Export of processed foods grew to 23.4% in FY23, shows Economic Survey report
Increased focus on the food processing industry is boosting production and exports, cutting down on agri-commodity wastages.
- Jul 22, 2024,
- Updated Jul 22, 2024, 09:53 PM IST
Focus on the food processing industry has begun to yield results. The latest Economic Survey shows that processed food exports from India have grown significantly over the five-year period between 2017-18 and 2022-23. According to the report, the share of processed foods increased to 23.4% in 2022-23 from 14.9% in 2017-18, an increase of 8.5 percentage points in five years.
During 2022-23, the value of agri-food exports, including processed food exports, stood at US$46.44 billion, or over Rs 385,400 crore. This accounted for about 11.7% of India’s total exports during the year. The food processing industry in India is one of the largest employers in organized manufacturing, with a 12.02% share in total employment in the organized sector. The sector also plays a vital role in reducing the wastage of perishable agricultural produce, enhancing the shelf life of food products, ensuring value addition to agricultural produce, and incentivizing diversification and commercialization of agriculture.
“It is an important industry because it has strong linkages with the agriculture sector and can employ surplus workforce released from the agriculture sector. During the last eight years ending 2022-23, the food processing industry has been growing at an average annual growth rate (AAGR) of around 5.35% at 2011-12 prices. Being labor-intensive, the pandemic adversely affected the sector, and it is now recovering,” noted the Economic Survey 2023-24.
Data shows that the GVA in the food processing sector increased from Rs 1.3 lakh crore in 2013-14 to Rs 1.92 lakh crore in 2022-23, at a CAGR of 4.43%. The sector constituted 7.66% of GVA in India’s overall manufacturing industry in 2022-23 at 2011-12 prices.
According to the report, the government’s recent initiatives to improve supply chain management from farm gates to retail outlets have helped the sector. The Production Linked Incentive (PLI) scheme for the food processing industry is expected to create off-farm employment, provide better prices for farm produce, and increase income for farmers. Currently, 173 applications are covered under the PLI scheme for the industry. The beneficiaries of the scheme have invested Rs 76,900 crore, and an incentive amount of Rs 1,070 crore was released in the two years 2021-22 and 2022-23.
Boosting India’s manufactured or processed foods industry is crucial for the country’s future growth, the survey says. “Once the incomes of smallholders increase, they will demand manufactured goods, spurring a manufacturing revolution. That is what happened in China between 1978 and 1984 when the real incomes of farmers doubled in just six years. India is well-placed to emulate this.”
Focus on the food processing industry has begun to yield results. The latest Economic Survey shows that processed food exports from India have grown significantly over the five-year period between 2017-18 and 2022-23. According to the report, the share of processed foods increased to 23.4% in 2022-23 from 14.9% in 2017-18, an increase of 8.5 percentage points in five years.
During 2022-23, the value of agri-food exports, including processed food exports, stood at US$46.44 billion, or over Rs 385,400 crore. This accounted for about 11.7% of India’s total exports during the year. The food processing industry in India is one of the largest employers in organized manufacturing, with a 12.02% share in total employment in the organized sector. The sector also plays a vital role in reducing the wastage of perishable agricultural produce, enhancing the shelf life of food products, ensuring value addition to agricultural produce, and incentivizing diversification and commercialization of agriculture.
“It is an important industry because it has strong linkages with the agriculture sector and can employ surplus workforce released from the agriculture sector. During the last eight years ending 2022-23, the food processing industry has been growing at an average annual growth rate (AAGR) of around 5.35% at 2011-12 prices. Being labor-intensive, the pandemic adversely affected the sector, and it is now recovering,” noted the Economic Survey 2023-24.
Data shows that the GVA in the food processing sector increased from Rs 1.3 lakh crore in 2013-14 to Rs 1.92 lakh crore in 2022-23, at a CAGR of 4.43%. The sector constituted 7.66% of GVA in India’s overall manufacturing industry in 2022-23 at 2011-12 prices.
According to the report, the government’s recent initiatives to improve supply chain management from farm gates to retail outlets have helped the sector. The Production Linked Incentive (PLI) scheme for the food processing industry is expected to create off-farm employment, provide better prices for farm produce, and increase income for farmers. Currently, 173 applications are covered under the PLI scheme for the industry. The beneficiaries of the scheme have invested Rs 76,900 crore, and an incentive amount of Rs 1,070 crore was released in the two years 2021-22 and 2022-23.
Boosting India’s manufactured or processed foods industry is crucial for the country’s future growth, the survey says. “Once the incomes of smallholders increase, they will demand manufactured goods, spurring a manufacturing revolution. That is what happened in China between 1978 and 1984 when the real incomes of farmers doubled in just six years. India is well-placed to emulate this.”