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Despite India’s strong position in agri-production, the country lags in the export of food products (including processed). India’s share of agri-production is 9.5% globally while its share in the export of overall food products is 2-3% with share in export of processed food category even lower at 1-2%.
However, the level of food processing in India across categories is low, especially in higher processing categories (~20%) including secondary and above. To cite an example, the level of primary processing in the fruits and vegetables category in India is a meager 2% while the same is 70% in Brazil, 65% in USA, and 23% in China.
The Central government has said that food and food processing industries in North East India has the potential to become a big part of economic growth and very few other regions has such potential.
Federation of Indian Chambers of Commerce and Industry (FICCI) has drawn up 5-point action plan- ARISE that can provide the food processing industry the necessary firepower to achieve its export potential.
-Adoption of crop value chains by establishing crop-specific PPP model
The industry body said a potential way of solving the challenges associated with quality and cost-competitiveness of agri-produce is through regulation of product specific upstream value chain by setting up of robust crop specific PPP models with support from the government and leading private players. The model should ensure adequate financial return for the stakeholders, promote equitable value sharing among stakeholders, and be supported with a robust implementation structure to drive the program.
On promotion of Indian-origin brands globally, the industry body said to increase penetration in overseas markets it is critical to improve the brand perception for Indian products. Establishing a strong brand can require significant investment and a lot of effort which can be difficult for a player to undertake individually.
"Therefore, it will be better if relevant stakeholders within the product specific value chain including food processors,
exporters and relevant government agencies come together to pool their limited funds and combine their efforts to develop a common product specific brand with a consistent and harmonized branding strategy" the industry body said.
Further, another important aspect related to branding is that related to Geographical Indication (GI) brands.
"It is important to develop GI brands in the country and ensure that products specific to geographical locations in India are not being falsely branded in international markets. This will not only help India carve a niche for itself but also enable it to charge a premium for such products. An example for the same can be of Darjeeling Tea where the GI brand was registered that helped protect it from falsely branded products, charge a premium, and penetrate into more countries" the industry body said.
Even the number of GI owned brands from India is significantly less vis-à-vis some of the other countries like the United Kingdom and China. Having GI brands is critical to protect products from false branding in the international market and also enables manufacturers to charge a premium for these products.
On industry-academia collaboration to aid R&D, it said steps should be undertaken to ensure adequate industry representation in the governing council with active participation in designing the research curriculum. Also, current industry professionals and retired industry experts should be made members of the research team with clear accountability.
On collaboration among private players for setting up and sharing infrastructure facilities, it said is important the private players come together and collaborate with each other. They should jointly set up and share infrastructure facilities (e.g. quality testing labs, cold storage and transportation).
"The same can have a double benefit in terms of enabling partners involved to together meet the significant investment that is required in setting up these facilities as well as drive cost efficiencies from economies of scale" it said.
On having sustainability and ethical norms and ensure compliance, it said one of the key emerging trends is the increasing awareness and inclination amongst consumers for buying products that have been manufactured in compliance with sustainability requirements and in an ethical manner.
"There is a potential for Indian players to differentiate and promote the sale of their products through compliance with these norms" it said.
FICCI said the tenets of this plan- ARISE urge both public and private stakeholders to join hands and collaborate effectively - involving identification of right stakeholders and onboarding them, creation of relevant forums and decision rights, setting up rigorous processes and governance mechanism as well right policy-making/updating.
"We should keep in mind that these are only the first few steps in India’s journey to becoming an export powerhouse in food processing sector- and would require a strategically concerted effort from the industry as well as the Government" the industry body said.
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