India’s Processed Food Market to Grow to US$ 470 Billon: KPMG

According to a report released on Thursday by KPMG, the Indian processed food market is projected to expand to US$ 470 billion by 2025, up from US$ 263 billion in 2019-20.

According to the study, the pandemic has established a new standard marked by sustainable food chains, an increasing preference for organic foods, and localised food supply with higher trade barriers.

The report stated that innovative wellness, fitness, and nutrition items are expected to see a lot of traction in the domestic market. The approach to catalysing market development is to embrace a collaborative approach.

It added stating that the government partnerships with private players through adequate PPP models should be taken to ensure a rapid scale up of infrastructure facilities in line with industry demands.

The post-COVID-19 environment plays an essential role for India’s food processing industry, as it reshapes, allowing India to capitalise on new opportunities, optimise its strategy, and prepare for new markets.

According to the report, the government’s Production Linked Scheme (PLI) Scheme is likely to encourage players and improve their processing capacities in order to meet increasing demand.

“Complimentary markets such as ingredients, food processing equipment, food logistics, and food packaging have a great potential. Players, especially MSMEs, would need greater testing and certification infrastructure and improve efficiency and meet hygiene needs on a massive scale.” The report added that the market for processed foods is projected to continue to be driven by rural areas and tier 2/3 cities. As the industry recovers from the effects of COVID-19, the Hotel/Restaurant/Café (HoReCa) segment would be essential.

Major economies are likely to use non-tariff measures such as rigorous sanitary and phytosanitary measures (SPSs) and technical barriers to trade (TBT) to ensure food security against transmitted chemicals and diseases in the post- COVID-19 period.

Across the whole value chain, there has been a noticeable change from non-sustainable to sustainable food systems. The use of organic and bio-ingredients in the food supply chain has also increased steadily. According to the survey, India’s food processing exports have remained steady

India’s exports to the top ten food-importing countries in the world has considerable potential. Fisheries, meat and marine, and dairy are three major prospective segments.

The report stated that negotiating free trade agreements (FTAs), lowering non-tariff barriers (NTBs), and expediting the introduction of duty remission are a few ways that the government can boost exporters.

The report further added that there is a significant need to increase cold storage capacity to boost perishable product scalability. India could eliminate wastage during storage and transit by implementing a digital supply chain, smart warehousing, and logistics using industry 4.0 technologies. With a value addition of US$ 1.7 trillion, the food processing sector is one of the world economy’s standouts.