Economic Policies and Government Initiatives Fuelling India's Food Processing Industry

Abstract The food processing sector in India is experiencing rapid expansion, driven by government initiatives, policy support, and increasing global demand. The Ministry of Food Processing Industries (MoFPI) has implemented key programs such as the Pradhan Mantri Kisan Sampada Yojana (PMKSY) and the Production-Linked Incentive Scheme for Food Processing Industry (PLISFPI) to promote investment, modernization, and supply chain development (MoFPI, 2023). These policies aim to enhance domestic manufacturing, improve export potential, and create employment opportunities. India's food processing market is projected to reach $535 billion by 2025, with an estimated compound annual growth rate (CAGR) of 15.2% (Invest India, 2024). The food processing industry plays a pivotal role in bridging Indian farmers with both domestic and global consumers, contributing to 12.22% of employment in the registered manufacturing sector and 14.18% in the unregistered segment (NSSO, 2016). As of September 2023, multiple projects have been sanctioned under PMKSY, including Mega Food Parks, Cold Chain initiatives, Agro-Processing Clusters, and Food Testing Laboratories (MoFPI, 2023). The government is also working towards making India a global hub for ‘Shree Anna’ (millets) (Government of India, 2024). India’s agricultural and processed food exports have shown significant growth. In FY 2022-23, exports reached $51 billion, with major destinations including the USA, Bangladesh, UAE, and Vietnam (UN Comtrade, 2024). The country remains a leading global producer of milk, eggs, fruits, and vegetables. Horticulture production reached 351.92 million metric tons (MT), while milk production stood at 221.06 MT, marking an annual growth rate of 5.29% (FAO, 2024). Seafood exports reached a record high of $8.09 billion, while non-basmati rice emerged as the top agricultural export, with shipments totaling $4.66 billion under the APEDA basket (DGCIS, 2024). The PLI scheme is expected to drive an expansion of INR 30,000 crore in food processing capacity and generate approximately 2.5 lakh direct and indirect jobs by 2026-27 (MoFPI, 2023). Foreign direct investment (FDI) in the food processing sector has also increased, with cumulative FDI inflows reaching $12.354 billion as of September 2023 (DPIIT, 2024). The Indian government permits 100% FDI through both automatic and government approval routes, further supporting investment and technological advancements in the industry.