India to boost food processing sector through US$417m value addition program

INDIA – India has partnered with the World Bank in a US$417million (INR$30 billion) collaborative program that seeks to revolutionize the country’s food manufacturing sector.

According to an Economic Times report, the programme will receive INR15 billion (US$209 million) from the World Bank, INR10bn (US$139mn) from the central government and INR5 billion (US$69.5million) from the state governments.

The program, dubbed ‘India Food Processing and Value Addition Program’ (IFPVAP), will focus on five major food categories including and packaged foods.

IFPVAP will also focus on dairy products, fruits and vegetables, grains and oilseeds, meat and poultry and prepared foods and packaged products such as bakery, papad, snacks and savouries.

According to the Indian Ministry of Food Processing Industries (MOFPI), the initiative will first be piloted in four states ‘which have taken preparatory steps’​. The programme is yet to be approved by the cabinet.

“IFPVAP once launched will cover all States and Union Territories but will be initially rolled out in states which have taken preparatory steps: Andhra Pradesh, Maharashtra, Punjab and Uttar Pradesh,”​ the ministry says.

The programme aims to modernise and enhance the competitiveness of the micro enterprises by supporting the creation of more favourable economic, financial, and regulatory frameworks for the business to thrive.

The five year pilot will target micro enterprises in the food industry that have investment in plant and machinery of less than INR2.5mn (US$34,770).

“The aim is to target small farmers and [MOFPI] will aim to facilitate creation of 60,000 to 70,000 such units within a short time,”​ said Harsimrate Kaur Bada, Union Minister for Food Processing Industries.

“For the next five years employment generation is going to be my focus, especially in rural areas, so that children of farmers do not have to look for employment elsewhere.” ​

The programme comprises four major components; providing an appropriate business environment for food processors, strengthening capacities, enhancing performance and competitiveness and helping with project management, evaluation and knowledge-sharing.

Amongst the major challenges identified by the programme included education, financing and difficult loan processes, out-of-date technology, access to market, raw material availability, gender imbalance in the workforce and more.

Data from the MOFPI places India’s food processing industry as the country’s fifth-largest sector in terms of production, consumption, export and expected growth, making up 32% of the country’s overall food market.

According to the data, the sector also makes up 13% of India’s total exports and some 14% of manufacturing GDP, in addition to attracting 6% of overall industrial investment in the country.

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