Department of Industrial Policy Ministry of Food

and Promotion Processing Industries

Food Processing
Sector
Achievements Report

December 30, 2016

MAKE IN INDIA
Table of Contents
07
03 Skil Development
Introduction

07
Ease of Doing
Business
04
Policy Initiatives
& Investments
`
`

05
Creation of
Infrastructure
` 06
Credit Support for
Food Processing
Industry
 Department of Industrial Policy and Promotion
03
Ministry of Commerce and Industry
Introduction
The Food Processing sector in India, a sunrise
sector, is poised for immense growth and
greater contribution to the world food trade.
The sector has witnessed a number of
initiatives undertaken by the Government since
June 2014 primarily aimed at scaling up
infrastructure for storage and transport, tackling
the issue of food wastage in the country and
creating value addition that will benefit both
producers and consumers in the country
through facilitating domestic and foreign
investment in the sector. The growth rate of
Gross Value Added (GVA) in food Processing
industries has increased from 1.91% in 2013-
14 to 5.78% in 2014-15 at constant prices.1
India is the largest producer of milk and
second largest producer of a variety of
fruits and vegetables in the world. However,
food is being wasted at the harvest point and
during transportation. India witnesses nearly
4.6 - 15.9 % wastage in fruits and vegetables
annually, due to lack of modern harvesting
technologies and cold chain infrastructure. The
wastage levels in other perishables are also
significantly high; 5.2 % in inland fish, 10.5 % in
marine fish, 2.7 % in meat and 6.7 % in
poultry.2
1. Data from MoFPI
2. Make In India Opportunities in Food Processing Sector Report by
MoFPI, CII & Yes Bank
Ministry of Food Processing Industries
To tackle this critical issue, Government is
sanctioning and operationalizing more cold
chain infrastructure in the country with the
objective of reducing food wastage by 50%
over next 2 years. In addition, by opening up
the sector, the Government is keen to bring in
advanced technology into the supply chain
thereby combating the losses incurred during
the value chain.
The food industry, which was valued at USD
39.71 billion in 2013 is expected to grow at a
Compounded Annual Growth Rate (CAGR) of
11 percent to USD 65.4 billion by 2018. The
Indian food and grocery market is the
worlds sixth largest, with retail contributing
70 percent of the sales. Food has also been
one of the largest segments in India's retail
sector, which was valued at USD 490 billion in
2013. The Indian food retail market is expected
to reach USD 894.98 billion by 2020.3
Similarly, the online food ordering business in
India is in its nascent stage, but witnessing
exponential growth. The organized food
business in India, which is worth USD 48
billion, of which food delivery is valued at USD
15 billion, has a huge potential.4
3,4 Ministry of External Affairs -
http://indiainbusiness.nic.in/newdesign/index.php?param=indust
ryservices_landing/337/1
 Department of Industrial Policy and Promotion Ministry of Food Processing Industries
04
Ministry of Commerce and Industry

Policy Initiatives & Investments

` `
FDI Policy Major Investments & FDI Inflows

100 % FDI under government approval route for The sector has witnessed FDI equity inflow of
trading, including through e-Commerce for Food USD 1.16 billion5 during April 2014 to
Products produced and manufactured in India September 2016. Some of the major FDI equity
(June 2016) inflow are listed below:

Fiscal Incentives FDI

Equity
100 % Income tax exemption to food processing Foreign Indian
Country Inflow
Collaborator Company
units on profits for the first five years of operation (in USD
million)
and 25 % thereafter for next 5 years (Budget
Anik Milk
2015-16). B.S.A. Products
Belgium 73.72
International Private
Reduction of Excise Duty (Budget 2016-17): Limited
Refrigerated containers from 12.5% to 6% Ferrero Ferrero
International Luxembourg India Pvt. 31.34
Machinery for food processing and packaging S.A Ltd.
has been reduced from 10% to 6%
Nivesh Cavin Care
Pasteurizing, drying, evaporating, etc. Investments Mauritius Private 25.47
Limited Limited
machinery used in Dairy Sector is exempted
from Excise Duty. Modern
Food
Everfoods Asia
Reduction of Basic Customs Duty (from 10%): Singapore Enterprises 24.52
Pte Ltd
Private
5% Basic Custom Duty is available under Limited
project imports for Cold Storage, Cold Chamber Ferrero
Ferrero S.P.A Italy India Pvt. 24.32
and Cold Chains including pre-cooling unit,
Ltd.
pack house, sorting and grading lines and
ripening chambers (Budget 2016-17).
Kellogg Kellogg
U.S.A 23.97
Service tax exempted on pre-conditioning, pre- Company India Pvt Ltd

cooling, ripening, waxing and retail packing,

labelling of fruits and vegetables. Service tax
Kerry
exemption also given for transportation of food Kerry Group BV Netherlands Ingredients 21.53
grains including rice and pulses, flours, milk and India Pvt Ltd

salt by rail, vessels or road (Budget 2015-16).

5. Data received from DIPP FDI Cell

 Department of Industrial Policy and Promotion
05
Ministry of Commerce and Industry
Creation of Infrastructure
Cold Chain Infrastructure
Out of the 134 Cold Chain Projects sanctioned
88 have been operationalized. 51 Cold Chain
projects have been completed since June 2014,
a 38% increase as compared to 29 projects
completed during June 2012-May 2014. This
cold chain capacity expansion benefits 500
farmers per project in fruits & vegetables and
5000 farmers per project in dairy/meat/marine.
The total capacity created in cold storage,
controlled/modified atmosphere storage and
deep freezer is 3.31 Lac MT based on 88
completed Cold Chain Projects since 2008,
including capacity addition of 77.15 MT/hour for
Individual Quick Freezing, 31.80 Lac litres/day
for milk storage and 423 Reefer Carriers.
The capacities created by 51 cold chain projects
completed since June 2014 are:
Milk processing (in LLPD) - 23.50
Individual Quick Freezing (IQF) (MT/Hr)- 55.95
Ministry of Food Processing Industries
Mega Food Parks
The Governments Scheme for Infrastructure
Development provides State-of-the-Art
infrastructure for Mega Food Parks. The
scheme has a provision of Grants-in-aid @50%
of the eligible project cost in general areas and
@75 % in difficult areas subject to a maximum
of 50 crore. Government has sanctioned 42
Mega Food Parks out of which eight have been
operationalized. 6 Mega Food Parks were
operationalized in between May 2014 to May
2016. Each mega food park is expected to
create direct & indirect employment to about
5,000-6,000 persons and benefit approx.
25,000-30,000 farmers.
12 Lac MT of actual processing and
preservation capacity has been created through
schemes of Mega Food Parks and Cold Chain.
The value of processed and preserved produce
would be 3000 crores.
Cold Storage (In Lakh MT) - 1.52
Reefer Trucks (Nos.) - 262
Department of Industrial Policy and Promotion
Ministry of Commerce and Industry
Setting Up/Modernization of Abattoirs
16 Abattoirs approved during June 2014 to
May 2016
4 Abattoirs projects have been completed
between June 2014 and May 2016. The
details are given in the following table:
# Name of the Promoter
Kolkata Municipal
1 Corporation, Kolkata, West
Bengal
Greater Hyderabad Municipal
2 Corporation, Hyderabad,
Andhra Pradesh
Greater Vishakhapatnam
3 Municipal Corporation ( PPP
Project)
Goa Meat Complex ( Govt. of
4 31.05.2016
Goa undertaking)
Quality Testing- Food Labs
Along with enhancing capacity, the Government
is focused on Quality Assurance in the sector.
The scheme for Quality Assurance and Codex
Standards ensures safety and quality of food
products with the analysis of the samples
received from food processing industries and
other stakeholders. As part of a major overhaul
of the testing infrastructure, the two years since
June 2014 have witnessed a 20.81%
increase in the amount of funds released (INR
61.42 crores, 168 projects assisted) for setting
up of Food Testing Laboratories as compared to
June 2012 to May 2014 (INR 50.81 crore
Ministry of Food Processing Industries 06
released, 128 projects assisted). In the past two
years, 19 Labs have obtained NABL
accreditation, 11 have been newly set up,8 have
been upgraded and 26 new projects have been
approved.
Credit support for Food Processing Industry
Special Fund in NABARD
Date of
Completion A Special Fund in NABARD worth INR 2,000
crore, designated as Food Processing Fund,
01.09.2014
was set up in budget 2014-15 for providing
affordable credit to food processing units in
28.01.2015 Mega & Designated Food Parks. The fund was
set up to provide loans for a period of 7 years at
09.12.2015 concessional interest rates of 8-9%. Loans are
being provided for Mega Food Parks,
Designated Food Parks and Food Processing
Units location therein. Up to July 2016, NABARD
has sanctioned a loan for INR 504.6 crore in 12
Mega Food Park projects and INR 40.12 crore
has been disbursed under the fund.
Priority Sector Lending
As per notification dated April 23, 2015, Food
and Agro-based processing units and cold chain
projects have been classified under agriculture
activities as Priority Sector Lending, subject to
aggregate sanctioned limit of INR 100 crores per
borrower from the banking system, which will
ensure greater flow of credit to entrepreneurs for
setting up of food processing units for further
augmenting capacity.
Department of Industrial Policy and Promotion
Ministry of Commerce and Industry
Ease of Doing Business
A Food Map identifying surplus and deficit
areas of various agricultural and horticulture
produce in the country has been developed
and made available on the Ministrys website.
This will aid investors in identifying availability
of raw materials in various regions of the
country.
To facilitate Single Window Clearance for
customs, online connectivity has
established between Customs
Government Partner Agencies such as Food
Safety and Standards Authority of India
(FSSAI), Department of Plant Protection,
Quarantine and Storage (DPPQ&S), Drug
Controller (CDSCO), Animal Quarantine
(AQCS), Wild Life Crime Control Bureau
(WCCB) and Textile Committee. Clearances
can now be obtained online and no hard copy
of No Objection Certificate (NOC) is required
for clearance of goods thereby reducing dwell
time and cost of doing business. This facility
is currently available at Jawaharlal Nehru Port
Trust, Tughlakabad Inland Container Depot
(ICD), and Patparganj ICD.
A Single Window Facilitation Cell has been
set up by MoFPI since May 17, 2016 for
addressing queries, facilitating and hand
holding foreign investors investing in the food
processing sector in India.
Invest India, the investment promotion agency
of the Government has also created a
Ministry of Food Processing Industries 07
HelpDesk for this sector. 1590 queries have
been answered as of July 2016.
Streamlining of processes:
Online processing of claims has been
setup for release of grants under the
Scheme on Mega Food Park to bring in
more transparency and speed in release of
grants to the projects.
Launch of an online system for food
been
licensing and registration of Food Business
and
Operators, which includes online and real
time registration of ESIC and EPFO,
provision for online payment of EPFO and
ESIC contributions. Requirement of bank
account for registration with EPFO and
ESIC has been eliminated.
Application Forms of all the schemes currently
being implemented by Ministry of Food
Processing Industries have been simplified.
A Committee of Independent Monitors has
been set up by MoPFI to hear grievances of
investors/promoters and make
recommendations for redressal of grievances.
All grievances are responded within 30 days.
Skill Development
Increasing investments in the sector have led to
higher demand for more qualified people. The
Government has set up a Food sector skill
council called Food Industry Capacity & Skill
Initiatives (FICSI), which has 46 affiliated
Training Partners and 192 Training Centers
across 26 States in the country.
Department of Industrial Policy and Promotion Ministry of Food Processing Industries 08
Ministry of Commerce and Industry

The two institutions under the administrative

control of MoFPI, i.e. National Institute of Food
Technology Entrepreneurship and Management
(NIFTEM), Haryana and Indian Institute of Crop
Processing Technology (IICPT), Tanjavur, Tamil
Nadu are conducting regular trainings in Food
Processing on self-financing basis & sponsored
funds from others sources including under
Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
FICSI was allocated a target of 30,810 to be
completed by March 2016 (for FY 2015-16).
28,199 persons have enrolled and completed
the trainings. In case of Recognition of Prior
Learning (RPL), target of 14,000 persons was to
be completed by March 2016. FICSI has
allocated 8070 persons to Training Partners and
have completed certification of 496 persons.
National Institute of Food Technology,
Entrepreneurship & Management (NIFTEM),
Kundli, Sonepat is a deemed to be University
under de novo category imparting B.Tech,
M.Tech & Ph.D courses. The institute has
achieved 100% placement of its M.Tech
students who graduated during 2014 & 2016.
Contact Us

Department of Industrial Policy and Promotion,

Ministry of Commerce and Industry,
Udyog Bhawan, Rafi Ahmed Kidwai Marg,
Rajpath Road Area, Central Secretariat,
New Delhi, Delhi 110011
http://www.dipp.nic.in

Ministry of Food Processing Industries,

Panchsheel Bhawan,
August Kranti Marg, Khelgaon,
New Delhi, Delhi 110049
http://www.mofpi.nic.in

Knowledge Partner : KPMG

Building No. 10, 8th Floor, Tower B & C,
DLF Cyber City, Phase II,
Gurgaon, Haryana 122 002
https://home.kpmg.com/in/en/home.html