Food processing industry in India: An economic analysis

The status of food processing industry in India has been examined by comparing some of its structural and financial features with other agro-and nonagro-industries. The agro-industry requires less fixed capital and more working capital as compared to those by other industries. Only 18% of the total industrial fixed capital is in agro-industry compared to its 43% share in industrial employment. The agro-industry annually generates 51% value-added over fixed capital as compared to 39% in other industries. The study on the status of investment in the different processed food sectors has revealed that Rs 74,525 crore have been invested for its development. The sector has attracted foreign investment of Rs 11,599 crore. The annual compound growth rates (CGRs) of food processing sectors have shown significant growth performance during the 1990s. The growth in roller flourmills has been 1.88% per annum and in modern rice mills, 0.76% per annum. The performance of exports of important agricultural products and processed products has shown an upward growth trend during the previous decade, the export of processed food products has increased by 300 per cent. After WTO agreemt, the quality control has become an important aspect for food processing industry. The food processing sector seems to have enormous potential in both domestic as well as export markets, provided it could improve the quality of products as per international standards.