Foreign investment helps drive Indian food processing sector

By Mike Stones

- Last updated on GMT

Related tags: Food processing, Food, Food industry, India

Direct foreign investment in the Indian food processing industry rocketed 175 per cent during 2009-10 to reach $279.33m and now plays an important role in developing the sector, according to the national government.

In 2008-09, foreign investment was $102.64m, confirmed minister for food processing industries Subodh Kant Sahai in a written reply to a Parliamentary question.

Improved quality

Commenting on the significance of the investment, Sahai told domestic publication Business Line: ​"FDI is expected to bring new products, improved quality and new technology in the food processing sector, resulting in higher employment, and reduction in wastage of agri-products​."

Overall, the government estimates that the output of the nation’s food processing sector is increasing at the rate of more than 13% per year.

In a separate development, Sahai praised the initiative of the regional government of Andhra Pradesh in establishing incentives to develop the region’s food processing industry.

Local government plans to set up large food parks dedicated to agro food processing industries and allied industries such as cold storage, food package materials for the food processing industries. This is in addition to supporting the horticulture, animal husbandry and fish processing industries.

National government has pledged to reimburse 25 per cent cost of external infrastructure needed to establish the food park.

Processed locally

Although Andhra Pradesh is a leading producer of fruits, vegetables and other food commodities only between 1-2 per cent of its produce is processed locally.

Meanwhile, a regional food safety commissioner has warned that the Indian food processing industry should improve product standards and packing in order to underpin consumer confidence in its products.

Speaking at a food safety workshop organized by the Confederation of Indian Industry (CII), Manoj Joshi, secretary, health, and commissioner, food safety, Kerala, said existing legislation should be updated to raises safety standards.

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