India woos UK food and drink processors

By Rick Pendrous

- Last updated on GMT

India opens its gates to inward food processing investment
India opens its gates to inward food processing investment
The Indian government is on a mission to attract overseas investment to meet rising demand for processed foods among its 1.3bn population, which includes a rapidly growing urban middle class. Currently, just 7% of India’s agricultural produce is processed due to lack of facilities, infrastructure and technology.

Last month, the Indian minister for food processing Harsimrat Kaur Badal was in London to meet UK food and drink business leaders.

She highlighted the opportunities for investment in India – a food and grocery market predicted to be worth $915bn by 2020. Her visit followed a similar trade mission to Chicago the month before.

The main purpose of the missions was to encourage participation in World Food India 2017, which takes place in New Delhi from November 3–5.

Attract inward investment

This event, organised by the Indian Ministry of Food Processing Industries in conjunction with the Confederation of Indian Industry, aims to attract inward investment.

At the High Commission of India in London, Badal outlined the huge investments underway by the Indian government and states to improve the food supply chain infrastructure across India.

It includes plans to create 42 ‘mega’ food parks over the next two years (nine are already operational and another four are opening this year) and 231 cold chains, including refrigerated transport (115 are already operational).

“Over the next two years, India is going to be totally ready,”​ said Badal. “Today in India we have very high [25–30% food] waste because of the lack of infrastructure … we are putting up the infrastructure now, but we need the know-how to bring down that waste. Because of the huge population, we have no food to waste.”

Badal said Amazon had already committed to investing about $500M in Indian food e-retail supply chain projects.

Indians spend 40% of their income on food

She added that a growing Indian population was expected to spend 50% more on food over the next five years. On average, Indians spend 40% of their income on food, she reported.

“We are looking at a lot of businesses and processors coming to India to set up food processing in the Indian market, with already an increase of 40% from last year to this year,”​ said Badal.

She added that the government had made doing business in India easier, with the removal of 1,800 old laws and reduced bureaucracy.

Badal said rules restricting the repatriation of profits from inward food processing investment had been relaxed over the past two years under Prime Minister Narendra Modi.

She added that regulatory standards, including those on food safety, were being raised to match those accepted internationally.

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