Food processing sector to generate 9 million jobs by 2024: study

New Delhi [India], Feb. 19 : Indian food processing sector has the potential to attract USD 33 billion of investment and create nine million jobs by FY 2024, revealed an ASSOCHAM-Grant Thorton Research paper.

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.

The food processing sector is a key contributor to employment generation in India. The policymakers have identified food processing as a key sector in encouraging labour movement from agriculture to manufacturing.

According to the study, Indian food processing industry is pegged close to USD 130 billion. With the second largest arable land in the world, it is the largest producer of milk, pulses, sugarcane and tea and the second largest producer of wheat, rice, fruits and vegetables.

Despite the massive production, the degree of processing is low and ranges between two to 35 percent for different produce.

India is one of the top rankers in the production of bananas, guavas, ginger and papaya among others. This indicates an extensive opportunity in the food processing sector, indicates the paper. According to the joint study, Indian food and retail market is projected to touch USD 482 billion by FY 2020 from the current level of USD 258 billion in 2015, adds the paper.

With globalisation and increasing trade across the borders, approximately about 460 million tons of food valued at USD three billion is traded annually.

India has thus, a great potential for global trade in agricultural and processed food products. The share of food processing exports in total exports was around 12 percent in the last few years. During FY 2011-15, India's exports of processed food related products have been growing at a CAGR of 23.3 percent.

The unorganised sector accounts for 42 percent of India's food processing industry. The sizeable presence of small-scale industries points to the sector's role in employment generation.

As per the study, though the market falls under the unorganised sector in the country, the organised sector has a larger share in the secondary processing segment than the primary one.

Food and grocery constitute a substantial part of India's consumption basket accounting for around 31 percent share in the total.

India is the world's second largest producer of food after China. The arable land area of 159.7 million hectares (394.6 million acres) is the second largest in the world (after the US).

India has a strong raw material base for the food processing industry. Demand for processed food is rising with growing disposable income, urbanisation, young population and nuclear families.

Household consumption is expected to double by 2020. Additionally, changing lifestyle of people has facilitated an increase in expenditure on health and nutritional foods.

India benefits from large agriculture sector, abundant livestock and cost competitiveness. Investment opportunities are being tapped in agriculture, food infrastructure and contract farming. Also, diverse agro-climatic conditions encourage cultivation of different crop On the investment forefront, the Government is expecting USD 21.9 billion of investment in food processing infrastructure by 2015.

Investment including FDI would rise with strengthening demand and supply fundamentals. Furthermore, launch of infrastructure development schemes can increase investment in food processing sector.

Source: ANI