| New Delhi foresees an investment of Rs 500 billion in the country's food processing industry during the 11 th Five Year Plan, reports Mumbai Mirror.
Making this announcement in Mumbai, India 's Minister of State for Food Processing Subodh Kant Sahai said the investment will come primarily from financial institutions (50%), industry (40%) and government (10%).
The investments will go towards building backward and forward linkages in the supply chain, and setting up testing facilities and new abattoirs.
The minister said the government is setting up a national meat board to promote the meat processing industry. "We will even implement a policy to develop this sector to maintain research and development, quality assurance and hygiene," he said.
Sahai said that the government proposes to set up 100 abattoirs using the public-private partnership in different parts of the country. About 100 new food testing labs will also be launched during the 11 th Plan. "We have proposed to set up a laboratory in collaboration with Jetco of Europe that will help to bring down the rate of rejection of Indian processed foods exports," the minister said.
Another report, carried by www.freshplaza.com, says that though India's food processing industry is very big, it is still in the nascent stages of development. Of the country's total agriculture and food produce, only 2% is processed. The highest share of processed food is in the dairy sector, where 37% of the total produce is processed, and of this, only 15% is done by the organised sector.
A study conducted by McKinsey and Confederation of Indian Industry (CII), the turnover of the food market is approximately US$ 69.4 billion, out of which value-added food products comprise US$22.2 billion.
India 's Finance Minister P. Chidambaram, in an attempt to provide a push to the food processing industry, has announced that the sector will be given priority for bank credit. Chidambaram said that the National Agriculture and Rural Development Bank (Nabard) would create a separate window with a corpus of US$223 million for "refinancing loans to the sector, especially for agro-processing infrastructure and market development."
India is also considering investing another US$22.97m in at least 10 mega food parks in the country. The move is over and above the green signal given to 100% foreign direct investment and income-tax benefits to the sector. According to Indian Credit Rating Agency (ICRA), the processed food market accounts for 32% of India's total food market.
FDI in the India's food sector is poised to hit the US$3-billion mark. In the last one year alone, FDI approvals in food processing have doubled. FDI in food already beats the money being pumped into the far more glamorous hotels and tourism industry.
Latest data show the cumulative FDI inflow in food processing reached US$2.8 billion in March 2006. In 2005-06, the sector received approvals worth US$41million. It is almost double the US$22million approved in 2004-05.
For the complete story, go to
http://www.mumbaimirror.com and http://www.freshplaza.com
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