Gujarat, one of the most developed states of India, offers diverse set of investment opportunities in food processing sector. A bird’s eye view of potential projects for investments opportunities in food processing sector in Gujarat is presented here.

Gujarat, located on the Indian Peninsula’s western coast, is the nation’s most industrialized state. It shares borders with Rajasthan and Madhya Pradesh, Maharashtra, and the Union Territories Daman and Diu, Dadra and Nagar Haveli. The Arabian Sea borders the state to both the west- and south-west. The state’s coastline is 1600 km long and contains many natural harbours. It also hosts large ports such as Kandla or Mundra, which are the largest private ports in India, it is well connected with the rest of India.

Why Gujarat

  • Gujarat accounts for the largest share in the total investments in the food processing sector of India.
  • Gujarat is keen to promote the agro-processing industry.
  • Gujarat has 51 dairy plants, the second-highest in the country, besides known for its brand ‘Amul.’
  • Gujarat’s 1600 km long coastline, which is broken by several bays, inlets, estuaries and marshy lands, is available for fishing activities.

Raw material Base

Gujarat is one of the most developed states of India. Its agricultural strength lies in its diverse climate, robust marketing infrastructure and enterprising farmer base. More than half of the state’s land is under cultivation. Gujarat’s agricultural economy is shifting towards high-value crops such as cotton, groundnuts, fruits, vegetables, condiments, and spices. Gujarat is the largest producer of groundnuts in the country and the third-largest producer of milk.

Major Strength for Food Processing Sector in Gujarat:

  • Seed Spices- Cumin, Fenugreek and Fennel
  • Medicinal crops- Psyllium (Isabgol)
  • Pulses- Pigeon Pea(Tur Dal) , Gram
  • Coarse cereals- Pearl millet
  • Oilseeds- Groundnut

Food Grains production

Total production of 62.33 lakh MT of food grains

  • Wheat – 2.4 million tonnes
  • Pearl millet – 790 thousand tonnes
  • Pigeon pea (Tur Dal)- 237 thousand tonnes

Horticulture products production

Total production of 216 lakh MT of horticulture products

  • Fruits – 8.2 million tonnes
  • Vegetables – 12.6 million tonnes
  • Spices – 0.72 million tonnes

Livestock production

  • Total production of 122 Lakh MT of milk, ranked second in milk production
  • 8.82 million milch animals in the state as per 19th livestock census
  • Gujarat’s contribution in the National Marine Fish production is 20% in the year 2014-15 and its share in the GDP of the State is around 0.84 %
Food Processing Sector in Gujarat
Source: Department of Agriculture Cooperation & Farmers Welfare, Ministry of Agriculture, Department of Animal Husbandry, Dairying & Fisheries, Ministry of Agriculture.

Production Clusters

The major production clusters for Food Processing Sector in Gujarat are given below:

Banana: Anand, Vadodara, Bharuch, Narmada
Pearl Millet: Banaskantha, Kheda, Bhavnagar, Anand
Mango: Kutch, Surat, Navsari, Valsad
Papaya: Kutch, Vadodara, Tapi, Bharuch
Fennel: Surendranagar, Mehsana, Banaskantha, Patan
Milk: Surendranagar, Mehsana, Banaskantha, Patan
Groundnut: Banaskantha, Sabarkantha, Bhavnagar,Junagarh
Tomato: Banaskantha, Mehsana, Ahmadabad, Anand

Geographical Indication for Agricultural Products in Gujarat

 Gir Kesar Mango
 Bhalia Wheat

Agriculture marketing

Gujarat has the following marketing facilities in the state:

o Food Processing Units: More than 30,000 units in Food Processing Sector in Gujarat are operating providing employment to over 1 million people.
o Agri-Export Zones: Total of 20 agri-export zones, with focus on mango and vegetables and sesame seeds have been identified by the State Government, 15 for Mango and Vegetables and five for sesame seeds
o There are 194 Agriculture Produce Market Committee (APMC) market yards and sub-market yards in the state.
o 560 cold storage and fish processing units with capacity of 20,30,873 MT
o 207 warehouses across 45 centers
o One irradiation unit in Bavla, Gujarat
o One Air cargo complex for Food exports
o Delhi Mumbai Industrial Corridor which passes over Gujarat

Clusters of Food Processing Sector in Gujarat
Source: Food Safety and Standards Authority of India (FSSAI) – Central and State Licence

Processing Clusters

Fish Processing: Veraval, Bhavnagar
Psyllium (Isabgol) Husk Processing: Mehsana, Patan
Fruits & Vegetables Processing: Ahmedabad, Valsad
Milk Processing: Vadodara, Rajkot, Anand
Cereals Processing: Gandhinagar, Anand, Bharuch
Prepared Foods: Amreli, Bharuch, Mehsana
Bakery Products: Amreli, Bharuch, Ahmedabad
Rice Mills: Ahmedabad, Surat

Famous ethnic foods of Gujarat:

o Dhokla: Made with a fermented batter derived from rice and split chickpeas
o Khakhra: Made from Vigna aconitifolia( Moth Bean), wheat flour and oil.
o Doodhpak: Rice pudding made from milk, rice, saffron and nuts, accompanied by bread

Dairy Sector in Gujarat

o Gujarat is one of the largest milk producing states in India with the contribution of 7.75% share in the total milk production of India.
o The state having 17 Cooperative dairy milk unions & 25 private dairy plants has a milk collection of 3.45 billion liters with over 3million milk producers, affiliated to more than 15,000 Primary Milk Cooperative Societies.
o Milk contributes to 22% to the Agricultural GDP of Gujarat and is one of the biggest sectors for supporting livelihood in the state.

There are more than 10,000 companies in Food Processing Sector in Gujarat. An indicative of key companies and their district of presence in the state is given below.

Dairy products and Analogues:
Amul Dairy, Anand
Mother Dairy, Gandinagar
G T Foods, Vadodara

Salts, spices, soups, sauces, salads:
National Foods, Vadodara
Hindustan Food, Valsad
Lotus Foods, Bhuj

Modern, Ahmedabad
Atul, Surat
Super, Vadodara

Gujarat Infrastructure Clusters for Food Processing
Source: Ministry of Food Processing Industries

State Government Initiatives

The vision of Gujarat’s comprehensive Agro Business Policy is “To ensure food and nutritional security; and economic empowerment to the people through accelerated yet sustainable growth in agriculture”. The main objectives of the Agri-business Policy 2016-2021 are:

  • To increase investment opportunities in food processing and agricultural industries
  • To increase agricultural production and productivity
  • To increase farmers’ income
  • To create more employment opportunities in rural areas through agribusiness
  • To provide the best training for skill development in the field of agribusiness
  • To increase processing and reduce wastage
  • To increase their exports by maintaining high standards of agricultural produce
  • To give highest priority to food security and nutritional security
  • To promote agricultural practices that preserve the environment
  • To give advance opportunity to youth and women in agro business

Eligible Sectors are:

  • Fruits and vegetables Processing
  • Milk products
  • Cereal/other consumer food products
  • Meat, Poultry, Fishery
  • Oilseeds products
  • Non edible agriculture produce
  • Rice and Flour milling
  • Pulse processing
  • Agri Waste Processing Units
  • Honey and Bee Keeping
  • Infrastructure Projects: CA Cold Storages, Food Irradiation Processing Plants, Cold Chain, Silos, Pack houses, Food Parks, Logistics Park, Reefer Vans etc.
  • Other such Agri-horticultural sectors including food flavors and colors, oleoresins, spices, coconut, mushrooms and hops

Highlight of Gujarat’s Comprehensive Agro Business Policy

Nodal Department: Gujarat Agro Industries Corporation, Ltd. (GAIC)

Capital Subsidy: Provided by Government of India

Reimbursement on Transportation

Subsidy of 25% to 40% of air freight paid subject to maximum INR 10 Lakhs per year per unit will be granted to export any fresh or processed products from the cargo complex at Ahmedabad international airport. If samples are required to be sent, then the subsidy would be 25% of freight capped at INR 5 lakhs per annum Subsidy of 25%-40% of actual Sea freight pegged at a maximum of INR 15 lakhs per year, for a maximum period of 5 years.

Interest Rebate/Subsidy

Back ended interest subsidy @ 7.5% on the term loan with the maximum amount of INR 1.5 Crores for five years for setting up/expansion/diversification 1% additional subsidy to SC/ST, Physically challenged, Woman entrepreneurs, and entrepreneurs below the age of 35 Years.

Stamp duty and Reg. fee exemption

50% reimbursement of stamp duty/registration fee paid on sale/lease/transfer of land and 100% reimbursement of 100% of stamp duty/registration fee for the setting of agro infrastructure projects

Electricity Duty Exemption

100% reimbursement for electricity duty paid for 5 years conterminous basis with power tariff subsidy

Technology up-gradation and R&D related Incentives

Assistance to R&D institutions established by GoG or with GoI participation for equipment and machinery or modernization of existing labs or setting up of new labs Assistance for contracts/approved research work from SME industrial enterprise to recognized R and D institute/technical colleges approved by AICTE

Potential Investable Projects for Food Processing

There are numerous investment opportunities in food processing sector in Gujarat. Below is a list of possible projects for food processing sector in Gujarat investments:

IQF Fish and Shrimp
This project is vital as the state government is trying to create new infrastructure and projects to increase shrimp and fish production. As production grows, there will be more need for processing facilities. IQF is one such process.

Whey and Casein Products
Gujarat is the largest milk producer, and diary units are developing products based on milk, but not traditional products. It will increase the demand for milk

Cold Chain Terminal Market and Multi-modal Logistics Park
Terminal Markets are an essential part of the agricultural marketing system. They provide services to both agricultural growers as well as buyers of agricultural products. Terminal market links to several collection centers located at key production centres. It allows farmers easy access to marketing their produce.

Biodegradable Packaging for Food Products
Bioplastics can be used to replace fossil fuel-based plastics. They are becoming more common in Food Contact Materials (FCMs).

Cold Storage Unit for Fresh Onions
The following parameters must be considered when storing onions for long periods of time (optimal storage range of relative humidity 65%- 70%, temperature between 25o C and 30o C): bulb size, cultivation practices, harvest timing, removal tops, drying, packing, storage conditions, drying, grading, packing, etc.

High-Tech Dairy Farming Unit
This project aims to establish a high-tech dairy unit in the Kutch region with a significant potential for raw material supply and demand. 

Maize Value Added Unit
Based on Gujarat’s raw material strength, the project envisions setting up a Maize Value-Added Manufacturing Unit. The unit will be able to focus on marketing, production, and exports.

Storage Silos at Gujarat
The three types of silos proposed will be built: viability gap funding (VGF), with or without VGF coverage, and through the Central Warehousing Corporation/Central Railside Warehousing Corporation/state government-owned agencies.

Grain Handling & Storage
The project will see the construction of a mechanized system for grain handling and storage silos to handle the unloading and loading of food grains at ports. It also addresses post-harvest storage. This system will help maximize the export potential and ensure that the grains are handled according to international standards.

Peanut Butter Manufacturing Unit
This project is about setting up an export-oriented manufacturing unit for peanut butter in Gujarat. Explore the possibility of contract manufacturing peanut butter for private labels or firms exporting to other countries.

Hand-Picked Groundnut Processing Unit
The project envisages the establishment of a Hand-Picked and Selected Groundnut Processing Unit based on Gujarat’s raw material strength. The unit will be responsible for cultivation, processing, packaging and export.

Health Drink Manufacturing Plant
The project envisages the establishment of a Health drink manufacturing plant that can be used for production, packaging, and export.

De-hulled Sesame Seed and Roasted Sesame Oil Unit
The project envisages the establishment of De-hulled Sesame Seed Oil Unit and Roasted Sesame Oil Unit, which will focus on production, processing, packing, export, and so forth.

Units for fruit processing (Chickoo and Mango, etc.)
The project envisions the establishment of a fruit processing unit that uses the available raw material in the state, such as mango, chickoo and pomegranate. The unit could produce pulp, squash/ juices jam and jellies, pickles or other products.

Baker’s Yeast Manufacturing
Based on Gujarat’s raw material strength, the project envisions establishing a Baker’s Yeast Manufacturing Unit. The unit could be used for marketing, production, and export.

Neem/Tobacco oil-based pesticide unit
This project will see the establishment of a unit for bio-pesticides based on natural raw materials such as Neem and Tobacco that are readily available in Gujarat. This unit will be equipped with the necessary facilities to extract oils and formulate the bio-pesticide.

Medical Herbs Extraction Unit
Consider the possibility of setting up a Medicinal Herbs Extraction Unit based upon the available raw material in Gujarat. These units could be focused on marketing, production, and exports.

Instant Vegetables in Retort Pouches
The project proposes to set up a unit for making instant vegetables in retort pouches from Gujarat. These pouches are used to pack Ready to Eat foods (RTE), which provide longer shelf life and preserve food at room temperature without refrigeration.

Castor Base Perfumery Raw Materials Unit
This project will see the establishment of a Castor oil derivatives unit to make perfumery raw materials. Gujarat is a significant producer of Castor oil, making this a very attractive proposition.

Banana Fibre Extraction and Textiles Production Unit
Based on the availability of raw material, the project envisions establishing a Banana Fibre Extraction unit for Textiles Production. The manufacturing unit should be able to focus on marketing, production, and exports.

Freeze Dried Fruit Processing Unit
This project envisions the establishment of a Biodegradable Packaging for Food Products Manufacturing Unit, based on locally available raw materials. The unit will be responsible for marketing, production, and exports.

Cattle Feed Manufacturing and Processing Unit
This project will establish a Cattle Feed manufacturing and processing facility in Gujarat. Gujarat has a lot of dairy units, so there is a high demand for this quality product.

Fish Farms in PPP mode
The project envisions the development of government fish farms through Public-Private Partnership (PPP), based on local raw materials like marine fishing and inland shrimp farming.

Organic Milk, Milk Product Manufacturing and Processing Unit
A unit for the production of organic milk and other milk products in Gujarat is proposed. This project will integrate modern animal husbandry and a modern milk processing plant to produce a range of organic products. It is designed to ensure that the milk remains uncontaminated by air and human hands. The whole process will be automated in a sealed vacuum environment.

Seaweed Culture
This project aims at creating seaweed culture due to the high demand for fertilizer and pharmaceutical markets and the availability of seaweed.

Shrimp Aqua Culture
This project will establish Shrimp Aqua Culture due to the high potential for production, raw material availability, and demand in the food market. Because of their universal appeal, unique taste and high unit value, shrimps are often called “Pinkish Gold”. They are in high demand on the international market.

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This article was derived or obtained from multiple sources, including information on the websites of KPMG, state government, MoFPI, and CII. Any information, ideas or opinions presented here should not be taken as professional advice. Before taking any action or making any decision based on this article, readers are advised to exercise their discretion and seek professional guidance.