In agricultural economies like India, a strong and dynamic food processing sector plays a vital role in the diversification and commercialisation of agriculture, the enhancement of the shelf life of Agri produce, value addition to agricultural produce, the generation of employment, the enhancement of farmer’s income and the creation of markets for the export of Agro Foods.
In an emerging country like India, where growth with equity is a primary policy thrust, the optimum development of the food processing sector would contribute significantly in tackling several developmental concerns, such as disguised unemployment in agriculture, rural poverty, food security, food inflation, improved nutrition and prevention of wastage of food.
By serving as a bridge between agriculture and manufacturing and dealing with the basic needs of all Indian citizens (the assured supply of healthy and affordable food at all locations in the country), this sector has the potential to be a major driver of India’s growth in the coming years.
The food processing sector forms an important segment of the Indian economy in terms of its contribution to its gross domestic product (GDP), employment and investment. The sector constitutes as much as nine and 11 per cent of the GDP in the manufacturing and agriculture sectors respectively.
In the five years ending 2012-13, the food processing industries sector registered an average annual growth rate (AAGR) of around 8.4 per cent, compared to the 3.3 per cent AAGR in the agriculture and 6.6 per cent in the manufacturing sector.