AGRO AND FOOD PROCESSING INDUSTRY
Indian Institute of Management Indore Post Graduate Programme at Mumbai
Adip Daniel (2013PGPM001)
The agro and food industry plays an important role in contributing to the development of the economy. This industry is particularly seen as a potential source for driving the rural economy as it encourages symbiotic relationship between the consumer, industry and agriculture.
The Indian food services industry has witnessed strong growth over the past few years .Indian food industry currently stands at Rs 247,680 crore (US$ 39.71 billion) and is expected to peg the Rs 408,040 crore (US$ 65.41 billion) mark by 2018, registering a growth of 11 per cent, according to a report titled 'India Food Service Report 2013' by National Restaurant Association of India (NRAI). Domestically spending on food products forms 21% of the gross domestic product of the country(2010 figures).
In terms of consumer spending it takes up 31% share of the consumer's wallet.
In order to ensure the growth potential sector, the Government has initiated extensive reforms. Some of them include amendments to certain existing laws such as amendment of the Agriculture Produce Marketing Committee Act, implementation of the National Horticulture mission etc. To promote investments in this sector, the Government allows 100% FDI in the food processing and cold chain infrastructure segments. In spite of the initiatives taken by the Government, productivity is very low in the country. However, still the industry is showing a strong upward trend, given the rising disposable incomes of a growing population, a greater number of younger people, the growth of consumers in smaller towns and an increased propensity of eating outside home.
With a growing agriculture sector, healthy livestock, and cost competitiveness, India is fast emerging as...