Grant Thornton: By 2047, the share of food processing in the total value of developed countries must quadruple.

According to a report by Grant Thornton Bharat, India’s food processing sector’s share of the country’s gross value added (GVA) needs to quadruple to 7.2 percent to become a developed nation by 2047. Currently, the food industry’s share in gross value is 1.8 percent. The Grant Thornton Bharat report “Vikasit Bharat by 2047: Role of Food Processing Sector” noted that future strategies need to be aligned to achieve the target of 10.4% CAGR by 2047.

India’s food industry is facing many challenges such as food security, sustainability and labor shortages, the report says. India has a large agricultural sector, but it is fragmented and underdeveloped. This leads to problems such as a lack of storage facilities, poor transport infrastructure and high levels of waste. Deficiencies in supply chain infrastructure can lead to inadequate primary processing, storage and distribution capabilities, according to the report.

Implementation of Digitization

Chirag Jain, Partner, Grant Thornton Bharat, presented a comprehensive framework to support the growth of this sector, said, “The 3-I model (Innovation through technology convergence, infrastructure development and investment) is emerging as a strategic framework for the development of the food processing industry. Digitization and the adoption of technology, especially through the Internet of Things, artificial intelligence and blockchain, provide an opportunity for efficiency and cost reduction, which is key to developing a robust infrastructure that includes farm-level pre-processing and a well-integrated cold chain. With the government driving this vision through the Food Production Linked Incentives Scheme (PLISFPI) and other schemes, the 3-I model will revolutionize the food processing landscape in India.

According to the report, important investments are needed in rural infrastructure such as sorting and packing centers, warehouses, transport and testing laboratories. Increasing agricultural production without investing in processing plants can harm farmers’ incomes and strain rural areas. It said it was important to develop strong supply chains linking farmers to processing and marketing, but also stressed the need to strengthen primary processing at the farm level, including sorting/grading, packing, drying, etc., while focusing on improving value addition. According to the report, an integrated cold chain can act as an industrial engine that can transform India’s rural economy.

866 billion dollar market

The report further states that continued investments in the food and processing sector are key to moving India towards its national vision of becoming a developed and influential nation by 2047. Thanks to ongoing investments, the food and processing sector will play a central role in India’s progress towards its national vision of becoming a developed and empowered nation by 2047. The Indian food industry market size was estimated at USD 866 billion in 2022 and is projected to grow at a CAGR of . 7.3 percent from 2022 to 2027 and is expected to reach $1.274 billion by 2027. The share of the food industry in the gross domestic product has increased by 27 percent in the last five years.

Naveen Malpani, Partner-Consumer Industries, Grant Thornton Bharat, said, “India’s food industry, no longer in its infancy, offers an opportunity for transformation that will reduce waste, add value and drive economic growth. Government policy and support are key, but to realize its full potential investments in infrastructure and innovation are needed for realization. By 2047, the goal is to increase its gross value addition and make India a global leader in processed food exports, highlighting its important role in shaping the future of India’s economy.

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