Aiming of transforming the Indian food industry by increasing the share food processing from 10 percent to 20 percent in the coming years, the ministry of food processing is stressing on bringing FDI in the sector, while availing number of subsidies to food processors through NABARD to invest in. The ministry will also conduct World Food Summit in Delhi next year to attract more international players. Acknowledging these details, Union Cabinet Minister of Food Processing in Government of India, Harsimrat Kaur Badal spoke to Resturantindia.in during Annapoorna World of Food happening in Mumbai.
What is the investment required in the food processing industry?
The investment requirement is very high because it is the seasonal industry based on the cropping seasons. It is a financially intensive segment, which is why we are giving huge subsidies to encourage the sector. But, a lot more needs to be done which is why we have allowed FDI in food processing to put in place the infrastructure to meet the growing demand.
We don’t see FDI in food processing gaining much traction so far, why is that?
FDI in food processing is almost in the tune of $500mn per year. The recent policy of FDI in multi brand retail of food, which is produced and manufactured in India is really going to make big differences. Once we have the big chains coming in and selling all kind of foods in India, then I think the infrastructure creation will boost faster and it will ultimately benefit the farmer. Out of $600bn total retail industry in India, 11.5 percent is food retail.
What would be your strategies to attract international players to invest in food processing in India?
I am going to different countries and conducting one-to-one meetings with international food retail chains. Ten days back I was in UK where I met top retailers like Tesco, Vetro, Sainsbury, Marks & Spencer and Harrods and everybody has showed huge interest in coming to India. They are looking to tie up with local processors to start-up their operations. They are also looking to source from India.
Our ministry will also be holding World Food Summit in Delhi in the first week of March 2017. The summit will be a platform where we hope to bring national and international players operating in the food retail, processing, machine manufacturing, transportation and logistics and with know how to packaging, organic food to fortifying food.
As part of the Summit there will be the food street where we will introduce taste and palate of India to the world where food retailers will be exposed with diverse Indian food. We will also have international food to show the international players how Indians love the international food before they decide to enter the Indian market.
Foreigners also look at Indian cuisines in a big way like the Indians love pizza and pasta. London city has 52,000 Indian restaurants and Rome has 2000 Indian restaurants. We are looking at transforming the Indian food economy and taking it to the next level, while ensuring that India becomes the food factory of the world.
What is the share of food processing in the entire food industry and by what percentage is it growing annually?
Food processing is a sunrise sector which is ready for exponential growth. Despite all odds in the past, the food processing industry has been growing at 7.2 percent annually compared to the annual 3.3 percent growth of agriculture and 6.6 percent of manufacturing sector.
Out of whole food industry, the food processing is still at the nascent stage of 10 percent, compared to many other small countries like Vietnam, Thailand and Malaysia where food processing is close to 70-80 percent of their food industry.
There are huge opportunities for food processing in the country as we are one of the largest food producers in the world, the largest milk producer, 2nd largest producers of fruits, vegetables and serials and 3rd largest producers of marine. Also, we have one of the largest live stocks in the world.
What is your target of increasing the share of food processing and what are the steps taken?
In next five years when our government will be re-elected, share of processing industry will be closer to 20 percent. Hence, to ensure this we have availed Rs 2000 corpus in NABARD to provide cheaper rate of credit to the food processing industry.
Also, India has the largest wastage; how food processing can be a solution to it?
Not just in the restaurants, but in the food sector too our wastage are among highest in the world. In developed nations the food wastage is 30-33 percent and they waste on the plate. But, in our country where a lot of people sleep hungry, the waste is not on the plate, but in farming, harvesting and transportation.
To stop food wastage the best way is to do more of food processing. The process also holds the key to address many issues which are plaguing our nation today. More the food processing industry grows, more number of food processors will handhold with farmers, will give them the opportunities of modern farming, modern technology, modern know how and scientific implements while ensuring that the farmers get better quality if yields which will ultimately help farming and food industry to earn better profits.
What is the status of 42 mega food parks that the government is suppose to set up?
|At the moment 8 of them have become operational and others are to come up. These parks will have huge impact on the ground. We are also developing 100 cold chains. Thus, to encourage the participation of food processors in the mega food parks they are availed with the credit at cheaper rate of interest from NABARD. The processors will also be availed with incentives in income tax, service tax, and excise duty among other taxes in the processing sector.