Advantage India
Robust
Demand
*India is the fourth-largest economy in the world and is expected to remain the fastest-growing major G20 economy, with GDP growth projected at around 6.8%–7.2% in FY27.
*Indian food processing market size reached Rs. 33,052.5 billion (US$ 382.24 billion) in FY25 and is expected to reach Rs. 65,835 billion (US$ 689.02 billion) by FY34.
*The food processing sector is a key contributor to India's manufacturing and agricultural economy. Processed food accounted for approximately 20.4% of India's agricultural exports in FY2024–25, up from 13.7% in FY2014–15, reflecting the sector's growing role in value addition and exports.
Competitive
Advantage
*India is the largest producer of milk and spices and one of the leading producers of fruits and vegetables, poultry, meat and seafood.
*India has access to several natural resources that provides it with a competitive advantage in the food processing sector.
Government
support
*The Animal Husbandry Infrastructure Development Fund (AHIDF) promotes private investment in animal husbandry infrastructure through a total outlay of Rs. 29,610.25 crore (approximately US$3.5 billion) and provides a 3% interest subvention. As of December 2025, 428 projects had been approved, with loans sanctioned amounting to Rs. 10,320 crore (US$ 1.19 billion) and interest subvention of Rs. 429.49 crore (US$ 49.67 million) released.
*The Production Linked Incentive Scheme for Food Processing Industries (PLISFPI) has approved 169 applications as of February 2026, resulting in investments exceeding Rs. 9,207 crore (US$ 1.04 billion).
Opportunities
*According to the Viksit Bharat@2047 report, India's food processing sector will grow significantly, reaching Rs. 94,63,300 crore (US$ 1,100 billion) by FY35, Rs. 1,29,04,500 crore (US$ 1,500 billion) by FY40, Rs. 1,63,45,700 crore (US$ 1,900 billion) by FY45, and Rs. 1,84,96,450 crore (US$ 2,150 billion) by FY47.
*From January 2000 to March 2026, India’s food processing industry has received cumulative FDI inflows of approximately Rs. 1,13,107.85 crore (US$ 16.15 billion).
*The growing consumption of food is expected to reach Rs. 111.19 trillion (US$ 1.2 trillion) by CY26, owing to urbanization and changing consumption patterns.
Introduction
India is the fourth-largest economy in the world and is expected to remain the fastest-growing major G20 economy, with GDP growth projected at around 6.8%–7.2% in FY27. India’s milk production is projected to rise 6% to 263 million tonnes in FY27 from 248 million tonnes in FY26. Within this growth story, the food processing sector has emerged as a vital contributor to the economy, driven by progressive policy measures of the Ministry of Food Processing Industries (MoFPI). The sector plays a crucial role in Gross Domestic Product (GDP), employment generation, and industrial investment. Milk production is growing at Compound Annual Growth Rate (CAGR) of 5.41% over the past 11 years from 146.31 million tonnes during 2014-15 to 247.87 million tonnes during 2024-25. The food processing sector contributes ~7.9% to manufacturing GVA and ~8% to agriculture GVA, while accounting for ~13% of India’s exports and ~6% of industrial investment, with processed food forming ~20.4% of agri-exports. Gross Value Added (GVA) in India’s food processing sector has increased from Rs. 1.61 lakh crore (US$ 24.60 billion) in 2015–16 to Rs. 2.24 lakh crore (~US$ 27.06 billion) in 2023–24 (first revised estimates).
The Government of India, under the Viksit Bharat@2047 vision, aims to scale the sector to Rs. 7.2 lakh crore (~US$ 84.24 billion) GVA by 2047, implying a ~10% CAGR. India’s diverse agro-climatic conditions provide it with a strong and sustainable raw material base. The country has established itself as a global leader in milk production, accounting for nearly 25% of global output. It also ranks second in the production of vegetables, fruits, and eggs, and fifth in meat production.
India is the largest producer of milk and spices and one of the leading producers of fruits and vegetables, poultry, meat and seafood. India has access to several natural resources that provides it with a competitive advantage in the food processing sector. Due to its diverse agro-climatic conditions, it has a wide-ranging and large raw material base suitable for food processing industries.
The Dairy Industry is worth Rs. 21,318.5 billion (US$ 246.5 billion) in 2025 and is projected to grow to Rs. 58,034 billion (US$ 659.8 billion) by 2034, showcasing a growth rate of 11.8% between 2026 to 2034. Moreover, India is also the world’s largest producer of spices, as total spice production is estimated at approximately 12 million tonnes, with exports valued at Rs 40,000 crore (US$ 4.7 billion) and volumes reaching 1.799 million tonnes.
India's food and grocery market is one of the largest globally, supported by a retail market exceeding Rs. 95,117 trillion (US$1.1 trillion) in 2025, with food and grocery accounting for approximately 60–70% of total retail consumption. The Indian food processing industry accounts for around 32% of the country's total food market, making it one of India's largest industries and a key driver of value addition, employment, exports, and agricultural growth. The food processing industry alone represents 32% of this market, making it one of the country’s largest industries and positioning it fifth globally in terms of production, consumption, exports, and anticipated growth.
A robust food processing sector is critical for addressing India’s food and nutritional security challenges. Processed food enhances shelf life, improves convenience, enables distribution to remote regions, and ensures better accessibility for consumers. For farmers, it provides higher value realization and wider market opportunities, creating a strong multiplier effect across the economy.
Market Size
India, the most populous country globally, is expected to maintain one of the youngest populations until 2030. Rising urbanization and changing consumption patterns are driving food consumption, which is projected to reach Rs. 111.19 trillion (US$ 1.2 trillion) by FY26. The processed fruits and vegetables segment alone was valued at Rs. 87,833.14 million (US$ 917.8 million), while consumer demand has been steadily increasing for ready-to-eat (RTE), ready-to-cook (RTC), dairy, and fruit and vegetable products. The Indian food processing market reached Rs. 30,49,800 crore (US$ 354.5 billion) in 2024 and is expected to grow to Rs. 4,584,415 crore (US$ 535 billion) by the end of FY26. In the long term, the sector is projected to expand to Rs. 60,22,100 crore (US$ 700 billion) by 2030, Rs. 94,63,300 crore (US$ 1,100 billion) by 2035, Rs. 1,29,04,500 crore (US$ 1,500 billion) by 2040, Rs. 1,63,45,700 crore (US$ 1,900 billion) by 2045, and Rs. 1,84,96,450 crore (US$ 2,150 billion) by 2047, according to PHDCCI.
India’s exports in the food processing sector are also witnessing strong growth. In FY26, processed fruits and vegetables exports stood at Rs. 25,987.41 crore (US$ 2,940.75 million), animal products at Rs. 55,114.51 crore (US$ 6,236.79 million), and other processed foods at Rs. 45,014.71 crore (US$ 5,093.89 million). The Grand total export of floriculture, fresh fruits & vegetables, processed fruits and vegetables, animal products, other processed foods, cereals, and cashew stood at Rs. 2,55,124.19 crore (US$ 28.87 billion) in FY26.
The food processing industry contributes around 32% of the overall Indian food market, 13% of total exports, and 6% of industrial investment. It is also a significant source of employment, engaging approximately 1.93 million people in the registered sector and 5.1 million workers in the unregistered sector. According to the Viksit Bharat@2047 report, the sector is expected to reach Rs. 94,63,300 crore (US$ 1,100 billion) by FY35, Rs. 1,29,04,500 crore (US$ 1,500 billion) by FY40, Rs. 1,63,45,700 crore (US$ 1,900 billion) by FY45, and Rs. 1,84,96,450 crore (US$ 2,150 billion) by FY47, underscoring its long-term growth potential.
Recent Development/Investments
The food processing sector has seen some major developments and investments in the recent past.
- The Production Linked Incentive Scheme for Food Processing Industries (PLISFPI) has approved 169 applications as of February 2026, resulting in investments exceeding Rs. 9,207 crore (US$ 1.04 billion). The scheme has created around 35 lakh MT per annum of processing capacity and generated about 3.39 lakh direct and indirect jobs, while exports of PLI-supported products has increased with a CAGR of 13.23% as on 2024-25 with reference to 2019- 20.
- The Union Budget FY26 allocated Rs. 2,000 crore (US$ 226.31 million) to the PM Formalisation of Micro Food Processing Enterprises (PMFME) scheme, strengthening micro food processing units and rural value chains.
- Government of India has allocated budget estimates of Rs. 4,064 crore (US$ 459.88 million) to the Ministry for the development of the Food Processing Sector in FY27, which marks an increase of about 13.79 % from the revised estimate of Rs. 3,571.57 crore (US$ 404.14 million) in FY26.
- From January 2000 to March 2026, India’s food processing industry has received cumulative FDI inflows of approximately Rs. 1,13,107.85 crore (US$ 16.15 billion), reflecting steady growth in foreign investment in the sector.
- As of FY2025–26 (31 March 2026), 408 integrated cold chain projects had been approved under the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY). Out of these 408 projects, 300 projects have been completed and 108 are at various stages of implementation. The capacity expected to be created by the approved cold chain projects is as follows:
- 10.06 lakh MT of Cold Storage, Controlled Atmosphere (CA)/Modified Atmosphere (MA) Storage and Deep Freezer.
- 331 MT per hour of Individual Quick Freezing (IQF).
- 190.98 Lakh Liters Per Day (LLPD) Milk Processing/Storage.
- 1924 reefer vehicles.
- World Food India 2025, hosted by the Ministry of Food Processing Industries and inaugurated by Prime Minister Mr. Narendra Modi, was announced as a flagship international event from September 25 to 28, 2025, in New Delhi to position India as a Global Food Hub with participation from over 90 countries and 2,000 exhibitors, highlighting India’s production scale and global investment prospects in food processing.
- In a major boost to the dairy industry, India’s iconic dairy brand, Amul has announced setting up the world’s largest curd (dahi) manufacturing facility in Kolkata. This new integrated dairy plant, backed by Rs. 600 crore (US$ 69.1 million) investment, will significantly expand Amul’s footprint in West Bengal.
- Amul has been named the world's strongest food and dairy brand in the Brand Finance Food & Drink 2024 report, achieving an impressive Brand Strength Index (BSI) score of 91.0 out of 100 and earning a prestigious AAA+ rating. This recognition underscores Amul's leadership in the global food and dairy industries.
- As of 31 March 2026, a total of 1,611 food processing and preservation projects had been approved under the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY). Of these, 1,200 projects had been completed, while 411 projects were at various stages of implementation.
- In July 2025, the Union Cabinet approved an additional outlay of Rs. 1,920 crore (approximately US$ 219 million), increasing the total allocation under the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) to Rs. 6,520 crore (US$ 745 million) for the Fifteenth Finance Commission (2021–22 to 2025–26), valid until 31 March 2026. The approval includes Rs. 1,000 crore (US$ 114 million) to support the establishment of 50 Multi-Product Food Irradiation Units under the Integrated Cold Chain and Value Addition Infrastructure (ICCVAI) component, along with 100 NABL-accredited Food Testing Laboratories under the Food Safety and Quality Assurance Infrastructure (FSQAI) component.
- Under key schemes, Pradhan Mantri Kisan Sampada Yojana (PMKSY) has been allocated Rs. 915 crore (US$ 103.54 million), while the Production Linked Incentive (PLI) Scheme for Food Processing Industry has been allocated Rs. 1,200 crore (US$ 136.36 million). The PMFME scheme has been allocated Rs. 1,700 crore (US$ 192.36 million).
- Additionally, an outlay of Rs. 1,700 crore (US$ 192.36 million) has been earmarked for the Prime Minister Formalisation of Micro Food Processing Enterprises (PMFME) Scheme, aimed at supporting micro-level food entrepreneurs, formalisation, and value chain integration.
Government Initiatives
- The Animal Husbandry Infrastructure Development Fund (AHIDF) promotes private investment in animal husbandry infrastructure through a total outlay of Rs. 29,610.25 crore (approximately US$ 3.5 billion) and provides a 3% interest subvention. As of December 2025, 428 projects had been approved, with loans sanctioned amounting to Rs. 10,320 crore (US$ 1.19 billion) and interest subvention of Rs. 429.49 crore (US$ 49.67 million) released.
- The Production Linked Incentive Scheme for Food Processing Industries (PLISFPI) has approved 169 applications as of February 2026, resulting in investments exceeding Rs. 9,207 crore (US$ 1.04 billion). The scheme has created around 35 lakh MT per annum of processing capacity and generated about 3.39 lakh direct and indirect jobs, while exports of PLI-supported products has increased with a CAGR of 13.23% as on 2024-25 with reference to 2019- 20.
- The Union Budget FY26 allocated Rs. 2,000 crore (US$ 226.31 million) to the PM Formalisation of Micro Food Processing Enterprises (PMFME) scheme, strengthening micro food processing units and rural value chains.
- The Ministry of Food Processing Industries (MoFPI) has been allocated Rs. 4,064 crore (US$ 459.86 million) in the Union Budget 2026–27, reflecting continued government focus on strengthening the food processing ecosystem.
- The Production Linked Incentive Scheme for Food Processing Industries (PLISFPI), with a Rs. 10,900 crore (US$ 1.23 billion) outlay, has attracted Rs. 9,200+ crore (US$ 1.04 billion) investments, created ~35 lakh MT capacity, and generated ~3.3 lakh jobs, boosting global competitiveness of Indian food brands.
- India is boosting turmeric exports via the SPICED scheme, which includes quality certification, value-addition support, post-harvest upgrades, and domestic & international market linkage programs under the newly formed National Turmeric Board.
- Under the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY), a total of around 1,607–1,618 food processing and preservation projects have been approved as of late 2025/early 2026, of which about 1,185–1,196 projects have been completed and operationalised, benefiting over 36–51 lakh farmers across India.
- APEDA has launched the Bharat's Hub for Agritech, Resilience, Advancement and Incubation for Export Enablement (BHARATI) initiative to empower 100 agri-food and agri-tech startups, foster innovation, improve export readiness and help India achieve Rs. 4,28,450 crore (US$ 50 billion) in agri-food exports of its scheduled products by 2030.
- The Government of India (GOI) introduced the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY), administered by the Ministry of Food Processing Industries (MoFPI). The scheme aims to establish modern infrastructure and streamline supply chain management from farm to retail, fostering growth in the food processing sector. It aims to enhance farmer returns, double farmers' incomes, generate employment opportunities in rural areas, reduce agricultural wastage, increase processing levels, and boost processed food exports.
- The Agro Processing Cluster Scheme under PMKSY is aimed at developing modern infrastructure and common facilities to facilitate the establishment of food processing units based on a cluster approach. This involves connecting groups of producers/farmers with processors and markets through a well-equipped supply chain. Each agro-processing cluster includes Basic Enabling Infrastructure (such as roads, water supply, power supply, drainage, ETP) and Core Infrastructure/Common facilities (including warehouses, cold storages, IQF, tetra pack, sorting, grading) along with at least 5 food processing units requiring a minimum investment of Rs. 25 crore (-US$ 3 million). The units are established simultaneously with the creation of common infrastructure, requiring at least 10 acres of land arranged either through purchase or lease for a minimum of 50 years.
- The "Integrated Cold Chain and Value Addition Infrastructure" Scheme under PMKSY was launched to establish uninterrupted cold chain facilities from farm to consumer, including pre-cooling, storage, and distribution. It encompasses various temperature-controlled storage, packing, and transportation facilities for diverse products like horticulture, dairy, and meat.
- Milk production is growing at Compound Annual Growth Rate (CAGR) of 5.41% over the past 11 years from 146.31 million tonnes during 2014-15 to 247.87 million tonnes during 2024-25.
- The Mega Food Park (MFP) Scheme was launched under PMKSY to integrate agricultural production with the market by bringing together farmers, processors, and retailers. The scheme follows a cluster approach, establishing modern food processing units within well-defined agri/horticultural zones. Each park includes supply chain infrastructure like collection centres, processing units, and cold chains, along with developed plots for entrepreneurs. Under the MFP scheme 41 projects were approved, of which 24 are operational as of December 2023.
- MoFPI initiated the PM Formalisation of Micro food processing Enterprises Scheme (PMFME) nationwide to aid micro food processing enterprises with financial, technical, and business assistance for upgrading operations.
- The One District One Product (ODOP) scheme under PMFME was launched to reap the benefit of scale in terms of procurement of inputs, availing common services and marketing of products. It aims to provide the framework for value chain development and alignment of support infrastructure. ODOP approved for 713 districts in 35 States/UTs with 137 unique products.
- The Branding and Marketing support scheme provides 50% financial grant to groups of FPOs, Self Help Groups (SHGs), cooperatives to promote their existing or proposed brands to market their processed food products under the scheme.
- Food processing units qualify for complete profit exemption in the first five years and 25 percent (30 percent in case of companies) for next 5 years. 100% deduction permitted on capital expenditure for cold chain or warehouse.
- Loans to food and agro-based processing units and cold chain have been classified under agriculture activities for Priority Sector Lending (PSL).
- Government allows 100% FDI in the food processing sector under the automatic route, facilitating a straightforward and efficient investment process.
Road Ahead
The Indian food processing sector offers a promising growth journey ahead and presents several opportunities with the sector being recognised as a key priority industry under the “Make in India” initiative. The MoFPI has undertaken several initiatives aimed at enhancing infrastructure and fostering food processing industries to stimulate investment in this domain. The Indian Government has sought to involve multiple stakeholders to improve interactions between farmers, processors, distributors, and retailers to establish strong supply chains linking farmers to processing and marketing to empower them with nearby grading and storage facilities which will enhance the value of their products. There are substantial investment prospects totalling Rs. 225.79 billion (US$ 2.36 billion) across 31 projects under Common Infrastructure for Industrial Parks which includes facilities such as specialized processing units, effluent treatment plants, testing laboratories, common warehouses, and logistics support. Foreign investment opportunities in India's food processing sector are also promising due to favourable policies, a vast consumer market, and government initiatives focused on improving the sector's competitiveness and sustainability.
References: Ministry of Food Processing Industries (MoFPI), Press Information Bureau, Nivesh Bandhu Investor Portal, Source: Agricultural & Processed Food Products Export Development Authority (APEDA), News Articles, Department for Promotion of Industry, and Internal Trade (DPIIT), Union Budget 2023-24, Interim Budget 2024-25, Union Budget 2025-26, Grant Thornton - Viksit Bharat by 2047: Role of the food processing sector, India Investment Grid, Startup India.
FAQs
The food processing industry in India transforms agricultural produce into value-added food products such as dairy, beverages, processed fruits and vegetables, meat, seafood, cereals, and packaged foods. It contributes around 7.9% to manufacturing GVA and is a key pillar of India's agri-economy.
The food processing sector strengthens agriculture by creating value addition, generating employment, boosting exports, and reducing food wastage. It contributes around 13% of India's exports, 6% of industrial investment, and supports millions of farmers and food processing enterprises.
The food industry in India includes dairy products, processed fruits and vegetables, meat and poultry, seafood, cereals, beverages, spices, packaged foods, ready-to-eat (RTE), ready-to-cook (RTC), and confectionery. These segments cater to both domestic and export markets.
The food processing sector is expanding due to rising urbanisation, changing food habits, increasing organised retail, higher exports, abundant agricultural production, growing cold chain infrastructure, and strong government support for value-added food manufacturing.
The food processing industry in India reduces post-harvest losses by extending shelf life through cold chains, food preservation, packaging, warehousing, and value addition. This improves farmer incomes, strengthens food security, and enhances supply chain efficiency.
The Government is supporting the food processing sector through PM Kisan SAMPADA Yojana (PMKSY), PMFME, PLISFPI, Mega Food Parks, One District One Product (ODOP), AHIDF, and 100% FDI under the automatic route.
The food processing industry in India offers investment opportunities across dairy, packaged foods, beverages, cold chain logistics, food testing, agro-processing, food technology, ready-to-eat products, and export-oriented food manufacturing. Strong FDI inflows and policy support continue to attract investors.
Technology is transforming the food processing industry in India through automation, smart food processing, cold chain solutions, food irradiation, quality testing, AI-enabled supply chains, and traceability systems. These innovations improve efficiency, food safety, and export competitiveness.
The food processing industry in India is expected to witness robust long-term growth, supported by rising consumption, agricultural value addition, exports, and government initiatives. The market is projected to reach US$ 700 billion by 2030, strengthening India's position as a global food processing hub.
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