Food processing can generate $33 bn in funds, 9 mn jobs by 2024: Study
New Delhi, Feb 19 (IANS) The Indian food processing sector has the potential to attract $33 billion of investment and generate nine million person-days of employment by 2024, industry chamber Assocham said on Sunday, citing its study.
“By 2024, food processing sector is expected to employ nine million people in India and expected to generate about 8,000 direct and 80,000 indirect jobs in the state,” the Assocham-Grant Thornton joint study on ‘Food Retail: Investment: Infrastructure’ noted.
According to the study, the Indian food processing industry, whose estimated worth is between $121 billion to $130 billion, is the largest producer of milk, pulses, sugarcane and tea globally and the second largest producer of wheat, rice, fruits and vegetables.
“Despite the massive production, the degree of processing is low and ranges between 2 to 35 percent for different products,” said the Associated Chambers of Commerce and Industry of India.
“India is one of the top rankers in the production of bananas, guavas, ginger, papaya etc., although processing levels in the country remain limited. This indicates an extensive opportunity in the food processing sector,” it added.
According to the study, the share of food processing exports in India’s total shipments was around 12 per cent in the last few years, while during the fiscals 2011-15, Indian exports of processed food related products have been growing at a compund annual growth rate (CAGR) of 23.3 per cent.
With globalisation and increasing trade resulting in about 460 million tonnes of food worth $3 billion being traded annually, the Indian food and retail market is projected to touch $482 billion by 2020, from the level of $258 billion in 2015, Assocham said.
In contrast to consumers in other countries who spend a much lower proportion of their income on food and grocery, these constitute a substantial part of India’s consumption basket accounting for around 31 per cent share in the total, it added.
“Food and grocery is the largest segment in India’s retail sector, with a share of more than 60 per cent in India’s total retail market in 2014,” the statement said.
“India is the world’s second largest producer of food after China. The arable land area of 159.7 million hectares (394.6 mn acres) is the second largest in the world after the US. India has a strong raw material base for the food processing industry,” it added.
Assocham also noted that with the demand for processed food in the country rising due to factors like growing disposable income, urbanisation, young population, nuclear families and changing lifestyle, household consumption set to double by 2020.