Advantage India

Business friendly policies, key initiatives and a series of reforms have put India on the global map as one of the fastest growing economies. The country is also one of the most attractive investment destinations in the world. Here’s a look at the top reasons to invest in India in the Food Processing Industry.

Regulatory Policies
  • 100% FDI in trading including e-commerce of food products produced and manufactured in India.
  • 100% FDI through automatic route in food processing.
  • 100% Income Tax deductions on capital expenditure for cold chain/warehouse.
  • 100% Income Tax exemption on profit for new food processing, preservation and packaging units for first 5 years and 25% thereafter for next 5 years.
  • Excise duty on machinery for food processing reduced from 10% to 6% and on refrigerated containers from 12.5% to 6%.
  • Basic custom duty reduced on refrigerated containers from 10% to 5%.
  • Special fund of INR 2,000 crore (US $ 300 million) with NABARD for designated food parks and processing units.
  • Loan to processing units and cold chain under priority sector lending.
  • Service Tax exemption for pre-conditioning, pre-cooling, ripening, waxing, retail packing, labeling of fruits & vegetables.
  • Service Tax exemption for construction, erection, commissioning or installation of post-harvest storage infrastructure/cold storages.
  • Concessional customs duty on imported equipment.
Sectoral Opportunities
  • 2nd largest global producer of fruits & vegetables. Current processing level in this sector is less than 2% thus providing an immense scope for investments.
  • Largest global producer of milk with a CAGR of 13-15% in the coming years thereby offering huge opportunity for technology, automation, integration etc.
  • 3rd in egg production and 5th in meat production globally. The opportunity lies in aligning with the changing consumer habits towards processed, cleaned and frozen meat and poultry products.
  • Organized retail offers huge opportunity for growth of cold chain sector. The existing gap for reefers, pack houses and ripening chambers are areas worth exploring and investing. Government of India has already begun huge transformation in this area. 101 cold chains were allocated in March 2017.
Ease of Doing Business
  • Government of India has enabled FDI in retail and has streamlined the regulatory environment in line with international practices and codex to facilitate investments.
  • Single window desks have been set-up to remove all hurdles and make it easy to invest as well as do business in India.
  • Over the last couple of years, India has moved up in the global rankings for ease of doing business.
India Beckons
  • India has a strong resource base of agriculture. India is a major producer of fruits and vegetables; it is the top producer of milk and has largest cattle population.
  • We are the third largest in marine landing and fifth in poultry production in the world. We have also a domestic market of over a billion population and 300 million strong middle class consumers.
  • Indian consumers spend more than 30 per cent of their income on food products. Food and food products are the largest consumption category in India and our domestic market will touch US $ 258 Billion by 2015 (FICCI-E&Y Report, 2009).
  • India has the geographical advantage of being nearer to major markets of Middle East, South-East Asia and Africa.
  • India is poised for a big take off in the production and consumption of processed food products. Our food processing sector is growing annually around 9 per cent.