Food and Drink Overview

By UK India Business Council (UKIBC)

The UK India Business Council (UKIBC) is the Department for International Trade’s (DIT) business partner for India. From April 2018, UKIBC has taken over responsibility for the Food & Drink sector strategies and its day to day activities from DIT. We promote UK’s F&D sector in India and create awareness about Indian F&D sector opportunities in the UK.

The Indian food and drink industry is currently valued at GBP 193 billion. It is the world’s sixth largest food and drink industry, with retail contributing 70% of the sales. It is certain to witness strong further growth with a projected CAGR of 19% between the years 2017-20.

The key growth drivers that resulted in such strong domestic demand in the Indian Food & Drink sector are favourable macro socio-economic indicators including favourable demographics, growing disposable income, urbanisation, organisation of retail industry along with changing consumer tastes and preferences and their increasing spend on value added products.

The food and drink market is characterised by strong domestic demand, rising exports, increasing investments, and government support. Further, the liberalised foreign direct investment (FDI) policy and reforms have resulted in the development of the production, processing, distribution and marketing of F&D sector in India. Between April 2000 and June 2017, the Indian food processing sector received FDI worth GBP 5.95 billion, making it the 13th largest sector receiving FDI in the country. Thus, the sector has emerged as a high-growth and high-profit sector due to its immense potential for value addition.

Government of India Initiatives

The Government of India has started initiatives to support the food and food processing sectors in improving and growing in the Indian market. Some of the major initiatives are:

  • The government has permitted 100% Foreign Direct Investment (FDI) in marketing of food products, and their e-commerce through automatic route along with offering of various incentives at central and state government level
  • According to the Union Budget 2017-18, a Rs. 8,000 crore (GBP 913.7 million) worth dairy processing infra fund was set up by the Government of India
  • The Food Safety and Standards Authority of India (FSSAI) also plans to invest around Rs 482 crore (GBP 55.05 million) to strengthen the food testing infrastructure in India, by upgrading 59 existing food testing laboratories and setting up 62 new mobile testing labs across the country
  • The Ministry of Food Processing Industries announced a scheme for Human Resource Development (HRD) in the food processing sector. It is being implemented through State Governments under the National Mission on Food Processing. The scheme has the following four components:
    • Creation of infrastructure facilities for degree/diploma courses in food processing sector
    • Entrepreneurship Development Programme (EDP)
    • Food Processing Training Centres (FPTC)
    • Training at recognised institutions at State/National level

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