FROM GRAINS TO GROWTH: PROCESSED FOOD BOOM

India's processed food market set to reach $535 billion by 2025, fuelled by rising demand and government initiatives.

- 

Over the last ten years, India’s processed food sector has undergone a remarkable transformation, fueled by evolving consumer preferences, economic growth, and strategic government initiatives. This shift has reshaped the nation’s dietary habits and positioned India as a significant player in the global processed food industry.

RISING DEMAND

The Indian food processing market has grown substantially, increasing in value from USD 263 billion in 2019-20 to a projected USD 535 billion by 2025. This expansion mirrors a broader global trend, with the processed food industry expected to grow from USD 1,925.7 billion in 2020 to USD 3,407.2 billion by 2030, at a compound annual growth rate (CAGR) of 5.2%.

A major contributor to this growth is the increasing consumption of ultraprocessed foods (UPFs) across India. Retail sales of UPFs have risen at a CAGR of 13% from 2011 to 2021, signaling a shift from traditional home-cooked meals to processed alternatives. This trend is evident in both urban and rural areas, with studies showing growing popularity of UPFs across diverse socioeconomic groups.

GOVERNMENT INITIATIVES

The Indian government has implemented several initiatives to strengthen the food processing industry. The Production-Linked Incentive (PLI) scheme, with an outlay of INR 10,900 crore, is aimed at boosting domestic manufacturing, promoting exports, and creating employment in the sector. Furthermore, the government has set ambitious targets to enhance India’s share in the global processed food market, currently valued at USD 4 trillion. India’s share stands at just 2.4%, but efforts are underway to increase value-added exports by 40% over the next few years. The organic food market also holds considerable promise, with plans to quadruple India’s share from 2.5% in the next five years.