the
economy, the share of agriculture and allied sectors in the total GDP
declined from around 19 per cent in 2004-05 to 14 per cent in 2013-14,
calculated at 2004-05 constant prices. If the shares of forestry and fishing
are removed, agriculture (including livestock) accounted for about 12 per
cent of the national GDP. However, with around 60 percent of the
population still dependent on agriculture for its livelihood, the sector
continues to play a vital role through its multiplier impact on the economy.
Largest Livestock Population
Largest Producer of Milk
3rd Lragest Producer of Fish
3rd Lragest Producer of Food
Grains
2nd Largest Fruits and Vegetable Producer
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Agriculture Production
Agricultural Production of Major Crops in Last Five Years
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Horticulture Production
The horticulture sector has been a driving force in stimulating growth in
Indian agriculture. India is currently producing 277.7 million tonnes of
horticulture produce from an area of 23.2 million hectares, which has
surpassed the estimated food grain production of 257 million tonnes. The
production of foodgrains and horticultural produce are not meaningfully
comparable due to fundamental differences in the nature of their farming,
characteristics of produce, nature of land requirements, and most
importantly, their nutritional purpose and value.
Fruits
With a production of 88.8 million tonnes, fruits account for about 31 per
cent of total production of horticulture crops. The area under fruit crops
cultivation during 2013-14 was 6.3 million hectares, which is about 27 per
cent of total area under horticulture cultivation in India. A large variety of
fruits, such as banana, mango, citrus, papaya, guava, grape, sapota,
pomegranate, pineapple, amala, litchi, pear, plum and walnut are grown in
India. India is the second largest producer of fruits in the world and
Vegetables
59%
Fruits31%
Spices2%
Plantation Crop6%
Flowers1%
Aromatics1%
Share of Commodity Groups in Horticulture Production
Horticultural products broadly
consist of vegetables, fruits,
spices, flowers, plantation crops
etc. following is percentage share
of production of major
horticulture segments in India.
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accounts for about 13 per cent of the total world production of fruits and
leads in the production of mango, banana, papaya, sapota, pomegranate,
acid lime and amala.
Dairy Industry India continues to be the largest producer of milk in the world. The dairy
sector in India has grown substantially over the years. During the year
2014-15, the annual output of milk was 146.3 million tonnes. The per
capita availability of milk reached the level of 322 grams per day during the
year 2014-15, which is more than the world average of 294 grams per day.
This represents a sustained growth in the availability of milk and milk
products for the growing population. Once a net importer, India has now
turned a net exporter of dairy products. The value of dairy exports in 2013-
14 is USD 546.1 million. Saudi Arabia, Bangladesh, UAE, Egypt, Nepal,
Singapore and Pakistan are among the top export destinations for dairy
products from India.
Besides this dairying has become an important secondary source of income
for millions of rural families, and has assumed a most important role in
providing employment and income-generating opportunities, particularly to
India’s fruit productivity is better than that of China, though China is the largest fruit producing
country
Special efforts are being made to improve the productivity of fruit crops by enhancing the supply
of quality planting material from accredited nurseries and improved package of practices
The per capita availability of fruit to the Indian population is 189 gm/person/day and has been
helping in supplementing nourishment.
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women and marginal farmers. Most of the milk in the country is produced
by small and marginal farmers and landless labourers. About 15.46 million
farmers have been brought under the ambit of 1,68,000 village-level dairy
corporative societies up to March 2015. The cooperative milk unions have
procured an average of 39.2 million kgs of milk per day during the year
2014-15. The sale of liquid milk by the cooperative sector has reached 29.9
million litres per day during the year 2014-15.
Structure of Indian Dairy Industry
There are two major channels for milk collection and distribution that exist
in India. The organized channel, predominantly served by cooperatives and
large private dairies accounts for 31 per cent of the dairy market in 2010
whereas the unorganized channel is served by traders who procure milk
from rural areas and sell in urban areas. There are close to 30 dairy
organizations that process more than 10 lakh litres of milk daily. Amul
Group (including Gujarat Cooperative Milk Marketing Federation) had a
turnover of INR 191 bn ($3.2 bn) in FY 2013 and holds nearly one-third
share of the organized market. Other kay players in the industry are Kwality
Dairy India Limited, Punjab Cooperatives, Mother Dairy India Limited,
Vadilal Industries, Modern Dairies Limited, Parag Milk Foods , Dynamix
dairy industries limited, Nestle India, Dabone International Pvt. Ltd,
Britannia Industries Limited etc.
Market
The total dairy market in India was estimated to be INR 3,000 bn ($60 bn) in
2011 comprising nearly 40% of the total Food & Beverages market. Of this
the organized dairy segment was 20% or INR 600 bn. implying a significant
opportunity for growth for the next decade or more. The total dairy market is
projected to grow by a CAGR of 10-11% to nearly INR 5,000 bn or ($82 bn)
by 2016 (Source: AC Neilson and India Food Guide, Edelweiss, February
2012).
Key dairy products include processed/packaged milk, UHT milk, milk
powder, and other dairy-based, value-added products like butter, cheese,
curd, buttermilk, fruit yoghurts, etc. The processed dairy products market is
likely to grow at a rate of 15%. Further, processed dairy products are
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expected to contribute 30% to the dairy industry by 2016 in value terms.
The organized and branded milk market, dominated by a large number of
cooperative players, is likely to grow to a magnitude of 73% by 2030
according to CII-McKinsey FAIDA report 3, April 2013.
The Intensive Dairy Development Programme, strengthening infrastructure
for quality and clean milk production, Assistance to Cooperatives, and Dairy
Entrepreneurship Development Scheme are some of the Indian
Government’s important schemes/programmes for meeting the growing
demand for milk. MoFPI also provide assistance under NMFP for setting
up/upgradation of milk processing unit and setting up of cold storage for
dairy products.
Meat Industry
Urbanization, increasing health consciousness towards protein rich diet,
preferred meat due to religious preferences, there has been increase in
demand for meat and the sector has gained importance in terms of
contribution to income, employment and foreign exchange earnings.
India has the world’s largest population of livestock and is world’s 5th
largest producer of meat.
648.88
199.08105.34 71.56
140.45
Poultry Cattle Buffalo Sheep Goats
Livestock Population (In Million )
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(*Source: DHAD& F)
The total processing capacity in India is over 1 million tons per annum, of
which 40-50 percent is utilized. At least 70% of the buffalo meat is exported.
India exports more than 0.5 million tons of meat, mostly buffalo meat.
Indian buffalo meat is witnessing strong demand in international markets
due to its lean character and near organic nature. Unlike cow slaughter,
there is no social taboo in slaughtering buffalo for meat.
The major areas for Buffalo Meat production are Uttar Pradesh, Andhra
Pradesh, Maharashtra and Punjab. Uttar Pradesh is the top buffalo meat-
producing state with production of 0.3 million tonnes in 2011.
The value of output from livestock sector at
current prices `during 2011-12
The value of output from meat group as per the estimates of CSO at current prices in 2011-12
INR 4,59,051
Cr.
INR 83,641
Cr.
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Uttar Pradesh, Andhra Pradesh, Maharashtra
and Punjab.
Vietnam Social Republic, Malaysia,
Thailand, Egypt Arab Republic, Saudi
14,49,758.64 MT
26,457.79 Crores
Buffalo Meat
Rajasthan, Jammu & Kashmir, Uttar Pradesh, Gujarat, Hilly regions of
North and Eastern Himalayas
United Arab Emirates, Saudi Arabia, Qatar,
Kuwait and Oman and Jordan
22,608.94 MT
694.10 Crores
Sheep & Goat
Meat
Andhra Pradesh, Vishakhapatnam Chittoor, Karnataka, Tamil Nadu, Maharashtra, Gujarat,
Madhya Pradesh, Orissa and North Eastern States
Oman, Germany Indonesia, Saudi Arabia
and Afghanistan
4,37,673.53 MT
565.87 Crores
Poultry Products
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In recent years, the buffalo meat industry for export has attracted heavy
investment. The Government of India has also taken steps to provide thrust
to the buffalo meat sector by introducing schemes on salvaging and rearing
of buffalo male calves and modernization of abattoirs. Export oriented Units
has invested hugely in establishment of large abattoirs-cum-meat
processing plants with the latest technology. India has already established
ten state-of-art mechanized abattoirs-cum-meat processing plants in various
states based on slaughtering buffaloes and sheep. These plants are
environment friendly, where all the slaughterhouse by-products are utilized
in the production of meat-cum-bone meal, tallow, bone chips and other
value-added products. Several more are under construction. The plants
follow all the sanitary and phyto-sanitary measures required by the
International Animal Health code of World Organization for Animal Health
(O.I.E.). These plants mostly produce buffalo meat for export. The expanding
domestic market as well as export markets for buffalo meat is creating a
window of opportunity for all the stakeholders in the value chain of buffalo
meat production.
Poultry India is the ninth-largest producer of poultry meat, fifth largest egg producer
and the eighteenth largest producer of broilers in the world. The demand for
poultry is growing at 7 to 8 percent (ICRA REPORT ).
Poultry development in the country has shown steady progress over the
years. Currently egg production is around 66.45billion in 2011-12. The
poultry meat production is estimated to be about 2.47 million tonnes. The
current per capita availability of eggs is around 55 eggs per year. Domestic
per capita consumption of poultry meat is estimated at 2.8 kg per annum;
In value term, total poultry market size is estimated at USD 9.93 billion at
the wholesale price level indicating value growth of 8% over
CY2012.(Calendar Year).
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Farmers in India have graduated from rearing country birds to rearing
hybrids which ensure faster growth of chicks, higher yield of eggs per bird,
increased hatchability, low mortality rates, better feed conversion and
consequently sustainable profits to the poultry farmers. The encouraging
growth in poultry output over last decade makes India one of the fastest
growing major world market in the segment with future growth potential
remaining strong on back of wide gap against global per capital
consumption norms and favorable socio economic factors.
India needs investment in development of cold chain infrastructure and an
efficient distribution system for transitioning from a predominantly live
bird/wet market to a chilled/frozen market for expansion of domestic
poultry industry as well as to increase presence in international trade.
With the exception of sterile egg powders exported to Europe, virtually all-
Indian poultry and egg production is consumed within the country and
exports to South Asia. Four southern states-Andhra Pradesh, Karnataka,
Kerala, and Tamil Nadu-account for about 45 percent of the country's egg
production. The eastern and central regions of India account for roughly 20
percent of egg production. (AT Kearney). There has also been an increase in
the size of poultry farms. In earlier years, broiler farms had produced on
average a few hundred birds (from 200-500 chicks) per cycle. Today units
with with 5,000 to 50,000 birds per cycle are common. Similarly, in layer
farms, units with a flock size of 10,000 to 50,000 birds have become
common.
Fish and Marine Products
Marine and Fisheries including capture, culture and processing is an
important sector in India. It provides employment to millions of people and
contributes to food security of the country. With a coastline of over 8,118
km, an Exclusive Economic Zone (EEZ) of over 2 million sq km, and with
extensive freshwater resources, fisheries play a vital role. India ranks second
in world fish production, contributing about 5.4 per cent of global fish
production. Total fish production during 2013-14 is estimated at 9.45
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million mt with 6.10 mt coming from the inland sector and 3.35 mt from the
marine sector. The sector contributes about 1 per cent to overall GDP and
represents 4.6 per cent of agri GDP. (source : Economic survey of india,
2013-14)
Andhra Pradesh, Gujarat, Karnataka, Kerela, Maharashtra, Orissa, Tamil
Nadu and West Bengal are key states that have huge potential to enhance
India’s seafood exports. The production of fisheries (in 000’tonne) in major
states is given below: Year Andhra Pradesh West Bengal Gujarat Kerala Tamilnadu
2012-13 1675.44 1490.01 848.79 677.78 620.40
The bulk of the marine catch comprises oil sardines, followed by penaeid
and non-penaeid shrimp, Indian mackerel, Bombay duck, croakers, smaller
quantities of cephalopods, other sardines and threadfin breams. The major
species from inland capture includes cyprinids, sinusoids and Murrells.
Vannamei shrimp, black tiger shrimp, cuttlefish, lobster, clams, fish fillets
and squid are certain products that are exported from India.
India’s substantial fishery resources are under-utilised and there is
tremendous potential to increase the output. There is a huge scope for
investments in packaged products, marine processing plants, operations in
preservation, processing and export of coastal fish for the private sector as it
holds vast, untapped marine resources with a great export potential.
Processing of fish into canned and frozen forms is carried out mostly for
exports. Besides, there is an increased demand for processed and ready-to-
eat marine products in the domestic and foreign market.
During 2013-14 exports aggregated to 9,83,756 MT valued at Rs. 30,213.26
crores The increased production of L. Vannamei shrimp has helped to
achieve higher exports.
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Export Details
2012-13
2013-14
Growth %
Quantity Tonnes 928215 983756 5.98
Value Rs.(Crore) 18856.26 30213.26 60.23
Frozen shrimp continued to be the major export value item accounting for a
share of 64.12% of the total US$ earnings. Shrimp exports during the period
increased by 31.85%, 99.54% and 78.06% in quantity, rupee value and US$
value respectively. There was all time high growth in unit value realization of
frozen shrimp at 35.05%.
The overall export of shrimp during 2013-14 was to the tune of 3,01,435 MT
worth US$ 3210.94 million. USA is the largest market (95,927MT) for frozen
shrimps exports in quantity terms followed by European Union (73,487 MT),
South East Asia (52,533MT) and Japan (28,719 MT).
The contribution of cultured shrimp to the total shrimp export is 73.31% in
terms of US$. The export of cultured shrimp has shown tremendous growth
of 36.71% in quantity and 92.29% in dollar terms.
The export of Vannamei has shown tremendous growth to 1,75,071 MT from
91,171 MT and US$ 1,994.27 million from 731.01 million compared to
2012-13. The export of Vannamei recorded a growth of 92.03% in quantity
and 172.81% in dollar terms. 44.59 % of total Vannamei shrimp was
exported to USA followed by 17.07% to EU, 16.54% to South East Asian
countries and 4.01 % to Japan in terms US$. Export of Black Tiger shrimp
reduced from US $521.33 million to 435.79 million and 61,177 MT to
34,133 MT compared to last year.
Fish, has retained its position as the principal export item in quantity terms
and the second largest export item in value terms, accounting for a share of
about 32.97% in quantity and 14.15% in US$ earnings. Unit value
realization of fish also increased by 21.65%.
Export of Fr. Squid has shown growth of 15.98%, 25.68% and 10.78% in
terms of Quantity, Rupee Value in and US$ terms. However it has shown
decrease in unit value realization by 4.48%. Fr. Cuttlefish
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recorded a growth of 8.34% in quantity. Dried items have shown a positive
growth in terms of rupee value by 21.72% and in dollar terms by 9.86%.
Live items exports shown a growth by 16.17%, 42.43% and 26.81% in
quantity, rupee value and US $ realization respectively compared to the
previous year. (Source: MPEDA) There is a scope for developing technology
for value addition and Storage infrastructure for exports of fish. Government
is taking initiative to establishment of marine-based food parks through
public private partnership. Government is also encouraging foreign
investment in infrastructure for distribution and storage.
Policies in Fisheries
Foreign equity is permitted in fish processing sector. Fish processing
projects with a minimum of 20% value addition can be set up as 100%
Export Oriented Units. All items can be exported freely except for silver
pomfrets of weight less than 300 gms.
Sugar Industry
In an era where there is a need for inclusive growth, the sugar industry is
amongst the few industries that have successfully contributed to the rural
economy. It has done so by commercially utilizing the rural resources to
meet the large domestic demand for sugar and by generating surplus energy
to meet the increasing energy needs of India. In addition to this, the
industry has become the mainstay of the alcohol industry. The Indian
domestic sugar market is one of the largest markets in the world, in volume
terms. India is also the second largest sugar producing geography. India
remains a key growth driver for world sugar, growing above the Asian and
world consumption growth average. India’s sugar production is estimated at
about 25.20 MMT in SS2015-16. It is expected that in 2017, the domestic
sugar consumption would be approximately 28.5 million MT. (Source: ISMA)
Introduction A strong and dynamic food processing sector plays a vital role in attaining higher value-addition, reduction in wastage of agricultural produce, enhancing shelf life of food products, promoting employment generation and increasing income of the farmers. The term “food processing” covers all the processes that food items go through right from the farm till the time they reach the consumer’s plate. Value addition processes include
i) Basic cleaning, grading and also alteration of the raw material to a
stage just before the final preparation;
ii) Making ready-to-eat and ready-to-drink foods, such as bakery
products, instant foods, flavoured and health drinks, etc. Following
is the different processing levels in food industry. There are three
levels of processing – primary, secondary and tertiary following is
details of activities involved in each level of processing for different
commodities.
FICCI, feeding a billion People
With its huge production base, India can easily become one of the leading
food suppliers to the world while at the same time serving its vast growing
4. INDIAN FOOD INDUTRY
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domestic market of over a billion people. India’s large market size, with
growing incomes and changing lifestyles, create incredible market
opportunities for food producers, food processors, machinery makers, food
technologist’s and service providers in this sector. For foreign investment,
automatic approval is given for up to 100 per cent equity for a majority of
processed foods.
The food processing sector has emerged as an important segment of the
Indian economy in terms of its contribution to GDP, employment and
investment. During 2014-15, the sector constituted as much as 9.0 per cent
of GDP in the manufacturing sector and 10.1 per cent of GDP in the
agriculture sector. While, the food processing industries sector has grown at
a rate of 7.1 per cent during 2014-15.
Indian Food
Processing Industry
32% of Total Domestic Food
Market
Estimated USD 194 Billion
Ranks 5Th in
World Production.
Consumption & Exports
9% of Manufacturing GDP & 13% of Export (2014-
15)
7.1% Grwith (2014-15)
70% Secor Dominated by Unorganised
Sector
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Major Players
Many big Indian players have invested in the food processing sector. Some of
them include ITC, HLL, Cargill, Venky’s India, Godrej, Marico, Priya Foods,
MTR, Surya Food & Agro and Haldiram’s. Some of the companies that are
active in the organised food retail domain include ITC, Bharti, Reliance,
Aditya Birla Group, and the Future Group. Almost 70% of the sector is
dominated by the unorganized and small-scale players, indicating the huge
potential inherent in the Indian food processing sector. Following is list of
industry segments and some of major players in the sector Sr.No. Serctor Sub Sectors Major Players in India
1 Sugar/Jaggery Sugar Industry Shree Renuka Sugars, Bajaj Hindusthan Sugars, Balrampur Chini, EID Parry, Dhampur Sugar
Jaggery 2 Dairy Industry Dairy Industry Amul Dairy, Mother Dairy, Hatsun Dairy,
Gowardhan, Nestle Ice-cream Amul, Mother Dairy, Havmor, Baskin & Robins
3 Live Stock and Meat Industry
Poultry Industry Venkys, Saguna, Godrej-Tyson Fish Processing Seasaga, Ulka Seafoods, Gadre Marine
4 Alcoholic Beverages Beer UB (Kindfisher), SAB Miller (Fosters), Carlsburg Vodka (Smirnoff) Wine Sula,
5 Grain processing Rice Milling/Exports Kohinoor, Rai Corn Starch Industry Cargill, Santosh Limited,
Flour ITC (Ashirwad), Shakti Bhog, Parakh Agro (Samrat), General Mills (Pillsaberry)
6 Oil Industry Ruchi Soya, Adani Wilmer, ADM 7 Fruits and Vegetables Pulping Industry Jain Irrigation Systems, Allana, Capricorn
Juice Industry Pepsico (Tropicana), Dabur, Coca Cola, Parle (Frooti)
Pickles, Chutney and Sauces
Desai Brothers (Mothers Recipe), Nilons, Chordia Foods (Pravin & Navin), ADF (Soul)
Dehydrated Vegetables Jain Irrigation Systems, Frozen Food Industry Deepkiran Foods, Global Gourmate, Vista
Procssed Foods 8 Ready-to-Eat Industry Retort Curries and
Biryanis Haldiram,Tastybite, MTR
Wafers/Namkeens Pepsico (Lays), Balaji, Haldiram, Diamond, Parle
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Agro Noodles Nestle (Maggi), HUL (Knoor), ITC (Yepiee),
Capital Foods (Chings Secret) Biscuit Industry Parle (Parle-G, Krack Jack, Monaco), Britannia
(Tiger, GoodDay), ITC (sunfeast) Chocolates and Candies Cadbury (Dairy Milk), Nestle (Kitkat) 9 Plantation Crop
Processing Spices Industry Everest, MDH, Pravin Masalewale (Suhana,
Ambari) 10 Baby Foods/Health
Foods Nestle (Farex, Cerelac), Cadbury (Bronvita),
(Boost), Heinz (Complain) 11 Food Ingredients and
Additives IFF, Givudan, Firminich
2,393
19,827
39,806
71,811
49,581
13,945 10,179 5,388
36,052
TOP COMPANIES IN INDIA BY NET SALES-BSE (In Rs. Crores)
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Market Size The Indian food and grocery market is the world’s sixth largest, with
retail contributing 70 per cent of the sales.
The Indian food retail market is expected to reach Rs 61 lakh crore
(US$ 894.98 billion) by 2020.
Indian food service industry is expected to reach US$ 78 billion by
2018.
The Indian gourmet food market is currently valued at US$ 1.3 billion
and is growing at a Compound Annual Growth Rate (CAGR) of 20 per
cent.
India's organic food market is expected to increase by three times by
2020.
The online food ordering business in India is in its nascent stage, but
witnessing exponential growth.
The organised food business in India is worth US$ 48 billion, of which
food delivery is valued at US$ 15 billion.
FoodPanda, Zomato,TinyOwl and Swiggy building scale through
partnerships, the organised food business has a huge potential and a
promising future.
The Food Safety and Standards Authority of India (FSSAI) FSSAI is the food regulatory body established under Food Safety and
Standard, 2006 which consolidates various acts & orders that have hitherto
handled food related issues in various Ministries and Departments. FSSAI
has been created for laying down science based standards for articles of food
and to regulate their manufacture, storage, distribution, sale and import to
ensure availability of safe and wholesome food for human consumption.
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FSSAI is a single reference point for all matters relating to food safety and
standards, by moving from multi- level, multi- departmental control to a
single line of command.
Food Safety and Quality Standards Due to complex challenges in today’s food supply chain, many of the world's
largest food retailers are mandating supplier certification to Global Food
Safety Initiative (GFSI) schemes, which include ISO, SQF, BRC, IFS, FSSC,
GLOBALG.A.P. etc.These global standards address food, packaging,
packaging materials, storage and distribution for primary producers,
manufacturers and distributors.
ISO 22000:2005
ISO 22000:2005 sets out the requirements for a food safety management
system and can be certified to. It maps out what an organization needs to do
to demonstrate its ability to control food safety hazards in order to ensure
that food is safe. It can be used by any organization regardless of its size or
position in the food chain.
Framing of Regulations
Certification of FSMS (Food Safety
Management Systems) of Food Businesses
Data Collection and Management for Food
Safety
Awareness of Food Safety and Standards
Food Business Licensing and Registrations
Food Safety Trainings
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BRC Standard
BRC Global Standards is a leading safety and quality certification
programme, used by over 23,000 certificated suppliers in 123 countries,
with certification issued through a worldwide network of accredited
certification bodies.
The Standards guarantee the standardisation of quality, safety and
operational criteria and ensure that manufacturers fulfil their legal
obligations and provide protection for the end consumer. BRC Global
Standards are now often a fundamental requirement of leading retailers like
Walmart, Tesco etc.
Bottlenecks in Food Industry Food industry is little tricky compared to other industries as there are
thousands of different products which needs different type of equipment’s,
plant set-up, processing and packaging methods. Investor should make
them aware through extensive market survey, demand-supply gap for the
product which he wants to manufacture. It is dependent on agriculture i.e.
on nature; natural calamities may hamper raw material supply.
1. Post-harvest Wastage
One of the major challenges faced by the sector is the significant post-
harvest wastage of agricultural produce, particularly in fruits and
vegetables. Such wastage may be minimized by creating an efficient system
of transportation, storage and product delivery, and by increasing the level
of processing of agricultural produce.
2. Variation of APMC Act Apart from infrastructure constraints, the food processors face problems in
procurement of raw materials for processing due to restrictive provisions in
marketing of agricultural produce. An issue often highlighted by food
processers is the variation in the operation of the APMC Act in different
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states. Most states require food processors to register for direct marketing
with the respective marketing committee at multiple locations, but some
states allow singlepoint registration. Some states exempt food processors
from paying mandi tax on agricultural produce purchased for inputs inother
states; other State of Indian Agriculture 2015-16 states charge mandi tax at
the point of consumption. Some states exempt perishables from mandi tax.
For the purpose of charging mandi tax, processed agricultural produce like
ghee, besan, maida, etc. is being treated at par with primary agricultural
produce, although these processed products are purchased by food
processors from processing units like dal mill, flour mill, dairy, etc. The
MoFPI has been engaging various stakeholders to identify problems faced by
the processing sector and the areas of intervention. There is an urgent need
to address these issues to ensure hassle-free procurement of raw material
by food processors.
3. Process able variety of F & V Another major constraint faced by food processors is the lack of availability
of processable varieties of fruits and vegetables, due primarily to the
inadequate linkage between production and processing. This is often
addressed through a system of contract farming between food processors
and farmers. Some states permit contract farming, but a number of states
are yet to notify the rules. Food processors also face difficulty in terms of
registration at multiple locations. In some states, registration for contract
farming has been provided with the Marketing Committee whereas in others,
the contract has to be registered with the state level Nodal Agency. A few
states have exempted the market fee on purchases under contract
agreements, while some states have exempted partially. Other states require
buyers to render a bank guarantee for the entire value of the contracted
produce. There is a need to streamline the contract farming system for the
benefit of both farmers and food processors.
Policies on the stocking and movement of agricultural commodities play a
major role in ensuring the availability of adequate raw materials for food
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processors. Agricultural commodities are produced in specific parts of the
country—production is dependent on topographical and climatic
conditions—but demand is countrywide. Hence, there is a need to move
agricultural produce from supply centres to various processing and
consumption centres in the fastest possible way at minimal cost. The
provisions of the Essential Commodities Act are enforced to regulate the
production, manufacturing and distribution of essential commodities in
India. The Act allows states to issue orders in cases of malpractice like
hoarding and black marketing. However, policies on stocking and movement
of agricultural commodities often have not been found stable—there are
sudden restrictions on stock limits that make it difficult for processing
industries to plan their purchase of raw material. There is a need to
distinguish between hoarding and stocking of goods by genuine
processors/exporters.
Some corporate entities operating in the food processing sector have
successfully organized farmers, and supply farm inputs and provide training
on crop practices. They have also entered into arrangements for procuring
agricultural produce from farmers and agreed to a price. The farmer is
assured of a reasonable return, and the processer is assured of adequate,
timely supply of raw materials of the required quality, with no further
intermediation. This kind of collaboration is critical for the success of the
food processing industry in India because of the peculiar nature of
landownership. Effective tie-ups across the value chain will translate into
assured supply of adequate inputs, efficient agri practices, monitoring of
quality and minimization of cost and reduction of wastage.
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Introduction The Indian food –processing industry is primarily export oriented. India’s
geographical situation gives it the unique advantage of connectivity to
Europe, the Middle East, Japan, Singapore, Thiland, Malaysia and Korea.
One such example indicating India’s location advantage is the value of trade
in agriculture and processed food between India and Gulf region. Various
products, such as tomato puree, canned fruit, frozen fruit, frozen vegetables
and ginger-garlic pastes, gained popularity among Indian consumers.
Frozen and canned/preserved food products are proving to be better
alternatives to fresh foods due to the convenience of storage and usage they
offer. Demand for fresh, chilled and processed fruits and a vegetable is also
increasing in modern retail. Even some small retailers have started keeping
refrigerators to stock frozen peas or corn. This trend is likely to continue
over the forecast period and will help drive sales and penetration of
processed fruits and vegetables in India.
The food processing sector has attracted USD 5,285.66 million FDI during
April 2012 to December 2015 period.
Growth Drivers
Liberalization and the growth of organized retail have made the Indian
market more attractive for global players. With a large agricultural
sector, abundant livestock and cost competitiveness, India is fast
emerging as a sourcing hub of processed food.
4. WHY TO INVEST IN FOOD INDUSTRY
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Increasing desire for branded food as well as increased spending
power has made the food processing industry a vital sector.
Favourable economic and cultural transformation and a shift in
attitudes and lifestyles have consumers experimenting with different
cuisine, tastes and new brands. There is an awareness and concern
for wellness and health, for high protein, low-fat, wholegrain, organic
food.
Processed food exports and related products have been rising steadily,
the main destinations being the Middle East and Southeast Asia.
India is a global outsourcing hub, with large retailers sourcing from
India owing to abundant raw materials, supply and cost advantages.
A population of 1.2 Billion people, with the world’s highest youth
population – India has 572 Million people under the age of 24. These
are the groups that indulge more on processed food and beverage
consumption.
Rising Disposable Incomes: There is sharp increase in the number
of working couples, which has led to higher disposable incomes.
This has aided the affordability of packaged foods.
Booming modern retail: Government has approved 100% FDI would
be allowed through FIPB route in marketing of food products
produced and manufactured in India. Hence food retail may boom in
coming future.
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Increased Package Foods Indian food consumer market is mostly dominated by Fresh or unpackaged
foods. However, increasing urbanization, income levels, educated and
working women are driving a gradual shift towards packaged foods. Several
segments such as tea, coffee, salt, pulses and spices, that have traditionally
been sold loose, are seeing an increasing penetration of packaged products.
For mass market penetration beyond upper income households, the greatest
challenges will be to ensure affordability of these products and generating
awareness around benefits. Greater consumer awareness of the better
quality, safety and nutrition impact of these products will drive increased
penetration. Consumers need to be convinced to pay a small premium for
the intangible, non-monetary benefits. Nowadays trend of packaged milk,
eggs, flour, fruit juices is also increasing not only these products but also
traditional products like pickles, papad, instant breakfast and chutaneys
are being consumed in packaged formats.
Lifestyle Changes
Nuclear Families & Working Woman
Urbanization
Factors for growth of Food Industry
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Advantages of India
I. India is one of the largest food producers in the world.
II. India has diverse agro-climatic conditions and has a large and
diverse raw material base suitable for food processing companies.
III. India is looking for investment in infrastructure, packaging and
marketing
IV. India have huge scientific and research talent pool.
V. Well-developed infrastructure and distribution network.
VI. Rapid urbanisation, increased literacy, changing life style, increased
number of women in workforce, rising per capita income- leading to
rapid growth and new opportunities in food and beverages sector.
VII. 50 per cent of household expenditure by Indians is on food items.
VIII. Strategic geographic location (proximity of India to markets in Europe
and Far East, South East and West Asia).
Investment Opportunities
Fruits and Vegetables
Preserved, candied, glazed and crystallized fruits and vegetables, juices,
jams, jellies, purees, soups, powders, dehydrated vegetables, flakes, shreds
and ready-to-eat curries.
Food preservation by Fermentation
Wine, Beer, Vinegar, The preparation of yeast, Alcoholic beverages.
Beverages
Fruit-based and Cereal-based.
Dairy
Liquid Milk, Curd, Flavoured Yoghurt, Processed Cheese, Cottage Cheese,
Swiss cheese, Blue Cheese, Ice Cream, Milk-Based Sweets.
Food additives and Nutraceuticals
Confectionery and Bakery
Cookies and Crackers, Biscuits, Breads, Cakes and Frozen Dough.
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Meat and poultry
Eggs, Egg Powder, Cut Meats, Sausages, and other value added products.
Fish, Seafood and Fish Processing
Grain Processing
Oil Milling Sector, Rice, Pulse Milling and Flour Milling Sectors.
Food Preservation and Packaging
Metal Cans and Aseptic Packs.
Food processing Equipments
Canning, Dairy and Food Processing, Specialty Processing, Packaging,
frozen food/refrigeration and Thermo-Processing.
Consumer Food
Packaged Food, Aerated soft drinks and packaged drinking water.
Spice Pastes
Supply Chain Infrastructure
Integrated Cold Chain Infrastructure Creation
Food Parks
Business Plan Preparation of business plan is first step for investing, for preparing
business plan professional needs to be hired or an entrepreneur himself can
make his business plan. Following things needs to be considered while
preparing business plan:
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Following are some of the major reasons for NPA in food and agro sector
companies.
Poor Working Capital Management
Lack of Raw Material Feasibility Study
Diversion of Short Term funds to Long Term
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Winning Consumer Trust “Consumers have a right to expect that the foods they purchase and
consume will be safe and of high quality.” – Food and Agriculture
Organisation of the United Nations Quality and safety of food is top most
concern of todays consumers. PwC and FICCI jointly conducted a consumer
survey study and release a report “Winning Consumer Trust”. This study
focuses on understanding the consumers’ perspective on various aspects of
food quality and safety. The major findings of the survey include the
following
Expiry date, health (nutritional composition) and brand are the most
important factors considered by consumers while deciding which
processed food products to buy.
The consumer buying behaviour towards the overall processed
packaged food industry remains more or less unchanged over the past
six months. It is noteworthy that wherever there was indication
towards decrease in consumption, the major reasons were concern
over food safety and quality of the products.
Consumers perceive safety and quality as synonymous
characteristics—a quality product is bound to be safe and vice versa.
Brand name, followed by ingredient information and referral from
friends and family emerged as the top three factors that define trust
for consumers in the quality and safety of processed food products.
It is a common consensus among consumers that the government and
food processing companies need to take further measures to ensure
food safety and quality.
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Government Initiatives in Agriculture FDI Policy in Agriculture
India’s FDI policy aims to attract investment in technology, machinery,
equipment, seeds and planting material, warehousing and cold storage and
other components of infrastructure logistics. It complements the public and
private investment necessary to bring knowledge, technologies and services
to farmers. 100% FDI has been allowed in the development and production
of seeds and planting material, floriculture, horticulture and cultivation of
vegetables and mushrooms under controlled conditions, and in tea
plantations, coffee plantations, rubber plantations, cardamom plantations,
palm oil tree plantations and olive oil tree plantations.
Farmer Producer Organisation
Member based FPOs offer a proven pathway to successfully deal with a
range of challenges that confront farmers today, especially small producers.
Overcoming the constraints imposed by the small size of their individual
farms, FPO members are able to leverage collective strength and bargaining
power to access financial and non-financial inputs and services and
appropriate technologies, reduce transaction costs, tap high value markets
and enter into partnerships with private entities on more equitable terms.
FPOs can provide essential goods and services to the rural poor, besides
their own members, and contribute significantly to the process of rural
poverty alleviation. They are also increasingly seen as an important link in
the risk mitigation strategy to overcome the challenge of climate change.
They have been found to positively impact research priorities through
participation and closer feedback to scientists, besides providing valuable
inputs to policy formulation by channeling the opinions of the farming
community. The XII Plan document approved by the Planning Commission,
in the Chapter on Agriculture, strongly endorses the promotion of FPOs as a
means of linking farmers to agri value chains.
5. INCENTIVES AND INITIATIVES
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The Union Finance Minister, in his Budget Speech for 2013-14, announced
two major initiatives to strengthen the funding viability of the FPOs: 1.
Government will provide a matching Equity Grant of upto Rs.10.00 Lakh to
double the share capital of FPOs. 2. A Credit Guarantee Fund with a corpus
of Rs.100.00 Crore will be created in SFAC to provide cover to financial
institutions which lend to FPOs without collateral.
Government Initiatives in Agro-Food Industry The Ministry of Food Processing Industries (MOFPI) is a ministry of the
Government of India responsible for formulation and administration of the
rules and regulations and laws relating to food processing in India. The
ministry was set up in the year 1988, with a view to develop a strong and
vibrant food processing industry, to create increased employment in rural
sector and enable farmers to reap the benefits of modern technology and to
create a surplus for exports and stimulating demand for processed food
following are some of flagship schemes of Ministry of Food Processing
Industries.
FPO
Financial & Technical (Credit, Savings, Insurance &Extension)
Input Supply (Seed, Fertilizer)
Marketing Linkage (Contract Farming, Procurement under MSP)
Training & Marketing (HRD)
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Mega Food Parks
The Scheme of Mega Food Park aims at providing a mechanism to link
agricultural production to the market by bringing together farmers,
processors and retailers so as to ensure maximizing value addition,
minimizing wastage, increasing farmers’ income and creating employment
opportunities particularly in rural sector. The Mega Food Park Scheme is
based on “Cluster” approach and envisages a well-defined agree/
horticultural-processing zone containing state-of-the art processing facilities
with support infrastructure and well-established supply chain.
8 Mega Food Parks namely Patanjali Food and Herbal Park, Haridwar, Srini
Food Park, Chittoor, North East Mega Food Park, Nalbari, International
Mega Food Park, Fazilka, Integrated Food Park,Tumkur, Jharkhand Mega
Food Park, Ranchi, Indus Mega Food Park, Khargoan and Jangipur Bengal
Mega Food Park, Murshidabad are functional as on 31.05.2016. (source:
mofpi)
With a view to promote investment in Mega Food Park, Ministry of Finance
has covered Food Park including Mega Food Park under Infrastructure
category. Till date ministry has sanctioned 34 Mega Food Parks out of these
8 are under operation and rest under implementation.
The scheme envisages a onetime capital grant of 50% of the project cost
(excluding land cost) subject to a maximum of Rs. 50 crore in general areas
and 75% of the project cost (excluding land cost)subject to a ceiling of Rs. 50
crore in difficult and hilly areas i.e. North East Region including Sikkim,
J&K, Himachal Pradesh, Uttarakhand and ITDP notified areas of the States.
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Integrated Cold Chain
The scheme aims to facilitate the establishment of a strong cold chain
facility for agricultural, horticultural, dairy, fish & marine, poultry & meat
products by establishing linkage from farm gate to the consumer, end to
end, to reduce losses through efficient storage, transportation and minimal
processing. The different components of the Cold Chain projects are as
under: Minimal Processing Centre at the farm level and centres is to have
facility for weighing, sorting, grading waxing, packing, pre-cooling,
control Atmosphere (CA)/ Modified Atmosphere (MA) cold storage,
normal storage and Individual Quick Freezing(IQF).
Mobile pre-cooling vans and reefer trucks.
Distribution hubs with multi products and multi Control Atmosphere
(CA)/ Modified Atmosphere(MA) chambers/ cold storage/ Variable
Humidity Chambers, Packing facility,Cleaning in Process (CIP) Fog
treatment, Individual Quick Freezing (IQF) and blast freezing.
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Irradiation facility
Financial assistance(grant-in-aid) of 50% the total cost of plant and
machinery and technical civil works in General areas and 75% for NE region
including Sikkim and difficult areas (J&K, Himachal Pradesh and
Uttarakhand) subject to a maximum of Rs.10 crore.
As on 31.10.2016 ministry has sanctioned 131 cold chain projects since
2011, some of them is already in operation and rest are in progress.
Additional 100 cold chain projects is being sanctioned for which ministry
has already invited application in November 2016.
Modernisation of Abattoir
This is a comprehensive scheme, which includes establishment of modern
abattoirs and modernization of existing abattoirs. Modernisation of abattoirs
will also include up scaling of infrastructure of existing abattoirs. The
scheme is implemented with the involvement of local bodies (Municipal
Corporations and Panchayats)/ Public Sector Undertakings/Co-
Operatives/Boards under Government and has flexibility for involvement of
private investors on PPP basis
The scheme envisages a grant of 50% of the cost of plant and machinery and
technical civil work and other eligible items subject to a maximum of
Rs.15.00 Crores in general areas and 75% of the cost of plant and
machinery and technical civil work and other eligible items subject to a
maximum of Rs. 15.00 Crores in difficult areas (NE states including Sikkim,
Jammu & Kashmir, Himachal Pradesh, Uttarakhand and Integrated Tribal
Development [ITDP] notified areas of the States) per abattoir.
40 projects from different states sanctioned as on 31.10.2016 with total
investment of Rs. 766.86 some of them are completed and some under
implementation
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Apart from above major schemes MoFPI is promoting Setting Up/ Up-
gradation of Quality Control/ Food Testing Laboratory, Implementation of
HACCP/ ISO 22000, ISO 9000/ GHP/ GMP Etc, Research & Development in
the Food Processing Sector, skill development in food processing sector.
Special Fund by NABARD Government of India instituted a special fund of Rs. 2000 crore during
2014-15 for providing direct term loan at affordable rate of interest to the
designated food parks (DFP) and food processing units in DFP. This special
fund allocated with view to stimulate growth of food processing sector on
cluster basis in the country to reduce wastage of agriculture produce and to
create employment opportunities especially in rural areas.
MINISTRY OF MICRO, SMALL & MEDIUM ENTERPRISES
1. Financial assistance on marketing support under Marketing Assistance Scheme
Activities
A.Organizing Exhibitions abroad and participation in International
Exhibitions/Trade Fairs
B.Co-sponsoring of Exhibitions organized by other organisations/ industry
associations/agencies
C.Organizing Buyer-Seller Meets, Intensive Campaigns and Marketing
Promotion Events
2. Financial Assistance Up to 95% of the airfare and space rent of entrepreneurs. Assistance is
provided on the basis of size and the type of the enterprise. Financial
assistance for co-sponsoring would be limited to 40 % of the net
expenditure, subject to maximum amount of Rs. 5 lakh
3. Prime Minister Employment Generation Programme (PMEGP) The maximum cost of the project/unit admissible under manufacturing sector is Rs.25 lakh and under business/service sector
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is Rs.10 lakh.
Categories of beneficiaries under PMEGP
Beneficiary’s contribution (of
project cost)
Rate of Subsidy (of
project cost) Area (location of project/unit) Urban Rural
General Category 10% 15% 25%
Special (including SC / ST / OBC / Minorities / Women, Ex-servicemen, Physically
handicapped, NER, Hill and Border areas, etc.
05% 25% 35%
4. Credit Guarantee Fund for Micro and Small Enterprises
The credit facilities which are eligible to be covered under the scheme are both term loans and working capital facility up to Rs.100 lakh per borrowing unit, extended without any collateral security or third party guarantee, to a new or existing micro and small enterprise.
Make Food in India
Prime Minister Narendra Modi’s “Make in India” campaign to revive
manufacturing will become a success only if the government manages to
convince companies to manufacture in India. The key decision factors for
manufacturers are (a) size of market and access to market (b) good
infrastructure (c) availability of skills (d) stable and competitive fiscal regime
and (e) ease of doing business.
The government’s “Make in India” initiative aims to increase the share of
manufacturing to 25 percent of GDP by 2022 from the current 12 percent.
This is expected to result in the creation of 100 million jobs.
According to make in India campaign following are the major reason to
invest in Indian food processing sector:
1. A Rich Agriculture Resource Base-India was ranked No. I in the
world in 2013 in terms of production of Arecanut, Bananas, Castor oil
seed, Chick peas, Chillies & Peppers dry, Ginger, Lemons & limes,
Mangoes, Mangosteens, guavas, Millet, Okra, Papayas, Pigeon peas,
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Meat- buffalo, Milk-whole fresh buffalo & goat, Ghee, butter oil of cow
milk, Ghee of buffalo milk, sesame seed. ranks second in the world in
the production of Anise, fennel, coriander, beans-dry, cabbages and
other brassicas, cauliflower & broccoli, Egg plants (aubergines),
Garlic,
Groundnuts with shell, Lentil, Onions dry, Peas green, Potatoes,
Pumpkins, Squash and Gourds, Rice/Paddy, Safflower seed, Sugar
cane, Tea, Tomatoes, Wheat, Meat-goat, Milk whole fresh cow.
Further, India is at third position in the production of Cashew nuts,
with shell, Coconuts, Lettuce and chicory, Nutmeg, mace and
cardamoms, Pepper (piper spp.), Rapeseed.
2. The Countries gross cropped area amounts to 194.39 million
Hectares, with cropping intensity of 139%. The net irrigated area is
66.10 million hectare in 2012- 13(P).
3. A total of 127 agro-climatic zones have been identified in India.
Strategic geographic location and proximity to food-importing nations
makes India favourable for the export of processed foods.
4. Extensive network of food processing training, academic and research
institutes.
5. 42 Mega Food Parks (MFP) are being setup with an investment of USD
2.38 billion. The parks have around 1250 developed plots with basic
enabled infrastructure that entrepreneurs can take on lease for the
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setting up of food processing and ancillary units. As on 25.07.2016,
out of 42 MFP projects 8 projects have been operationalised.
6. The cost of skilled manpower is relatively low as compared to other
countries.
7. Attractive fiscal incentives have been instated by central and state
governments and these include capital subsidies, tax rebates,
depreciation benefits, as well as reduced custom and excise duties for
processed food and machinery.
8. Major global players in the food domain are already present in India.
9. 134 cold chain projects are being setup to develop supply chain
infrastructure. As on 22.07.2016, out of 134 Cold Chain Projects 87
projects have been completed
10. The Government of India allows 100% FDI under the automatic
route in the food processing sector, in agri-products, milk and milk
products, and marine and meat products
11. Automatic approvals are provided for foreign investment and
technology transfer in most cases. Units based on agri-products that
are 100% export-oriented are allowed to sell up to 50% in the
domestic market. There is no import duty on capital goods and raw
material for 100% export-oriented units. Earnings from export
activities are exempt from corporate tax. Additionally, there is 100%
tax exemption for five years, followed by 25% tax exemption for the
next five years, for new agro-processing industries.
Tax Exemptions and other Benefits
Service Tax
Services of pre-conditioning, pre-cooling, ripening, waxing, retail
packing, labelling of fruits and vegetables have been exempted from
Service Tax (Full Exemption Ref. Service Tax notification No.
25/2012- Service Tax dated 20th June 2012 as amended by
Notification 3/2013 dated 1st March 2013 and 6/2015 dated 1st
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March 2015 issued under Section 93 Chapter V of the Finance Act,
1994- Power to grant exemption from service tax).
Exemption to transportation of 'food stuff' by rail, or vessels or road
will be limited to transportation of food grains including rice and
pulses, flours, milk and salt only. Transportation of agricultural
produce is granted full exemption (Ref. Service Tax notification No.
25/2012- Service Tax dated 20th June 2012 as amended by
Notification 3/2013 dated 1st March 2013 and 612015 dated 1st
March 2015 issued under Section 93 Chapter V of the Finance Act,
1994- Power to grant exemption from service tax).
1. SERVICE TAX:
Negative List
Service tax is not liveable on items contained in the Negative List.
Services including processes carried out at an agricultural farm
including tending, pruning, cutting, harvesting, drying, cleaning,
trimming, sun drying, fumigating, curing, sorting, grading, cooling or
bulk packaging and such like operations which do not alter the
essentials characteristics of agricultural produce but make it only
marketable for the primary market.
The following services are covered under exempted category from
service tax:
Construction, erection, commissioning or installation of original works
pertaining to post-harvest storage infrastructure for agriculture
produce including cold storages for such purposes. (Ref. Service Tax
notification No. 25/2012- Service Tax dated 20th June 2012 as
amended by Notification 3/2013 dated 1st March 2013 and 6/2015
dated 1st March 2015 issued under Section 93 Chapter V of the
Finance Act, 1994- Power to grant exemption from service tax.)
Mechanised Food grain handling system, machinery or equipment for
units processing agricultural produce as food stuff excluding alcoholic
beverages. (Ref. Service Tax notification No. 25/2012- Service Tax
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dated 20th June 2012 as amended by Notification 3/2013 dated 1st
March 2013 and 6/2015 dated 1st March 2015 issued under Section
93 Chapter V of the Finance Act, 1994- Power to grant exemption from
service tax.)
Services of loading, unloading, packing, storage or warehousing of
agricultural produce. (Ref. Service Tax notification No. 25/2012-
Service Tax dated 20th June 2012 as amended by Notification 3/2013
dated 1st March 2013 and 6/2015 dated 1st March 2015 issued
under Section 93 Chapter V of the Finance Act, 1994- Power to grant
exemption from service tax.)
Services of pre-conditioning, pre-cooling, ripening, waxing, retail
packing, labeling of fruits and vegetables. (Ref. Service Tax notification
No. 25/2012.. Service Tax dated 20th June 2012 as amended by
Notification 3/2013 dated 1st March 2013 and 6/2015 dated 1st
March 2015 issued under Section 93 Chapter V of the Finance Act,
1994- Power to grant exemption from service tax.)
Services provided by National Centre for Cold Chain development
under Department of Agriculture, Cooperation and Farmers Welfare,
Government of India by way of knowledge dissemination. (Ref.
Notification No. 9/2016-Service Tax dated: 1st March, 2016).Services
provided by a goods transport agency, by way of transport in a goods
carriage of agricultural produce, foodstuff including flours, tea, coffee,
jiggery, sugar, milk, products, salt and edible oil, excluding alcoholic
beverages. (Ref. Notification No. 3/2013- Service Tax, Para (1-V)
Dated: 1st March, 2013).
2. For generating more employment, an amendment regarding eligibility
threshold of minimum 100 workmen has been reduced to 50, is made
in the provisions of section 8OJJAA of the Income-Tax Act (w.e.f.
01/04/2016). The entry "waters, including mineral waters and
aerated waters, containing added sugar or other sweetening matter or
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flavoured" in the Seventh Schedule to the Finance Act 2005 related to
levy of additional duty of excise @ 5% has been omitted.
Income Tax
Deduction in Expenditure Deduction for expenditure incurred on investment is allowed if the
investment is wholly and exclusively for the purpose of any specified
business (details given below). However, this deduction is allowed only for
the investment made in the previous year and prior to commencement of its
operations.
Business allowed 100% deduction (provided the tax payer has commenced
its business on or after 01.04.2016)
Setting up and operating a cold chain facility (not available for expansion of
the unit) Setting up and operating warehousing facilities for storage of
agriculture produce (not available for expansion of unit) (Section 35-AD of
the Income tax Act 196 I).
Business allowed 100% deduction Bee-keeping and the production of honey and beeswax. The setting up and
operation of a warehousing facility for the storage of sugar. (Section 35-AD
of the Income Tax Act 1961, deduction for expenditure incurred on
investment is allowed if this investment is wholly and exclusively for the
purpose).
Deduction of Tax from Profit
This tax incentive is available as 100% tax exemption for the first five
years' of operation, and after that, at the rate of 25% of the profits being
exempted from tax; 30% in case of a company. This benefit is available only
for 10 years for new units (i.e. not formed by splitting up or by way of
reconstruction of an existing business) in the business of processing,
preservation and packaging of fruits or vegetables, meat & meat products,
poultry, marine or dairy products provided such business had commenced
on or after 01.04.2001. (Under Section 80 IB (IlA) of the Income Tax Act,
1961).If any business relating to meat, meat products, poultry, marine
products or dairy products has started after 01.04.2009, the above benefit
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would be available, but not to the unit operating in such business before
01.04.2009. (Under Section 80 IB (IlA) of the Income Tax Act, 1961).
Customs Duty
Government has extended Project Imports’ benefits to the following projects:
Projects for the installation of mechanised food grain handling systems and
pallet racking systems in ‘mandis’ and warehouses for food grains and
sugar. Cold storage, cold room (including for farm level pre-cooling) or
industrial projects for preservation, storage or processing of agricultural,
apiary, horticultural, dairy, poultry, aquatic and marine produce and meat.
Consequently, all goods related to Food Processing, imported as part of the
project, irrespective of their tariff classification, would be entitled to uniform
assessment at concessional basic Customs Duty (Ref. Notification
No.12/2012 - CUS dated 17.03.2012).
Concessional Basic Customs Duty as presently available under project
imports for cold storage, cold room (including for farm level pre-
cooling) also extended for 'cold chain including pre-cooling unit, pack
houses, sorting and grading lines and ripening chambers' from 10% to
5%.
I. Customs Duty on Hazelnuts has been reduced from 30% to 10%.
(Ref. Notification No. 12/2013-Customs dated: 01.03.2013).
II. Customs Duty on De-hulled Oat Grains has been reduced from
30% to 15%. (Ref. Notification No. 12/2013-Customs dated: 1st
March, 2013).
III. Customs Duty on Refrigerated containers has been reduced from
10% to 5%. (In the Budget 2016-17).
Central Excise Duty
Food Products Nil excise duty in milk, milk products, vegetables, nuts &
fruits- both fresh and dried. Against a standard excise duty of 12%,
processed fruits and vegetables carries a merit rate of 2% without CENVAT
or 6% with CENVAT. Soya milk drinks, flavoured milk of animal origin also
carry a duty of 2% without CENVAT or 6% with CENVAT.
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Food Processing Machinery Excise duty on machinery for the preparation of meat, poultry, fruits, nuts
or vegetables and on presses, crushers and similar machinery used in the
manufacture of wine, cider, fruit juices or similar beverages and on packing
machinery is reduced from 10% to 6% in budget 2014-15.All refrigeration
machinery and parts used for the installation of cold storage, cold room or
refrigerated vehicles for the preservation, storage, transport or processing of
agricultural, apiary, horticultural and marine produce as well as dairy and
poultry, are exempt from excise duty. (Ref. Notification No. 12/2014- Central
Excise dated: 11th July, 2014).
Pasturing, drying, evaporating etc. machinery used in Dairy sector is
exempted from excise duty. (Ref. Notification No. 12/2012-Central Excise
dated: 17th March, 2012).Excise Duty on Machinery including refrigerated
containers has been reduced from 12.5% to 6%. (In the Budget 2016-17).
Nil excise duty on capital goods and spares thereof, raw materials, parts &
material handling equipments for cargo vessel of various kinds including
refrigerator vessels for the transport of meat, fruit or the like. (Ref.
Notification No, 12/2016- Central Excise, Dated: 1st March, 2016).
Nil excise duty on floating factories of all kinds (for processing whales,
preserving fish or the like), whale catchers. (Ref. Notification No. 12/2016-
Central Excise, Dated: 1st March, 2016).Nil excise duty on trawlers and
other fishing vessels. (Ref. Notification No. 12/2016- Central Excise, Dated:
1st March, 2016).
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THE WAY FORWARD Contract and Contact Farming
Innovating managerial solution to make agriculture sustainable rather
than relying solely on modern farming to raise productivity and
production is need of the day.
65 years of independence and still our farmers are committing suicide
this needs to be thought seriously with root cause analysis. Why a
farmer commit suicide reason is obvious due to economic burden. But
how farmer gets trapped into this economic burden here are some
reasons in-sufficient rain fall, other natural calamities, price
fluctuation in market, crop failure due to pest, post-harvest losses,
lower productivity, higher cost of production. For first two reasons
what we all could do is water conservation, water budgeting; Crop
insurance is another way to protect farmer from the natural
calamities. Rest all reasons are products of inefficient supply chain
and access to information.
For agri-input like seeds, fertilizers farmer has to depend on whatever
his input dealer is recommending he is not getting aware himself what
suits his soil, soil testing is not there which results in excessive use of
fertilizers means higher cost of production.
Average land holding is very less in India when a small and marginal
farmer buys agriculture machinery on bank credit in that case he
works for bank for repayment of loan with his less farmland which
could not repay loan which ultimately result into economic burden.
Indian farmer is way behind of world average productivity due to lack
of technological advancement, high yielding genetically modified crops
(GM) can boost this productivity.
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Farmers are producing and pushing in market whatever will be
demand and price trend. Demand forecasting is completely absent in
India.
With his whole year extensive hard work when he is ready with
harvest and sell his produce then middleman frauds with him.
The agro-food supply chain can be strengthened with the help of
information technology (IT). Demand forecasting of each commodity
with help food processing Industry and consumption pattern of each
commodity needs to be carried out and made available to farmers. We
are importing 60% of our edible oil requirement whereas we are
overproducing sugarcane. We are top producer of fruits and vegetable
in world and other hand Indian juice manufacturers imports 60%
tomato puree, orange concentrate, pineapple concentrate etc.
Processing of fruits and vegetables needs to be increased to reduce
post-harvest losses and utilize maximum produce.
Farmers need to be made aware themselves which product has good
market and can be sold domestic and international market. Food
processing industry can play intermediary role here. Cold storage and
warehouse should be available online so that farmers/traders can
store their produce.
Farmers should get direct access to the processor to know their raw
material specification; good agriculture practices needs to be
implemented. Creation of farmers group or converting into Producer
Company is required so that they can afford hi- tech agriculture
machinery and utilize it fully among the group.
If agriculture input manufacturer want to launch new crop variety or
agro-chemical he should able to access farmer with lesser cost and
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efforts. Regional farmers group should be created on dedicated web
portal which will be used for information sharing.
Worldwide organic produce market is growing and these products
doesn’t need expensive chemical fertilizers which not only helps in
lowering economic burden but also fetch higher price and pesticides
but Indian farmers doesn’t know whom to approach and where to get
this certification.
Agri-input manufacturer – Farmers - Processor needs to be brought on
a common platform and campaign of “Contact Farming” should be
launched nationwide. With this food industry will get their raw
material in domestic market and after processing they sell in domestic
and overseas market.
The “Make in India” concept will definitely boost the food processing
industry of India, as the industry is one of the most upcoming sectors
in India and needs vital and genuine push to be the leader in the
global stature.
Agri-Input Manufacturer
FarmerContact Farming
Processor