Food Processing Sector - makeinindia.comProcessing+S… · Make In India Opportunities in Food Processing Sector Report by ... machinery used in Dairy Sector is exempted ... Mauritius

Food ProcessingSector Achievements Report

August 17, 2016*

MAKE IN INDIA

Department of Industrial Policy and Promotion

Ministry of Food Processing Industries

*The report was updated on March 11, 2017

Table of Contents

` Credit Support for Food Processing

Industry

Skill Development

Ease of Doing Business

``

Policy Initiatives & Investments

0 4

Creation of Infrastructure

0 5

0 6

0 7

0 7

The Food Processing sector in India, a sunrise

sector, is poised for immense growth and

greater contribution to the world food trade.

The sector has witnessed a number of

initiatives undertaken by the Government since

June 2014 primarily aimed at scaling up

infrastructure for storage and transport, tackling

the issue of food wastage in the country and

creating value addition that will benefit both

producers and consumers in the country

through facilitating domestic and foreign

investment in the sector. The growth rate of

Gross Value Added (GVA) in food Processing

industries has increased from 1.91% in 2013-

14 to 5.78% in 2014-15 at constant prices.1

India is the largest producer of milk and

second largest producer of a variety of

fruits and vegetables in the world. However,

food is being wasted at the harvest point and

during transportation. India witnesses nearly

4.6 - 15.9 % wastage in fruits and vegetables

annually, due to lack of modern harvesting

technologies and cold chain infrastructure. The

wastage levels in other perishables are also

significantly high; 5.2 % in inland fish, 10.5 % in

marine fish, 2.7 % in meat and 6.7 % in

poultry.2

Food Processing Sector

1. Data from MoFPI2. Make In India Opportunities in Food Processing Sector Report by

MoFPI, CII & Yes Bank

3,4 Ministry of External Affairs -http://indiainbusiness.nic.in/newdesign/index.php?param=industryservices_landing/337/1

03Department of Industrial Policy and Promotion

To tackle this critical issue, Government is

sanctioning and operationalizing more cold

chain infrastructure in the country with the

objective of reducing food wastage by 50%

over next 2 years. In addition, by opening up

the sector, the Government is keen to bring in

advanced technology into the supply chain

thereby combating the losses incurred during

the value chain.

The food industry, which was valued at USD

39.71 billion in 2013 is expected to grow at a

Compounded Annual Growth Rate (CAGR) of

11 percent to USD 65.4 billion by 2018. The

Indian food and grocery market is the

world’s sixth largest, with retail contributing

70 percent of the sales. Food has also been

one of the largest segments in India's retail

sector, which was valued at USD 490 billion in

2013. The Indian food retail market is expected

to reach USD 894.98 billion by 2020.3

Similarly, the online food ordering business in

India is in its nascent stage, but witnessing

exponential growth. The organized food

business in India, which is worth USD 48

billion, of which food delivery is valued at USD

15 billion, has a huge potential.4


Policy Initiatives & Investments

FDI Policy

100 % FDI under government approval route for

trading, including through e-Commerce for Food

Products produced and manufactured in India

(June 2016)

Fiscal Incentives

100 % Income tax exemption to food processing

units on profits for the first five years of operation

and 25 % thereafter for next 5 years (Budget

2015-16).

Reduction of Excise Duty (Budget 2016-17):

‒ Refrigerated containers from 12.5% to 6%

‒ Machinery for food processing and packaging

has been reduced from 10% to 6%

‒ Pasteurizing, drying, evaporating, etc.

machinery used in Dairy Sector is exempted

from Excise Duty.

Reduction of Basic Customs Duty (from 10%):

5% Basic Custom Duty is available under

project imports for Cold Storage, Cold Chamber

and Cold Chains including pre-cooling unit,

pack house, sorting and grading lines and

ripening chambers (Budget 2016-17).

Service tax exempted on pre-conditioning, pre-

cooling, ripening, waxing and retail packing,

labelling of fruits and vegetables. Service tax

exemption also given for transportation of food

grains including rice and pulses, flours, milk and

salt by rail, vessels or road (Budget 2015-16).

Major Investments & FDI Inflows

The sector has witnessed FDI equity inflow of

USD 1.7 billion5 during April 2014 to December

2016. Some of the major FDI equity inflow are

listed below:

5. Data received from DIPP FDI Cell


Foreign Collaborator Country Indian

Company

FDI Equity Inflow(in USD million)

B.S.A. International

Belgium

Anik Milk Products Private Limited

73.72

Ferrero International S.A

LuxembourgFerrero India Pvt.Ltd.

31.34

NiveshInvestments Limited

MauritiusCavin Care Private Limited

25.47

Everfoods Asia Pte Ltd

Singapore

Modern Food Enterprises Private Limited

24.52

Ferrero S.P.A ItalyFerrero India Pvt.Ltd.

24.32

Kellogg Company

U.S.AKellogg India Pvt Ltd

23.97

Kerry Group BV NetherlandsKerry Ingredients India Pvt Ltd

21.53


Creation of Infrastructure

Cold Chain Infrastructure

Out of the 134 Cold Chain Projects sanctioned88 have been operationalized. 56 Cold Chainprojects have been completed since June 2014,a 38% increase as compared to 29 projectscompleted during June 2012-May 2014. Thiscold chain capacity expansion benefits 500farmers per project in fruits & vegetables and5000 farmers per project in dairy/meat/marine.

The total capacity created in cold storage,controlled/modified atmosphere storage anddeep freezer is 3.31 Lac MT based on 88completed Cold Chain Projects since 2008,including capacity addition of 77.15 MT/hour forIndividual Quick Freezing, 31.80 Lac litres/dayfor milk storage and 423 Reefer Carriers.

The capacities created by 56 cold chain projectscompleted since June 2014 are:

Mega Food Parks

The Government’s Scheme for InfrastructureDevelopment provides State-of-the-Artinfrastructure for Mega Food Parks. The schemehas a provision of Grants-in-aid @50% of theeligible project cost in general areas and @75 % indifficult areas subject to a maximum of ₹50 crore.Government has sanctioned 42 Mega Food Parksout of which eight have been operationalized. 6Mega Food Parks were operationalized in betweenMay 2014 to May 2016. Each mega food park isexpected to create direct & indirect employment toabout 5,000-6,000 persons and benefit approx.25,000-30,000 farmers.

12 Lac MT of actual processing and preservationcapacity has been created through schemes ofMega Food Parks and Cold Chain. The value ofprocessed and preserved produce would be ₹3000crores.

Cold Storage (In Lakh MT) - 1.52

Reefer Trucks (Nos.) - 262


Individual Quick Freezing (IQF) (MT/Hr)- 55.95

Milk processing (in LLPD) - 23.50


# Name of the Promoter Date of Completion

1

Kolkata Municipal Corporation, Kolkata, West Bengal

01.09.2014

2

Greater Hyderabad Municipal Corporation, Hyderabad, Andhra Pradesh

28.01.2015

3

Greater Vishakhapatnam Municipal Corporation ( PPP Project)

09.12.2015

4Goa Meat Complex ( Govt. of Goa undertaking)

31.05.2016

Setting Up/Modernization of Abattoirs

• 16 Abattoirs approved during June 2014 to

May 2016

• 4 Abattoirs projects have been completed

between June 2014 and May 2016. The

details are given in the following table:

released, 128 projects assisted). In the past two

years, 19 Labs have obtained NABL

accreditation, 11 have been newly set up,8 have

been upgraded and 26 new projects have been

approved.

Credit support for Food Processing Industry

Special Fund in NABARD

A Special Fund in NABARD worth INR 2,000

crore, designated as Food Processing Fund,

was set up in budget 2014-15 for providing

affordable credit to food processing units in

Mega & Designated Food Parks. The fund was

set up to provide loans for a period of 7 years at

concessional interest rates of 8-9%. Loans are

being provided for Mega Food Parks,

Designated Food Parks and Food Processing

Units location therein. Up to July 2016, NABARD

has sanctioned a loan for INR 504.6 crore in 12

Mega Food Park projects and INR 40.12 crore

has been disbursed under the fund.

Priority Sector Lending

As per notification dated April 23, 2015, Food

and Agro-based processing units and cold chain

projects have been classified under agriculture

activities as Priority Sector Lending, subject to

aggregate sanctioned limit of INR 100 crores per

borrower from the banking system, which will

ensure greater flow of credit to entrepreneurs for

setting up of food processing units for further

augmenting capacity.


Quality Testing- Food Labs

Along with enhancing capacity, the Government

is focused on Quality Assurance in the sector.

The scheme for Quality Assurance and Codex

Standards ensures safety and quality of food

products with the analysis of the samples

received from food processing industries and

other stakeholders. As part of a major overhaul

of the testing infrastructure, the two years since

June 2014 have witnessed a 20.81%

increase in the amount of funds released (INR

61.42 crores, 168 projects assisted) for setting

up of Food Testing Laboratories as compared to

June 2012 to May 2014 (INR 50.81 crore


Ease of Doing Business

• A Food Map identifying surplus and deficit

areas of various agricultural and horticulture

produce in the country has been developed

and made available on the Ministry’s website.

This will aid investors in identifying availability

of raw materials in various regions of the

country.

• To facilitate Single Window Clearance for

customs, online connectivity has been

established between Customs and

Government Partner Agencies such as Food

Safety and Standards Authority of India

(FSSAI), Department of Plant Protection,

Quarantine and Storage (DPPQ&S), Drug

Controller (CDSCO), Animal Quarantine

(AQCS), Wild Life Crime Control Bureau

(WCCB) and Textile Committee. Clearances

can now be obtained online and no hard copy

of ‘No Objection Certificate’ (NOC) is required

for clearance of goods thereby reducing dwell

time and cost of doing business. This facility

is currently available at Jawaharlal Nehru Port

Trust, Tughlakabad Inland Container Depot

(ICD), and Patparganj ICD.

• A Single Window Facilitation Cell has been

set up by MoFPI since May 17, 2016 for

addressing queries, facilitating and hand

holding foreign investors investing in the food

processing sector in India.

• Invest India, the investment promotion agency

of the Government has also created a

HelpDesk for this sector. 1590 queries have

been answered as of July 2016.

• Streamlining of processes:

‒ Online processing of claims has been

setup for release of grants under the

Scheme on Mega Food Park to bring in

more transparency and speed in release of

grants to the projects.

‒ Launch of an online system for food

licensing and registration of Food Business

Operators, which includes online and real

time registration of ESIC and EPFO,

provision for online payment of EPFO and

ESIC contributions. Requirement of bank

account for registration with EPFO and

ESIC has been eliminated.

• Application Forms of all the schemes currently

being implemented by Ministry of Food

Processing Industries have been simplified.

• A Committee of Independent Monitors has

been set up by MoPFI to hear grievances of

investors/promoters and make

recommendations for redressal of grievances.

All grievances are responded within 30 days.

Skill Development

Increasing investments in the sector have led to

higher demand for more qualified people. The

Government has set up a Food sector skill

council called Food Industry Capacity & Skill

Initiatives (FICSI), which has 46 affiliated

Training Partners and 192 Training Centers

across 26 States in the country.

07Department of Industrial Policy and Promotion Ministry of Food Processing Industries

The two institutions under the administrative

control of MoFPI, i.e. National Institute of Food

Technology Entrepreneurship and Management

(NIFTEM), Haryana and Indian Institute of Crop

Processing Technology (IICPT), Tanjavur, Tamil

Nadu are conducting regular trainings in Food

Processing on self-financing basis & sponsored

funds from others sources including under

Pradhan Mantri Kaushal Vikas Yojana (PMKVY).

FICSI was allocated a target of 30,810 to be

completed by March 2016 (for FY 2015-16).

28,199 persons have enrolled and completed

the trainings. In case of Recognition of Prior

Learning (RPL), target of 14,000 persons was to

be completed by March 2016. FICSI has

allocated 8070 persons to Training Partners and

have completed certification of 496 persons.

National Institute of Food Technology,

Entrepreneurship & Management (NIFTEM),

Kundli, Sonepat is a deemed to be University

under de novo category imparting B.Tech,

M.Tech & Ph.D courses. The institute has

achieved 100% placement of its M.Tech

students who graduated during 2014 & 2016.

08Department of Industrial Policy and Promotion Ministry of Food Processing Industries

Contact Us

Department of Industrial Policy and Promotion, Ministry of Commerce and Industry,Udyog Bhawan, Rafi Ahmed Kidwai Marg, Rajpath Road Area, Central Secretariat, New Delhi, Delhi 110011http://www.dipp.nic.in

Knowledge Partner : KPMGBuilding No. 10, 8th Floor, Tower B & C, DLF Cyber City, Phase II, Gurgaon, Haryana 122 002https://home.kpmg.com/in/en/home.html

Ministry of Food Processing Industries,Panchsheel Bhawan,August Kranti Marg, Khelgaon, New Delhi, Delhi 110049http://www.mofpi.nic.in

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Food Processing Sector - makeinindia.comProcessing+S… · Make In India Opportunities in Food Processing Sector Report by ... machinery used in Dairy Sector is exempted ... Mauritius