What are the opportunities and challenges of the food processing industry in India? Why has the overall private investment remained low in the industry despite immense potential? Suggest measures.

Opportunities

1. Sunrise Sector → As per ES 2024-25 potential of >15% CAGR of FPI
2. Rural Industrialisation (PURA Model)
3. Employment opportunity from disguised labour in Agriculture (Lewis Model of structural transformation)
4. Foren opportunity → High demand of Indian processed food abroad. Eg processed mango product in EU
5. Women empowerment opportunity → As it provide employment to women eg Lijjat Papad (SEWA)
6. Comparative advantange of India → Varied agri-products
7. opportunity for food security and reduce wastage (40% of total)

Challenges

1. unorganised production
2. lack of economies of scale
3. limited value addition → only primary production
4. Marketing and Branding constraint
5. Quality issue eg Recent rejection of US - Haldiram products
6. funding and skiled labour challenges for FPI
7. Raw Material → poor backward linkages

Reason for low investment

1. Backward and forward linkage challenges (highlighted above)
2. Regulatory complexity → for private investment
3. Crowding out of investment due to high interest regime in India
4. Infrastructural Issues → limited FPI SEZs / industrial hubs

Measures

1. Focus on value addition → shift to 2nd Tier FPI.
2. Promoting FPI in rural areas
3. Cluster based approach eg Kisan Sampada Scheme
4. Market Access and export diversification of FPI
5. focusing on marketing support