This article studies the potential for increased growth in this industry in the long run, despite the current challenges. Limited access to detailed granular data, especially at operational level, has been a key impediment to rigorous analytical study on the topic. With proper analysis and utilization of information technology and advanced tools, India can build a niche in the global market for processed food. The focus of this article is on three aspects – Government Policies, Technological Trends and Market Requirements.
Indian Government’s policies are favouring local production and retailing of food products. The policies facilitate the entry of small-scale units into the domestic market. However, to provide the requisite infrastructural assistance, it is necessary to improve the infrastructure of the processing units. Technological advances have also had limited impact on the infrastructural requirements, as there are sufficient and affordable technologies available, which allow for the efficient handling of raw materials and final products. On the other hand, lack of effective communication links and transport system between different parts of the supply chain, especially among small scale units has impeded the smooth flow of goods and products from the factory to the warehouses.
Technological advances, including Information Technology, have brought about significant change in the way business processes are carried out. It is essential that the policies set by the Indian government should be effectively implemented to address the shortcomings in the food processing sector. Currently, Indian food processing industry faces a number of hurdles in the form of regulations and policies, introduced by the government and related factors. To overcome the above-mentioned obstacles, Indian government is planning to introduce Food Safety Bill, 2021, which would lay down rules and guidelines for food processing unit operations.
Significant
Food processing industry in India has already made significant progress, thanks to technological advancements. However, initiatives of the Indian government would help Indian processors to adopt advanced systems for food processing and would also reduce the cost of production. These cost reductions are expected to contribute largely to the increasing profitability of the beverage industry. Moreover, it will also enhance the quality of the processed food products.
As far as the food processing sector in India is concerned, there are certain important factors, which need to be taken into consideration, prior to implementation. The strategies for growth in the food processing sector of India should focus on improvement of the overall efficiency levels, thereby enabling the processing units to reduce the cost of production. The strategies for growth in the food processing sector of India should improve the overall productivity levels of the units and should further help them to become highly competitive in the global market. There is a need for restructuring in the food processing units of India, with respect to the operational procedures, processes, etc., in order to achieve maximum productivity improvements. In addition, structural changes in the existing production set up can help to improve the efficiency of the processes and will ultimately help to increase the profit margin.
Strategy for growth
Strategies for growth in the food processing industry of India include improving the overall working procedures of the units, introducing new tools and equipment and maintaining the standard of food processing material. In addition, it is important to introduce new techniques and approaches for reducing the cost of production and also for increasing the customer service quality. The increase in the volume of demand for Indian food products is expected to rise 100 per cent or more in the coming years. It is anticipated that the market will continue to expand at a very high rate over the next decade, giving rise to a situation where supply will be outstripped by the increased demand from the domestic as well as international customers.
Strategies for growth in the food processing industry of India include attracting additional foreign direct investment (FDI) into the country by strengthening the present farm gate policies. This policy was introduced to ensure that the low level of FDI in the farming sector is balanced by the inflow of foreign direct investment (FDI). In other words, the policy aims at promoting and developing the processing, packaging and processing base of the processing unit, while at the same time, discouraging external sources of investment, like foreign direct investment, from undermining the domestic processing activity. A gradual increase in the number of processing units based on various inputs could help to achieve this target.
Strategies for growth in the food processing sector of India could be achieved through improved productivity levels, higher value chain management and by investing in the right technology and tools. It is also necessary to foster a better quality of raw materials and to reduce costs of production. It is also necessary to improve the internal organizational capability of the processing unit to enable it to efficiently attain its targets. To achieve these goals, various processes are being simplified, while maintaining necessary standards and regulations to maintain quality and consistency across the entire value chain.
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