Q.3. “Indian food processing industry has not grown with the pace of developed countries.” Discuss it.

The Indian food processing industry, despite being one of the largest in terms of production, consumption, and export prospects, has not grown at the same pace as its counterparts in developed countries. Several factors contribute to this disparity:

• Processing Levels: India’s overall processing level of perishable products stands at about 10%, which is significantly lower compared to countries like the USA (80%), France (70%), and Thailand (30%). This indicates a vast potential for growth that remains untapped.
• Infrastructure: The lack of adequate infrastructure, including cold chain facilities, transportation, and logistics, hampers the growth and efficiency of the food processing sector in India.
• Technology Adoption: The adoption of advanced technologies in food processing is slower in India, which affects the quality, safety, and shelf-life of processed food products.
• Investment: The sector has seen lower levels of investment, both domestic and foreign, compared to developed countries. This limits the industry’s capacity for innovation and expansion.
• Regulatory Environment: A complex regulatory environment and bureaucratic hurdles can be a deterrent for entrepreneurs and investors in the food processing industry.
• Supply Chain Inefficiencies: Fragmented supply chains and the predominance of unorganized players lead to significant wastage and inefficiencies.

However, the Indian food processing industry is on a growth trajectory, with the market size expected to reach INR 61,327.5 Billion by 2032, exhibiting a growth rate (CAGR) of 8.8% during 2024-2032. This growth is driven by rapid urbanization, rising consumer preference for processed foods, favourable government initiatives, ongoing technological advancements, and an evolving retail landscape promoting convenient ready-to-eat (RTE) food products.

To match the pace of developed countries, India needs to address these challenges through policy reforms, increased investment in infrastructure, technology upgradation, and streamlining the regulatory framework to create a more conducive environment for the food processing industry’s growth.