• Food Processing includes process under which any raw product of agriculture, dairy, animal husbandry, meat, poultry or fishing is transformed through a process (involving employees, power, machines or money) in such a way that its original physical properties undergo a change and the transformed product has commercial value and is suitable for human and animal consumption.
• It also includes the process of value addition to produce products through methods such as preservation, addition of food additives, drying etc. with a view to preserve food substances in an effective manner, enhance their shelf life and quality.
• Food processing industries adopt a unique procedure to increase the shelf-life of food products by processing them with chemical reagents and preservatives. Also, these industries blend different food products to form a new food product, for example, food processing industries make sauces by blending tomatoes, with different salts, oils, and spices. Also, some preservative chemicals like citric acid, salt, vinegar, butylated hydroxy toluene (BHT), butylated hydroxy anisole (BHA), calcium propionate, etc. are used by FPI to increase the shelf life of the existing food products.

Significance of Food Processing Industries

1. India is an agriculturally prosperous nation and more than 50% of its population is employed in the agricultural sector.Thus India has a surplus amount of raw materials for food processing industries. In 2018-19 the total production of Horticulture products in India was 313.85 million tons.
2. With the help of food processing industries, India easily processes raw products into processed foods.
3. As the agricultural sector is the major contributor to the Indian economy all the related sector like the food processing industry helps in creating employment and simultaneously benefit the economy of the country. According to the Food Processing Minister in 2020-21, the food processing industry contributes 12.8% to India’s GDP.
4. Food processing is the next step in sustainable development as processed foods are less likely to get rotten thus reducing food wastage.
5. Due to its longer shelf life, processed food can be smoothly exported to different parts of the world.

India holds the sixth-largest food and grocery market in the world with 70% of retail sales.

Scope of Food Processing Industries in India

In India, there is a great scope of food processing industries and for this reason, during the period March 2017 to April 2000 India has received around USD 7.54 billion worth of FDI in the food processing sector. 

• Globally India holds the number 1 ranking in producing some of the major products like mango, papaya, banana, milk, ginger, guava, etc. Also, India is a mass producer of sugar, cashew nuts, potato, rice, wheat, etc.
• Apart from food products India also produces a significant amount of coffee and tobacco every year.
• Spices are among one of the most exported food products of India. With the help of FPIs India is making processed spices that can easily be transported with a shelf life of more than a year. As per the data of IBEF (India Brand Equity Foundation), India exported spices worth US$ 4 billion in the financial year 2021.
• The diverse climatic condition and availability of different kinds of soil help India produce different kinds of food throughout the year. Additionally, the numerous sea coasts, rivers, and lakes cater to the supply of non-vegetarian food items.
• Establishing FPIs in rural areas of India provides a significant amount of resources at the same place along with cheap labor. Thus, from 2014 to 2015 the Government of India issued a fund of Rs. 2000 crore via NABARD to support the Food processing Industries and Food parks.
• With the help of the Food processing industries (FPI), Indian farmers will be able to directly sell their crops to the industry for better output.
• The demand for food items is significantly increasing with the increased population and thus more FPIs are needed to meet the demand.
• The Government of India is making significant efforts for the enhancement of FPIs in India and thus many investments in FPIs can prove to be quite profitable.

Additional Inofrmation (Not needed for answer)

Location of Food processing industries (FPI) in India

The food processing industries are divided into many segments like grain processing, meat and poultry, fruits, and vegetables, marine products, consumer foods, etc. However, all these food items are produced in FPIs located in different regions of India like Gujarat, Maharashtra, Andhra Pradesh, Kerala, Punjab, Uttar Pradesh, and West Bengal. The FPIs in India are mainly located along with the coastal states because of the raw material availability and ease of transportation. 

As per the ASI (Annual survey of India) and data presented by the Ministry of Food Processing there are around 37,175 registered processing industries across India

Major Challenges to FPI in India

• Climatic Condition:It is often seen that due to bad weather many farmers in India lose their crops every year thus resulting in a short supply of raw materials for the food processing industries.
• Lack of technology:There is still a need for advanced technology to be adopted in food processing industries to make it more efficient.
• Infrastructure:Due to poor infrastructure it becomes difficult to transport food items from one place to another.
• Food Standards:Every nation has its food standards for consumable food items and thus, the food processing industries must satisfy all these food standards. However, there are not enough laboratories in India to check these food items as per the standards.

Government’s initiatives to Promote FPI

• The ministry of food processing launched a scheme called National Mission on Food Processingin April 2012 that was sponsored by the central government. Under this scheme, the main was to establish more food processing industries in India and proper supervision and monitoring of the existing ones. 
• Under thevision 2015 for food processing, the Government of India is conducting a study on the growth of food processing industries in India. Its main aim is to enhance the existing food processing industries and expand production capacity by establishing new ones.
• The mega food park schemeof GOI can prove to be game-changing as it aims to directly connect the farmers with industries via mega food parks.
• The government is focusing on developing Agri Export Zones (AEZs)and under this scheme, many cities like Ahmedabad, Anand, Vadodara, Surat, Jamnagar, etc. have been converted into Agri-export zones. This zone caters export facilities of the food processing industries in India by strengthening the overall backward linkages with a market-oriented approach and it also helps to create healthy competitiveness abroad as well as in the domestic market. Recently, in various places in India, the Government has sanctioned 60 AEZs comprising about 40 agricultural commodities.