The Indian food market is worth Rs 25,000 billion, but the food processing sector contributes less than 1.5% of this humongous pie, says The Hindu Businessline quoting a report released by the management consultancy firm McKinsey and the Confederation of Indian Industry (CII).

But, the newspaper says, spurred by the incentives announced for the food processing sector in the Union Budget 2006-07, and with corporate entities entering the fray in the food retail business, the nature of the business is set to change.

India Inc companies that have finalised ambitious plans for the agri-foods segment include Reliance, Pantaloon, Godrej, Field Fresh (a joint venture that brings together India's leading cellphone operator, Bharti Enterprises CMD Sunil Mittal, and Rothschild), Ballarpur Industries, DSCL, Tata Group, and Mahindra & Mahindra.

"Retailing in general and food retailing in particular is one of the high-growth sectors. Food retailing is to grow 10-fold in five years. For a number of Indian companies, this may pose a good business opportunity," says the McKinsey-CII report. Processed foods contribute 65-75% of the food market in Thailand, Malaysia and Brazil.

(For the complete story, go to: http://www.thehindubusinessline.com/bline/catalyst/2006/04/27/stories/2006042700010100.htm )