Agro-Food Processing – A priority sector for the Government of India with ample potential & opportunities

India’s food ecosystem offers huge opportunities for investment with stimulating growth in the food retail sector, favorable economic policies and attractive fiscal incentives. Through the ministry of food processing industry, the government of India is taking all necessary steps to boost the food processing industry in India. According to reports, it is expected that the Indian food processing market will reach more than 500 billion dollars by 2025, whereas tier-2 and tier-3 cities could mirror the trend visible in metropolitan by consuming more processed foods in the coming years. However, it is now very important to understand the business and export opportunities in the Agro and Food processing sector along with deep insights of various government schemes available. With the same object and handhold SMEs in Agro and Food Processing sector and make them aware of the recent advancement in the sector, Abhyuday Bharat Projects organized a Webinar on 14 March 2022 on ‘Agro-Food Processing business and export opportunities and government schemes’.

The expert panelists of the webinar included Dr. D H Bhrambhatt, ex-IAS, former secretary, Agriculture, Fisheries, Animal Husbandry and Dairying, Govt. of Gujarat; Himanshu Chauhan, chief operating officer, Indi Agro Consortium; Nimesh Sheravia; export-import expert, Dhaval Raval, chairman and managing director, Abhyuday Group; and Sandeep Dave, chief executive officer, Abhyuday Group. The session was moderated by Utsav Jain, communication enthusiast & industry representative.

Sandeep Dave, chief executive officer, Abhyuday Group, started the session with a welcome address and briefly introduced Abhuday Bharat Project. He said, “Abhuday has experience of more than a decade in cluster development and MoFPI schemes. We have done business with more than 21 states including the North-East States and have finished projects of more than 3600 crores with the pipeline of ongoing more than 1000 crores projects to facilitate the hand holding. Abhyuday has expertise in Agro and Food Processing, Textile, Electronics and IT, Defence, and Tourism. The projects done under the PMKSY scheme include over 65 cluster-based projects across Mega Food Parks, Agro-Processing Cluster, Cold Chain Schemes, Creation and Expansion of Food Processing Capacities, Operation Greens (Tomato, Onion, Potato) Projects, and backward and forward linkages. Abhyuday provides support from the Project Conceptualization to the Project Commissioning and to the business development and market linkages. Abhyuday is also empanelled with the Ministry of Food Processing Industry (MoFPI), GoI as a Project Management Consultancy to set up Mega Food Parks.”

Dave stated that there is a need to have a holistic vision and approach while dealing with the Food Processing Industry because the government of India has declared it as a priority sector. “India already has a $535 Billion opportunity by 2025-26, and the sector is directly employing more than 10 million people.”

Role of FPOs in the export market

FPO is a legal entity formed by primary producers, such as farmers, who help farmers connect to the main market. Himanshu Chauhan, Chief Operating Officer of Indi Agro Consortium, shared, “We are one of the largest turnover FPOs in Gujarat and last three years we have done business close to Rs 45 crores by procuring commodities from farmers such as Onions, Wheat, other Pulses and horticulture items like mangoes and vegetables and supplied these commodities to B2B and B2C market.”

While stating the need for FPOs, he underlined that the older models like cooperative for collective farming had not achieved objectives; farming needs are now more aggressive; we need more efficient agriculture as it is a pillar in our national growth story; therefore, FPOs are been seen as a medium of these objectives. Further, he shared that the lack of technical expertise, training and skill is a major challenge impacting quality. Which, according to him, can be managed by developing better infrastructure for better management of produce and storage, investment in capacity building, and proper skill enhancement training.

Immense potential of the Agro-processing sector

In a keynote address, Dr. D H Bhrambhatt, ex-IAS, Former secretary, Agriculture, Fisheries, Animal Husbandry and Dairying, Govt. of Gujarat stated that there is immense possibility for the Agro-Food Processing activities in the country due to growing population and increasing middle and higher middle class. He added, “India is a uniquely placed nation with an intercontinental climate and all types of fruits, vegetables, flora and fauna. A tremendous opportunity is waiting for the country to go for Agro-Processing, export marketing and organic farming because of the growing population. The way we have a family lawyer and family doctor, we need to have family farmers. We should think on the line of Agro-Tourism the way Israel has done. Also, we need the proper packaging, marketing, transportation, and storage system in our country to avoid wastage and support farmers.”

He also urged Abhyuday Group to encourage young entrepreneurs across the country under their flagship program for supporting the Agro-Processing units. “Take maximum benefits of the Government of India policies, go for the organic farming and concept of the family farmer, and support the chain of Agro infrastructure in the rural area. This will not only help the businesses but will also support the rural farmers and economy.”

Food processing sector and export potential

Nimesh Sheravia, export-import expert, emphasized the export potential of the Food Processing sector, “Food Processing sector is a sun rising sector and India’s Food Processing sector is one of the largest in the world. Proactive government policies have increased export. Due to the growing demands of Indian foods worldwide, there is a lot of potential for the Indian food processing sector. The frozen food market is estimated to be around 244 billion dollars in India and it is going to increase by more than 300 billion dollars. There is a wide margin of getting the new entrepreneurs to enter the frozen food and ready to eat segment and increase the potential.”

According to Sheravia, the entrepreneurs should have the right vision, product, quality, packaging, right time, and right guidance to bring the desired result.

Government schemes – A boost for Food Processing Sector

Darshita Parmar, credit analyst in Abhyuday Group informed about the various government schemes introduced under PMKSY yojana supporting the growth of the Agro-Food processing sector and said, “The Pradhan Mantri Kisan Sampada Yojana (PMKSY) has been extended till March 2026 with an allocation of Rs 4,600 crore. It is a comprehensive package that will lead to modern infrastructure with efficient supply chain management from farm gate to retail outlet. The schemes will not only boost the growth of the Food Processing Sector but also help in providing better prices to farmers and creating huge employment opportunities.”

Golden days for the Food Processing Sector

According to Dhaval Raval, chairman and managing director, Abhyuday Group, the Agro-Food Processing sector is growing very well. The Government is also giving prime focus on this sector. He added, “Next two decades will be the golden days for the Food Processing sector. We have the best natural resources for agriculture and thus have advantages over other developed countries. As per the data, the spending on food products is increased by 318 $ billion.”

Emphasizing why to invest in the food processing sector, Raval said, “Anyone who wants to come into the business of the food processing sector, this is the right time to enter. I have seen many projects which started with an investment of 10-15 Crore; now generating a turnover of 300 Crores. We support the projects right from the project conceptualization to the project commissioning to the business development and give quality system support like USFDA, ISO, HACCP, and BRC. I request you all to give your thoughts on investing in the food processing sector because there is a huge market and increasing demand, big volume and handsome profit business, ample raw materials and inclusiveness at every stage.”

Raval also mentioned that Abhyuday had received suggestions from several participants to set up one help desk for the Agro and Food Processing industry to get the backward and forward linkages in the sector. Abhyuday Group is soon going to launch a dedicated Helpdesk for the Agro & Food Processing Industry with an objective to provide special handholding to SMEs in this particular sector.