The post-Covid-19 world looks promising for Indian food processing industry. It recalibrates itself to capitalize on increased opportunities in the industry and ears up to capture new markets, a KPMG report on the India’s food processing industry said.
According to the report, the optimism for the industry emanates from the projection of exponential growth in demand for processed food in rural areas and countries Tier 2/3 cities. Moreover, many untapped potentials remain to enhance India’s export to the top 10 food-importing countries globally, where the country has a limited presence.
The report had recommended that government can support the exporters by negotiating Free Trade Agreements (FTAs), lowering Non-tariff barriers (NTBs) and expeditious implementation of Remission of Duties and Taxes on Exported Products (RoDTEP) scheme. This will help in more extensive penetration of Indian value-added food products in bigger global markets.
According to the report, the food processing industry is one of the mainstays of the global economy, with value addition of $ 1.7 trillion. Also, the Indian processed food market is expected to grow to $ 470 billion by 2025 from $ 263 billion (2019-20).
The report titled “Indian food processing industry – growth opportunities post the Covid-19 pandemic” further said that the pandemic had provided an opportunity to the Indian industry to scale. Still, the success would depend on developing high-quality food testing, and certification infrastructure in the country as hygiene needs grow in the post-Covid world.
Innovative products focused on wellness, health, and nutrition are likely to see a massive opportunity in the domestic market. The report said that harping the importance of increasing cold storage capacity in the absence of scalability of perishable products has been a challenge. Moreover, Digitalised Supply chain, Smart warehousing, and logistics using industry 4.0 technologies can help India reduce wastage during storage and transit.
According to KPMG, the pandemic has given rise to a new normal with sustainable food chains, growing preference for healthy food and localized food supply with increased trade barriers.
“In the post Covid-19 era, there is likely to be a surge in non – tariff measures including stringent Sanitary and Phytosanitary Measures (SPSs) and Technical Barriers to Trade (TBT) by major economies to ensure food safety against transmitted chemicals and diseases,” the report said.
It also recommended government partnership with private players through appropriate PPP models to ensure a faster scale-up of quality infrastructure in line with industry requirements.
A coordinated approach is the need of the hour, taking into account opportunities in regional preference in domestic market, exports and quality management systems. National Single Window Clearance System and Project Development Cell are a step toward a coordinated approach.
Inter-Ministerial Body led by MoFPI and with participation from APEDA, MPEDA, FSSAI supported by a Food Processing Council can prove to be a catalyst for industry development at segment/product level, tapping value-added exports and addressing issues and challenges.