FDI Trends in Food Processing Sector in India

Abstract

Global Foreign Direct Investment (FDI) inflows rose 16 per cent in 2011. The FDI inflows in India are increased at the rate of 27.9 per cent per annum during the period 2000 to 2011. In India, FDI inflows in food processing sector were worth Rs.198 crore in the year 2000, these FDI inflows were rose to Rs.1314 crore in 2009 and the it was fallen to Rs.826 crore in 2011. During this period the growth were registered 11.1 per cent per annum respectively. Ministry of Food Processing Industries (MoFPI) has formulated a Vision 2015 Action Plan that includes trebling the size of the food processing industry, raising the level of processing of perishables from 6 per cent to 20 per cent, increasing value addition from 20 per cent to 35 per cent, and enhancing India's share in global food trade from 1.5 per cent to 3 per cent. ITRODUCTION The Indian food processing industry is one of the largest in the world in terms of production, consumption, export and growth prospects. Earlier, food processing was largely con- fined to the food preservation, packaging and transportation, which mainly involved salting, curdling, drying, pickling, etc. However, over the years, with emerging new markets and technologies, the sector has widened its scope. It has started producing many new items like ready-to-eat food, beverages, processed and frozen fruit and vegetable products, marine and meat products, etc. It also include establishment of post- harvest infrastructure for processing of various food items like cold storage facilities, food parks, packaging centres, value added centres, irradiation facilities and modernised abattoir. Food processing sector is indispensable for overall develop- ment of an economy as it provides a vital linkage and synergy between the agriculture and industry. It helps to diversify and commercialise farming; enhance income of farmers; create markets for export of agro foods as well as generate greater employment opportunities. Through the presence of such in- dustries, a wider range of food products could be sold and distributed to the distant locations. The term 'food processing' is mainly defined as a process of value addition to the agricul - tural or horticultural produce by various methods like grading, sorting and packaging. In other words, it is a technique of manufacturing and preserving food substances in an effective manner with a view to enhance their shelf life; improve qual- ity as well as make them functionally more useful. It covers spectrum of products from sub-sectors comprising agricul- ture, horticulture, plantation, animal husbandry and fisheries. The liberalisation of the Indian economy and world trade as well as rising consumer prosperity has thrown up new op- portunities for diversification in the food processing sector and opened up new avenues for growth. Demand for pro-