opportunities for f d imports from india - yes bank · mohit singla chairman trade promotion...

F d Imports

from India

Opportunities for

TITLE Opportunities for Food Imports from India

YEAR January, 2018

AUTHORS YES BANK and Trade Promotion Council of India (TPCI)

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MESSAGEIndia currently exports agricultural products worth USD 30 Bn, however, this is only a miniscule portion of the global food trade. Given the rich and diverse production base, the potential for exports from India is immense. Export promotion continues to be a major thrust area for the Government and efforts are being made through its various departments to boost the overall agricultural economy. This is being made possible through various incentives, policy and regulatory reforms to boost quality supply, enhance food processing, develop adequate infrastructure and promote ease of doing business in India.

Given India’s strengths in the food and agri sector, we aim to capture a larger share in the global food trade and double our exports over the next five years. We are facilitating business, trade and investment in India in the best possible way. Indus Food is one such initiative which brings together global importers and Indian players on a single platform to build and expand their business.

The study “Opportunities for Food Imports from India” developed by YES BANK and TPCI puts forth India’s strengths in major subsectors and highlights key import and investment opportunities in the country. The report is a ready reckoner for our current and potential business partners to understand and further explore the plethora of opportunities in India. I congratulate all the study partners for their sincere efforts in bringing out this study on the occasion of Indus Food.

FOREWORDThe Indian agri economy, with production of over 1 Bn MT of agri commodities, is the second largest in the world. The sector is an important source of food and nutritional security, livelihood generation, provider of raw material to processing industries and a key foreign exchange earner for the country.

Today, India exports food products worth USD 30 Bn and is ranked amongst the top 10 exporting nations globally. India has also emerged as a major supplier of commodities such as spices, basmati rice, tea, mango, cashew, seafood and meat, with huge opportunity in organic, fruits & vegetables, processed food and Indian ethnic food as the next export favorites.

Given India’s rich resource base, location advantage and supportive policy reforms towards ease of doing business, India should aim at doubling farm exports to USD 60 Bn in the next 5 years. To create a strong presence on the global trade canvas, it is critical to put in place reforms at farm, infrastructure and trade level. I firmly believe that the Government’s recent initiatives in developing R&D facilities, farmer extension and FPO formation, better market access, setting quality standards, developing processing infrastructure and improving agri-marketing infrastructure, are positive moves.

Moving beyond the commodity-ingredient-products continuum, better collaboration between Ministry of Commerce and State Agriculture Departments for key commodities, provision for refrigerated vans linked to superfast trains especially for poorly connected areas and a dedicated green channel in key sea ports, amongst others, will further boost India’s potential as a food exporter.

On the occasion of Indus Food 2018, I am pleased to present this Ministry of Commerce & Industry - YES BANK - TPCI report ‘Opportunities for Food Imports from India’, which provides an extensive review of import and investment opportunities in India’s food sector.

I am confident that this publication will be useful reference for both global and domestic investors and stakeholders in the F&B value-chain, thus helping India become the global food factory.

Thank You.

Sincerely,

Rana Kapoor Managing Director & CEOChairman

FOREWORD

India’s trade in agriculture commodities has gone under significant changes in the post- reform period. Due to suitable climatic conditions, India’s trade has diversified towards value added agricultural commodities especially exports of fruits and vegetables, India being the second largest producer of fruits and vegetables in world. This sector not only promises increase in employment but also assures reduction in poverty as it yields higher income as compared to food grains. It has been observed that over the years, with the increase in popularity of this sector, it is moving from rural confinements to commercialisation with increase in the usage of technology and upgraded methods of production. This effort is also getting a push because of the progressive Government policies especially for the horticulture & processed agro commodities.

Plausibly, we need to revamp our export promotion strategies to make industry players realize about our presence and competitiveness which could be converted into business. The novel marketing strategies need to be put in place to get more channels opened up for the exports. That apart, we may need to diversify the export destinations in order to increase export demand and ultimately export values. Eventually, instead of focusing only on the existing markets and fighting for the larger of share in developed nations, we may need to consider shifting our focus to potential markets in developing nations and least developing nations, where we can export with lesser hassles.

India exports fresh fruits, vegetables, processed products of fruits and vegetables, cut & dried flowers, medicinal and aromatic plants, seeds, spices, cashew kernels and their products, tea, coffee, meat. Shrimps, cereals and animal feed. This export basket needs to be more eclectic to meet the global dynamic food and beverage demand.

Since, India is bestowed with varied agro-climate which is favourable for growing large number of horticulture crops. Therefore, this sector has great potential for exports and ethical business communication. Trade facilitation organization like TPCI envisages to see India as a global leader in exporting agro and processed agro products.

Mohit SinglaChairmanTrade Promotion Council of India

Global and Indian Food Trade - An Overview 1

• Global Food Trade 2

• India’s Export Basket 4

• India and its Trade Partners 6

Sourcing Opportunities from India 9

• Marine 10

• Meat 13

• Spices 16

• Tea 20

• Fruits and Vegetables 23

• Organic Food 27

• Indian Ethnic Food and Superfoods 32

Investment Opportunity in India 35

• Why Invest in India? 36

• Investment Opportunity - Mega Food Parks 38

• Investment Opportunity - Cold Chain 39

Conclusion 41

C O N T E N T S

Opportunities for Food Imports from India 1

Global and Indian Food Trade - An Overview

1

Opportunities for Food Imports from India2

1. Global and Indian Food Trade - An Overview

Exhibit 1: Share of different product segments in global exports

Global Food Trade The current global agricultural exports are valued at around USD 1.58 trillion,1 which account for around 10% of the total exports taking place globally. The major category of exports globally is the manufactured goods segment followed by fuel and mining products and agricultural products. World exports of agricultural products have increased by 70% since 2006.

Of the total agricultural trade worth USD 1.58 trillion, approximately USD 1.35 trillion is accounted for food products. The other non-food products like timber, wool, cotton, rubber etc. account for the remaining USD 0.23 trillion exports.

Source: World Trade Organization 2016

1WTO 2016

73%

13%

10%

4%

Manufactured Good

Fuels and Mining Products

Agricultural Products

Others


The overall export scenario in the year 2016 did not look very dynamic, as the prices of major commodities saw a slump. This also included some food commodities.

The European Union is the largest exporter of food commodities (USD 518 Mn), followed by the USA (USD 136 Bn), Brazil (USD 68 Bn), China (USD 66 Bn) and Canada (USD 46 Bn). The intra EU trade accounts for 74% of the export done by EU-28. The share of major exporters of food globally players is indicated below. The graph indicates the annual growth in export value (X axis), export value (Y axis) and share in global trade (size of the bubble).

India exported food products worth USD 30 Bn (in 2016) and its share in global export currently stands at about 2.2% taking it to the 9th position in the world food exports. The share of Indian exports is comparable to those of Indonesia, Thailand and Mexico.

For India, export of agricultural products contributes about 13% to the agriculture GDP and therefore, has a large impact on the nation’s economy. Though the agricultural exports from India saw a decline of 4% from 2015 to 2016 (largely due to drop in oil prices which led to softening of global agricultural commodity prices) , a comparative analysis of India’s ten year agri exports reveals an encouraging picture.

Indian agricultural exports grew at a whopping 9% compared to China (8%), Brazil (5.4%) and US (5.1%) between 2007 and 2016. During this period, exports of tea, coffee, cereals, horticultural produce doubled; while exports of meat, fish, processed products grew between three to five times.

Source: World Trade Organization, YES BANK Analysis

Exhibit 2: Comparative analysis of different countries in terms of export value, annual growth and share in global exports

European Union (28)

United States of America

Brazil China

Canada

Argentina

Indonesia

India Thailand Mexico

-100

0

100

200

300

400

500

600

700

-8% -6% -4% -2% 0% 2% 4% 6% 8% 10% 12% 14%


Exhibit 3: Agri Export Growth 2007-16 in different countries

9.0%8.0%

5.4% 5.1%

India China Brazil USA

Source: ITC Trademap

India’s Export BasketIndia’s export basket is a diversified mix led by Marine (USD 5.8 Bn), Rice (USD 5.7 Bn) and Meat (USD 4 Bn) which together constitute around 52% of its total agri exports. While India occupies a leading position in global trade of aforementioned food products, its total food export basket accounts for only around 2% of world food trade, estimated at USD 1.35 Trillion.

The country is now taking steps to revamp its exports and increase its share in the global trade exponentially. The aim is to now move up the value chain through processing and value addition and bring in more stringent quality parameters and implementing checks and balances to adhere to the global standards.

The table below highlights the key products in India’s food export basket. The top 15 products contribute to over 80% of the total food exports

S No. Products India’s Share As % of Category World Trade

Annual Growth in World Imports 2012-16

India’s Exports FY17 (US$ Bn)

1 GUAR 55.8 -36 0.48

2 COCONUT 27 15 0.10

3 MEAT 20 3 4.04

4 CASHEW 18.6 11 0.79

5 SPICES 18.1 7 1.94

6 MARINE 14 6 5.82

7 NTFP 11.5 4 0.35

8 OILSEEDS 10 -4 3.25

9 TEA 9.1 -1 0.73

10 PULSES 7.3 5 0.19

11 CEREALS 5.8 -2 6.01


Source: ITC Trademap, Stakeholder consultation

S No. Products India’s Share As % of Category World Trade

Annual Growth in World Imports 2012-16

India’s Exports FY17 (US$ Bn)

12 EGGS 4.2 -2.5 0.07

13 SUGAR 3.8 -6 1.40

14 FLOWERS 3.3 -2 0.08

15 HONEY 3.2 4 0.08

16 TOBACCO 2.5 -4 0.96

17 COFFEE 1.8 -1 0.86

18 VEGETABLES 1.7 3 1.32

19 FRUITS - FRESH AND PROCESSED

1.5 4 1.09

20 FEED 1.3 -1 0.27

21 MILLED 1.3 -1 0.22

22 BISCUITS & CONFECTIONARY 1.1 2 0.52

23 PRODUCTS OF ANIMAL ORIGIN

1.1 -4 0.08

24 PROCESSED FOOD 0.9 2 0.27

25 COCOA 0.4 4 0.16

26 DAIRY 0.4 -4 0.14

27 BEVERAGES 0.3 0 0.31


Exhibit 4: A snapshot of India’s agricultural trade

35

30

25

20

15

10

5

0

5

India's%Share of World Trade

DRIED ONIONS,117

COCONUT,97

CASHEW,787SPICES,1,940

FRESH OR CHILLED VEGETABLES (NES),110

COCOA,162

PROCESSED FOOD, 273

FRUITS FRESH ANDPROCESSED, 1,090

VEGETABLES,1 324

Value (USD Mn) of Exports from India

BISCUITS & CONFECTIONARY, 521

FRESH ONIONS,382

PULSES,187

BANANAS,60

HONEY,83

GUAVAS, 202

NTFP, 345

-500 500 1500 2500 3500 4500 5500

Bubble size is proportional to growthin world trade between 2012-2016

MEAT,4,036

MARINE,5,818

FRESH GRAPES,219


India and its Trade Partners

Viet

nam

Mal

aysi

aEg

ypt

Saud

i

Arab

Iran

UAE

Beni

nN

epal

Sene

gal

USA

SE A

sia

EUch

ina

Russ

iaN

orw

ayBa

ngla

desh

Bhut

anN

ethe

rland

UKFr

ance

Yem

en

Mea

t52

%9%

8%

Basm

ati

Rice

21

%18

%15

%

Non

Basm

ati

Rice

10%

8%8%

Mar

ine

28

%25

%21

%

Tea

14%

9%

15%

Spic

es8%

18%

6%

Guar

51

%

7%

7%

Dairy

Prod

ucts

22

%

14%

12%

Man

go

11%

56

%

11

%

Grap

es

13%

30

%8%

Man

go p

ulp

22

%

11%

10%

Onio

n

16%

13

%

31%

Wal

nuts

12

%

15

%16

%

Num

bers

in t

he b

oxes

indi

cate

% s

hare

in e

xpor

ts


India produces and exports a large and diverse range of food products. The key export products can be classified under different categories based on the current export values, India’s potential for the produce and growth trends across the globe.

This report delves deeper into some of these key categories across the 3 segments. These categories include:

Marine Meat

Spices Fruits and Vegetables- Fresh and Processed

Organic Indian Ethnic Food

Tea

Export Drivers Untapped Stars

• Marine

• Meat

• Rice

• Tea

• Spices

• Other Cereals

• Fruits and Vegetables- fresh and processed

• Nuts

Future champions

• Organic

• Indian Ethnic Food

• Minor millets


Sourcing Opportunities From India

2


Marine

India is endowed with abundant geographical resources suited for both marine and inland fisheries, such as long coastline (8118 km), rivers and canals (1.95 lakh km), reservoirs (2.92 Mn Ha), ponds and tanks (2.43 Mn Ha), and brackish water (1.16 Mn Ha). India is the 2nd largest producer of fish in the world (after China) and contributes around 6% to the total global fish production. The sector is a source of livelihood for over 14 Mn people and contributes to about 0.9% to the National Gross Value Added (GVA) and 5.3% of agriculture GDP (in the year 2015-16).

Starting from a purely traditional activity in the early fifties, fisheries and aquaculture have now transformed into a significant commercial enterprise in India. Apart from meeting the domestic demand, the Indian seafood industry is also a major player in the global seafood trade, exporting wide range of products and hence a source of major foreign exchange earner.

Indian fisheries sector is valued at ~USD 17 Bn with a total production of 10.8 Mn MT in the year 2015-16.Domestic consumption contributes to about 70% of the total market value while exports contribute to the remaining 30%.

In 2016-17 India exported seafood worth a record high of USD 5.8 Bn. USA and South East Asia were the key conventional buyers, while the imports from the European Union (EU) grew substantially during the year. Frozen shrimp maintained its position as the top item of export, accounting for 38% in quantity and 64% of the total earnings. Frozen Fish was the second largest export item, accounting for a share of 26% in quantity and 11.6% in dollar earnings, registering a growth of 26.9% in terms of value. Overall the seafood exports have witnesses a growth of around 11% since 2010-11.


The seafood industry has around 450 state of the art modern plants with an installed processing capacity of around 18,250 MT. More than 60% of these plants are EU approved.

Immense opportunities exist in India for fisheries due to untapped potential for deep sea tuna fishing, marine aqua culture/cage culture and ornamental fisheries. Domestic distribution network, being in rudimentary state and on the other hand increasing consciousness and demand for clean/hygienic, processed, packaged products offers exciting opportunities for both wholesale and retail formats (modern trade as well as through e-commerce).

Marine products are one of the highest foreign exchange earning category export basket. India currently has a 14% share in global trade and there is great potential to boost production, quality and expand to new markets with value added products. Andhra Pradesh, Gujarat, Maharashtra and Karnataka are the most potential states for the development of aquaculture. Majority of the exports today happen from the state of Andhra Pradesh.

Exhibit 5: Export of Marine products from India (Value in USD Mn)


Source: The Marine Products Export Development Authority

2.8

3.53.5

5.05.5

4.75.8

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

Exhibit 6: Major export destinations

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

USA South East Asia European Union Japan Middle East

Quantity in Mn MT Value in USD Bn


Key production states for Marine

Goa

Assam

Mizoram

Nagaland

Sikkim

Tamil Nadu Puducherry

Jharkhand

Delhi

Andhra Pradesh

Telangana

West Bengal

Arunachal Pradesh

Meghalaya

Manipur

Islands

Madhya Pradesh

Maharashtra

Bihar

Chhattisgarh

Uttarakhand

Odisha

Karnataka

Himachal Pradesh

Punjab

Jammu and Kashmir

Gujarat

Lakshadweep

Uttar Pradesh

Rajasthan

Tripura

Haryana

Chandigarh

Dadra and Nagar Haveli

DamanDiu

Kerala

P 0.80 Mn MT3

1

P 2.35 Mn MT

4P 0.70 Mn MT

P 0.72 Mn MT

5

2

P 1.67 Mn MT

• 2nd in inland fish production

• Presence of Sunderban- Richest fish bio

diversity spot in India

• Highest marine

fish producer

• Tops in terms of

processing

infrastructure

capacity

• Highest freezing

capacity

• Number of

processing plants

are highest in Kerala

(Kochi)

• Highest no. of cold

storage

• Highest storage

capacity

• AP tops in total fish and in inland fish

production

• 2nd highest marine fish producer

• Tamil Nadu has the 2nd largest coastal

line in the country consisting of 4 coastal

zones

• Also has 3 major shipping harbours-

Chennai, Toothukudi & Chinnamuttom

P – Production

– Rank in Fish Productionx

Disclaimer: Maps depicted in the report are graphical representation only and do not purport to be the political map of any nation or state and are not drawn to scale


Meat

India has the world’s largest population of livestock and a large part of it is contributed by small and marginal farmers who own one to two animals. Livestock plays a vital role in the agricultural economy and is a key contributor to the socioeconomic well-being of rural masses. According to the 19th livestock census, there are about 300 Mn bovines (cattle, buffalo, yaks, and mithun), 65 Mn sheep, 135 Mn goats and about 10 Mn pigs in India.

The total meat production in India currently stands at about 7 Mn MT (2015-16) and has witnessed a growth of 6% in the last six years (2010-11 to 2015-16). The meat industry in India can be broadly classified into two segments: poultry (46%) and meat from other animals including buffalo (23%), pig (6%), goat and sheep (20%).

Exhibit 7: Growth in meat production in India (Volume in Mn MT)

Source: Department of Animal Husbandry, Dairying and Fisheries

4.95.5

5.9 6.26.7 7

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16


Source: Department of Animal Husbandry, Dairying and Fisheries

46%

23%

13%

7%

6%5%

Poultry

Buffalo

Sheep

Goat

Pig

Others

Unlike all other categories, only buffalo meat is the major export oriented produce from India.

Rising demand for low-cost meat from developing nations over the last decade has propelled India’s growth in the meat segment. India exported meat worth USD 4 Bn in 2016-17, led by Bovine exports worth USD 3.9 Bn followed by Sheep carcasses worth USD 0.1 Bn. India is currently the leading exporter of water-buffalo beef and sheep carcass, capturing more than 20% and 40% of the world export market respectively. The major export destinations for Indian buffalo meat include Vietnam, Malaysia, Egypt Arab Republic, Indonesia and Saudi Arabia. The buffalo meat exported by India is mostly raw, de-boned chunks, used primarily in the processed and canned food industry.

The major meat production centres in the country for exports are Aurangabad; Nanded; Mumbai and Satara in Maharashtra; Goa; Zaheerabad and Medak in Telangana; Derabassi in Punjab; Barabanki, Unnao, Aligarh, Meerut, Saharanpur, Noida and Ghaziabad in Uttar Pradesh; Mourigram in West Bengal; and Gurgaon in Haryana.

The Government of India has taken steps for modernization of municipal abattoirs to provide safe and hygienic meat to consumers. Export oriented units have invested significantly in establishment of large abattoirs-cum-meat processing plants with the latest technology. Farm automation, abattoirs, logistics, processing and point of sale cold storage infrastructure are an opportunity in India, given the changing preference of Indian consumers for clean, safe and hygienic meat and meat products.

India’s Buffalo meat is preferred worldwide:

• Green livestock production system

• No practice of using hormones, medications for fattening of animals

• Free from major diseases

• Low in fat and cholesterol

• Slaughtered through “Halal” method

• Blends well with other meat

Exhibit 8: Contribution of various species in Meat Production


Key production states for Meat

Goa

Assam

Mizoram

Nagaland

Sikkim

Tamil Puducherry

Nadu

Jharkhand

Delhi

Andhra Pradesh

Telangana

West Bengal

Arunachal Pradesh

Meghalaya

Manipur

Islands

Madhya Pradesh

Maharashtra

Bihar

Chhattisgarh

Uttarakhand

Odisha

Karnataka

Himachal Pradesh

Punjab

Jammu and Kashmir

Gujarat

Lakshadweep

Uttar Pradesh

Rajasthan

Tripura

Haryana

Chandigarh


DamanDiu

Kerala

• AP produces 8% of the total meat production (0.5 Mn MT). The state is key producer of sheep meat

• 0.6 Mn MT production. Share of 9.8%. WB is a key producer of poultry and pork.

• 1.4 Mn MT production.

Share of 20%.

UP is the largest producer of buffalo meat and pork.

• Also a major player in mutton market

•

•

• North Eastern states account for about 60% of pork slaughter and consumption.

• Maharashtra is a leading producer of processed pork which transports its live animal surplus to other parts of the country.

• Tamil Nadu is a leading producer and consumer of buffalo and poultry meat.



Spices

India is known for its spices not only because of the production quantum and diverse range but also because of their rich aroma, taste and texture.

The diverse climatic conditions - from tropical to sub-tropical to temperate-almost all spices grow splendidly in India.

The area and production of spices has seen a constant increase in the last 5 years. Spices have also played a very important role in the economy of India. The trade in spices is one of the oldest

Today, Indian spices are the most sought-after globally, given their exquisite aroma, texture, taste and medicinal value. The country produces about 75 of the 109 varieties listed by the International Organization for Standardization (ISO). The current production of spices stands at over 7 Mn MT, spread across an area of about 3.5 Mn Ha.

and has been one of the most important forms of commerce. Like the trade of silver and gold, spice trade connected many different civilizations and helped the growth of global contact.

India has the largest domestic market for spices in the world. It is also the world’s largest producer and exporter.

The country accounts for over 18% of the global trade and within the Indian agri export basket the spices rank 7th in terms of Value contribution.


Exhibit 9: Growth in Area and Production of spices in India

Exhibit 10: The key spices produced in India and major states

3.2

5.8

3.1

5.8

3.2

6.2

3.5

6.9

3.5

7.1

A P A P A P A P A P

2012-13 2013-14 2014-15 2015-16 2016-17

CAGR 2%

Source: Ministry of Agriculture and Farmers Welfare, 2016-17

Source: Ministry of Agriculture and Farmers’ Welfare, 2016-17

Spice Production (Mn MT)

Garlic 1.6

Chilies 1.5

Ginger 1.1

Turmeric 0.9

Coriander 0.6

Cumin 0.5

Fenugreek 0.2

Tamarind 0.2

Fennel 0.1

Pepper 0.1

Total 7.0

Spice Production (Mn MT)

Gujarat 1.08

Rajasthan 1.06

North East Region 0.78

Andhra Pradesh 0.77

Madhya Pradesh 0.71

Telangana 0.44

Maharashtra 0.42

Karnataka 0.39

Assam 0.33

West Bengal 0.33

Uttar Pradesh 0.22

The global trade of spices is around USD 10 Bn of which around 18% is contributed by India. The key exporters of spices include India, China and Vietnam. The global imports of spices is growing at an average annual growth rate of 7%. In terms of the value of world trade, pepper, cardamom, ginger, turmeric, capsicum/chili, cinnamon nutmeg/mace, cloves, pimento and vanilla are the most important spice crops from tropical regions and cumin, coriander, sesame seeds, sage, bay, oregano thyme and mint are the spices crops from the non-tropical regions.

Area in Mn Ha Production in Mn MT


During 2016-17, a total of 9,47,790 MT of spices and spice products valued INR 17,665 crores (USD 2633 Mn) has been exported from the country as against 8,43,255 MT valued INR 16,238 crores (USD 2,483 Mn) in 2015-16 registering an increase of 12% in volume, 9% in rupee terms and 6% in dollar terms. USA, China, Vietnam and Indonesia are the key importers of Indian spices. These countries contribute close to around 40% to India’s exports.

The Indian spices exports have been able to record strident gains in volume and value. Spices exports have registered substantial growth during the last five years, registering an average growth rate (CAGR) of 10% in rupee terms and 5% dollar terms of value and India commands a formidable position in the World Spice Trade.

Exhibit 11: Growth in Exports of spices from India

Q=Quantum in 000MT; V=Value in USD Mn

Source: Spice Board

Source: Spice Board

Exhibit 12: Major export destination for spices (Value in USD Mn)

USA ChinaVietnam Indonesia

445

210

162 149


Key production states for Spices

Goa

Assam

Mizoram

Nagaland

Sikkim

Tamil Nadu

Puducherry

Jharkhand

Delhi

Andhra Pradesh

Telangana

West Bengal

Arunachal Pradesh

Meghalaya

Manipur

Islands

Madhya Pradesh

Maharashtra

Bihar

Chhattisgarh

Uttarakhand

Odisha

Karnataka

Himachal Pradesh

Punjab

Jammu and Kashmir

Gujarat

Lakshadweep

Uttar Pradesh

Rajasthan

Tripura

Haryana

Chandigarh


DamanDiu

Kerala

Andaman & Nicobar Islands

• Second largest producer of spices

• Total production of 1.06 Mn MT

• Key spices - Garlic, Fennel, Coriander, Cumin

• Largest producer of Spices in India

• Production of 1.1 Mn MT

• Key spices- Ginger, Garlic, turmeric, Fennel


Key Spices- Chili, Turmeric•


Key Spices-Chili, Turmeric•

• Total Production of 0.71 Mn MT

Key spices- Chili, Garlic, Coriander

•

North Eastern Region

• Region is one of the key producers of Spices

Key spices- Ginger, Turmeric, Chili, Large Cardamom, Cinnamon

• USP of spices- Organic/Chemical free

•



Tea

Tea is India’s primary beverage, with almost 85% of total households in the country consuming tea. The industry is one of the oldest agro-based and well organized industries in India. Indian tea industry provides direct employment to more than one million people and about thrice the number indirectly. India produces around 1.2 Mn MT of Tea annually. The key producing states include, Assam, West Bengal, Tamil Nadu, Kerala and Karnataka.

India is also an important tea exporter, with around 9% of world tea exports. Further, certain varieties of tea (for example Darjeeling) are grown only In India and are in great demand across the world. Darjeeling tea is one its kind premium tea known for its color and flavor and cannot be grown in any other part of the world.

Some of the major teas produced in India include:

• Darjeeling Tea: Darjeeling Tea is one of the finest teas globally. Darjeeling Tea possesses a flavour and quality, which sets it apart from other teas. Due to the altitiude and climatic conditions of the place of origin, Darjeeling Tea is unique and cannot be grown in any other part of the world.

• Assam Tea: Assam Tea has a rich, deep-amber colour and is famous for its rich, full-bodied cup. It is known for its brisk, strong and malty character, making it a perfect tea to wake up to. The distinctive second flush orthodox Assam teas are valued for their rich taste, bright liquors and are considered to be one of the choicest teas in the world.

• Nilgiri Tea: Nilgiri tea is dark, intensely aromatic, fragrant and flavoured tea grown in the southern portion of the Western Ghats mountains of Southern India.

• Kangra Tea: Kangra tea is known for its unique color and flavor. The unique characteristics of the tea is attributed to the geographical properties of the region.


India exported 228 Mn Kg of tea worth USD 690 Mn in 2016-17. Thy key importers of Indian tea include Russia, Iran, USA, UAE and Germany. Together these account for around 60% of India’s total exports

The contribution of black tea is maximum to exports 98%, and a minor part is contributed by green tea 2%.

India’s unit value of tea also stands competitive with the global market. The average unit value of tea exported from India currently stands at USD 2870/MT, while the global average is around USD 3770/MT. Countries like China, SriLanka, Germany have much higher per unit values. The value of Indian tea is so competitive because of the reasonable labor rates prevailing in India and tea being a labor intensive sector, has a significant bearing on the cost of production.

Exhibit 13: Export of Tea to various countries (2016-17) in USD Mn

Exhibit 14: Export of different variants of tea from India

Source: Tea Board

Source: ITC Trade map

2%

98%

Green tea Black tea

98 93

57 53 4837

Russia Iran USA UAE UK Germany

Exhibit 15: Comparison of average prices of major tea exporters (USD/MT)

Source: ITC Trade map

4476 4365

2873 2871

9157

3771

China Srilanka Kenya India Germany GlobalAverage


Key production states for Tea


Goa

Assam

Mizoram

Nagaland

Sikkim


Jharkhand

Delhi

Andhra Pradesh

Telangana

West Bengal

Arunachal Pradesh

Meghalaya

Manipur

Islands

Madhya Pradesh

Maharashtra

Bihar

Chhattisgarh

Uttarakhand

Odisha

Karnataka

Himachal Pradesh

Punjab

Jammu and Kashmir

Gujarat

Lakshadweep

Uttar Pradesh

Rajasthan

Tripura

Haryana

Chandigarh


DamanDiu

Kerala

• Known for its darjeeling tea, WB is the second largest tea producer

• Darjeeling Tea is one of the finest teas globally

• Assam is the largest producer of tea in India

• It is also the largest contigous lnd under tea plantation.

• Tamil Nadu is known for its Nilgiri tea

• Nilgiri tea is generally described as being a dark, intensely aromatic, fragrant and flavoured tea.

• The Temi Tea estate in Sikkim is considered one of the best not only in India but globally as well.

• Top quality tea is produced, which is in demand in the international market.


Fruits and Vegetables

With a production of over 259 Mn MT, India is the second largest producer of the Fruits and Vegetables in the world. The country is the world’s largest producer of bananas, papaya, mangoes and guavas, and the second largest producer of potatoes, green peas, tomatoes, cabbage and cauliflower, fourth largest producer of citrus fruits and the fifth largest producer of apples. The production volumes for major fruits & vegetables are:

India witnesses nearly 5-18% wastage in fruits and vegetables annually due to inappropriate harvesting practices and inadequate cold chain infrastructure. Moreover, the processing levels in F&V currently stand at less than 2%. This offers an opportunity to invest in initiatives that help reduce wastage levels including adequate infrastructure including cold chain, processing infrastructure, R&D for processable grades development, packaging, innovative on farm preservation systems and skill development.

Exhibit 16: Production of key fruits and vegetables

Commodity Production Volume (Mn MT) Commodity Production Volume (Mn MT)

Banana 29.7 Potato 41.5

Mango 18.4 Tomato 19.4

Citrus 11.1 Onion 18.7

Papaya 5.6 Brinjal 13.5

Guava 3.6 Cabbage 9.0

Source: Ministry of Agriculture and Farmers Welfare (2016)


Exhibit 17: Procurement and processing opportunity in India

Fruits/Vegetables

State Processing Opportunity

Mango Andhra Pradesh, Uttar Pradesh, Karnataka, Bihar, Gujarat, Telangana

Frozen (IQF), canning, pulp, puree, paste, sauces, snacks, dressings, flakes, dices, dehydration, pickles, juices, slices, chips, jams, jelly, RTS drinks

Grapes Maharashtra, Karnataka, Tamil Nadu, Andhra Pradesh, Telangana

Pomegranate Maharashtra, Karnataka, Gujarat, Andhra Pradesh

Banana Andhra Pradesh, Karnataka, Gujarat, Tamil Nadu, Maharashtra

Citrus fruits Andhra Pradesh, Telangana, Maharashtra, Madhya Pradesh, Punjab

Pineapple Kerala, West Bengal, Assam, Karnataka, Tripura

Green Peas Uttar Pradesh/Uttarakhand, Madhya Pradesh, Jharkhand, Himachal Pradesh, Punjab

Onion (white onion)

Maharashtra, Karnataka, Madhya Pradesh, Gujarat

Potato Uttar Pradesh, West Bengal, Madhya Pradesh, Bihar, Gujarat

Uttar Pradesh, Andhra Pradesh, Maharashtra, Gujarat and Karnataka are the leading producers of fruits in India, having a combined share of around 51% in the total fruits production. For vegetables, major producers include Uttar Pradesh, West Bengal, Madhya Pradesh, Bihar, and Gujarat, together accounting for around 55% of the national production.

In 2016-17, India exported fruits and vegetables worth USD 1,552 Mn which comprised of fruits worth USD 667.51 Mn (43%) and vegetables worth USD 5,922 Mn (57%). Mangoes, Walnuts, Grapes, Bananas, Pomegranates account for the major portion of fruits exported from the country while Onions, Okra, Bitter Gourd, Green Chilles, Mushrooms and Potatoes contribute largely to the vegetable export basket.

The major destinations for Indian fruits and vegetables are UAE, Bangladesh, Malaysia, Netherland, Sri Lanka, Nepal, UK, Saudi Arabia, Pakistan and Qatar.

With India’s increasing focus on quality, consistency and food safety, the acceptance of Indian fruits and Vegetables is increasing worldwide. Apart from large investment pumped in by the private sector, public sector has also taken initiatives and with APEDA’s assistance several Centers for Perishable Cargoes and integrated post-harvest handling facilities have been set up in the country. Capacity building initiatives at the farmers, processors and exporters’ levels has also contributed towards this effort.

Source: National Horticulture Board, YES BANK analysis


FRUITS AVAILABILITY MAP OF INDIA

Commodities

Production ( in Lakh MT)

Surplus De�cit

Sources: National Sample Survey Office, National Horticulture Board, State Government Portals

The map highlights the top three production states for 15 major Fruits, which constitute over 90% of the total Fruits produced in India.

The map highlights the top three surplus and deficit states for 14 major Fruits produced in India.

Goa

Assam

Mizoram

Nagaland

Sikkim

Tamil NaduPuducherry

Jharkhand

Delhi

Telangana

Andhra Pradesh

West Bengal

Arunachal Pradesh

Meghalaya

Manipur


Islands

Kerala

Madhya Pradesh

Maharashtra


DamanDiu

Bihar

Chhattisgarh

Uttarakhand

Odisha

Karnataka

Himachal Pradesh

Punjab

Jammu and Kashmir

Gujarat

Lakshadweep

Uttar Pradesh

Rajasthan

13.5

51.3

4.1

1.2

Tripura

2

2.7

Haryana

26.9 15.1 13.4

0.4

2.7

2.2

0.6

1.7

2.943.8 4.2 3.6 6.2

1.1

0.8

0.8

12

8.0

3.7

0.4

0.2

0.2 2.6

3.11.90.9

0.6

0.5

0.3

19.5

4.6

1.7

18

2.1

3.2

0.2

3.3

1.53.7

3.0 36.020.54.13.7

Banana Mango Citrus Fruits Papaya Grapes Apple PineappleWatermelonGuava LitchiJackfruitPomegranate AonlaMusk Melon Sapota

11.945.21.1

0.83.1

Chandigarh

Fruits availability in India



VEGETABLES AVAILABILITY MAP OF INDIA

Commodities

Production ( in Lakh MT)

Surplus De�cit

Goa

Assam

Mizoram

Nagaland

Sikkim

Tamil NaduPuducherry

Jharkhand

Delhi

Andhra Pradesh

Telangana

West Bengal

Arunachal Pradesh

Meghalaya

Manipur


Islands

Kerala

Madhya Pradesh

Maharashtra

Bihar

Chhattisgarh

Uttarakhand

Odisha

Karnataka

Himachal Pradesh

Punjab

Jammu and Kashmir

Gujarat

Lakshadweep

Uttar Pradesh

Rajasthan

Tripura

Haryana

The map highlights the top three production states for 15 major Vegetables which constitute over 85% of the total Vegetables produced in India.

The map highlights the top three surplus and deficit states for 14 major Vegetables produced in India.

5.3

18.7

26.9

6.9

4.0

19.123.9

46.6

29.6

21.8

18.6

8.7

115.9

4.9

144.3

24.6

2.9

2.2

3.6

2.2

27.21.9 3.3

1.2

45.2

21.911.5 4.1

2.6

1.3

2.4

7.8 11.9 8.5 2.766.4 8.0

3.0

3.0

13.47.2

1.1

Potato Tomato Onion Brinjal Cabbage Cauli�ower Okra Peas Radish BeansTapioca Carrot Sweet Potato Pumpkin/GourdCucumber

23.41.3 0.8

0.6

Sources: National Sample Survey Office, National Horticulture Board, State Government Portals

Chandigarh


DamanDiu

Vegetables availability in India



Organic Food

Estimated at USD 80 Bn in 2015, the global organic food market has been growing at a CAGR of around 12% for last 14 years. Europe and North America together generate about 90% of the global organic food sales.

(US

D M

n)

Exhibit 18: Country-wise estimated organic market size

05,000

10,00015,00020,00025,00030,00035,00040,00045,000

Source: FiBL


Globally, 50.9 million hectares of agricultural land is under organic farming, which accounts for 1.1% of the land under agriculture. The key organic crops which occupy the maximum area include grassland/grazing land, cereals, green fodder, oilseeds, protein crops, vegetables, coffee, olives, nuts and cocoa.

India stands amongst the top 10 countries (9th position) with maximum land under organic farming and has witnessed a significant increase in the organic farmland.

The latest estimates by APEDA indicate that the total area under organic cultivation in India including wild area is close to 5.7 million Hectare (2015-16). This includes 26% cultivable area with 1.49 million Hectare and rest 74% (4.22 million Hectare) forest and wild area for collection of minor forest produces. The area under certification has been on a constant increase witnessing a growth of 7% (CAGR) since 2003.

India holds the top position in the number of farmers involved in organic agriculture in any country. The number currently stands at more than 0.5 million

Exhibit 19: Growing area under Organic certification in India (Wild harvest and farm area)

Exhibit 20: Growth in certified farm area in India

0

1

2

3

4

5

6

Are

a in

mill

ion

ha

Source: The Agricultural and Processed Food Products Export Development Authority, APEDA


0

2

4

6

8

10

12

14

16

Are

a in

lakh

ha

Decline due to loss in cotton area due to BT


Under organic cultivation, India produces sufficient quantum of oilseeds, sugar crops, cereals, millets etc.

Exhibit 21: The key categories of food that are produced organically in India

Exhibit 22: Trend in organic exports from India

Category Production in MT

Oil seeds 300,057

Sugar crops 281,713

Cereals and millets 196,221

Fiber crops 155,136

Pulses 62,676

Medicinal, Herbal and Aromatic 33,477

Plantation crops 47,837

Spices and condiments 36,240



Currently the Indian Organic food sector is primarily driven by Exports. However, the current Indian exports are predominantly non- value added commodities. The industry is now moving towards preliminary levels of value addition for organic produce. India exported around 3 lakh MT of organic products worth USD 370 Mn in 2016-17. The exports of organic products have increased at a CAGR of around 15% in volume terms and 17% in value terms.

The organic produce from India is majorly exported to the European Union and USA. Both these contribute to more than 80% sales of the Indian organic produce.

0

500

1000

1500

2000

2500

3000

3500

2012-13 2013-14 2014-15 2015-16 2016-17

Value in Rs Crore

Quantity 00 tons


The key categories of export from India include oilseeds (largely soybean), cereals (majorly rice), millets, processed food, tea and pulses.

Exhibit 23: Key export destinations for organic produce from India (INR Crore)

Exhibit 24: The key export categories in organic

166.3 145.4

28.8 8.4 6.3 3.0 1.3 1.2

EuropeanUnion

USA Canada Switzerland Australia Japan S. Korea NewZealand



Rank Crop commodity Quantity in lakh MT

1. Oil seeds 1.32

2. Cereals and millets 0.44

3. Processed foods 0.67

4. Tea 0.054

5. Pulses 0.048

7. Dry fruits 0.024

8. Spices and condiments 0.030

9. Medicinal 0.022

10. Coffee 0.022


Key States producing Organic Food

Goa

Assam

Mizoram

Nagaland

Sikkim


Jharkhand

Delhi

Andhra Pradesh

West Bengal

Arunachal Pradesh

Meghalaya

Manipur

Islands

Madhya Pradesh

Maharashtra

Bihar

Chhattisgarh

Uttarakhand

Odisha

Karnataka

Himachal Pradesh

Punjab

Jammu and Kashmir

Gujarat

Lakshadweep

Uttar Pradesh

Rajasthan

Tripura

Haryana

Chandigarh


DamanDiu

Kerala

Telangana

• The first and only fully organic state

• Total area of 76000 Ha converted to organic

• Ginger, Turmeric, Buckwheat, Large Cardamom are the key crops



Indian Ethnic Food and Superfoods

The Indian Food Culture is exceptionally vast and diverse. The food habits, cooking style, use of ingredients and even the means of serving and presenting exorbitantly vary across the states. The Indian traditional food is a vivid mixture of art and science. While the food provides a sumptuous taste, the ingredients capture the nutritional aspect of providing healthy and wholesome food. Cuisines in India represents the history, cultural aspects, and religious beliefs of Indians. Ready to Cook/Ready to Eat food with numerous variants of lentils, rice, biryani, parathas, idli (cakes made by steaming a batter consisting of fermented black lentils and rice) and dosa (dosa is a type of pancake made from a fermented batter. It is somewhat similar to a crepe in appearance) have emerged as a new category that is growing exponentially in India and abroad.

The geographic diversity in food is also worth noting. The different regions of India have varying tastes and their own specialities.

Ready to Cook/Ready to Eat/ Instant mixes of Indian traditional food has found numerous takers outside the country, not only from the Indian diaspora but also the other lovers of Indian food. The export market of RTC/RTE products is dominated by cereal based products followed by vegetable-based and meat-based products.

Increasing ease for movement of goods has made it easy to access Indian food stuff, resulting in increase in exports from India to counties with large Indian diaspora presence. This has also led to several innovations taking place to increase the shelf life of products (through preservation or packaging) and also easing out the cooking practices through Ready to Eat and Ready to Cook products.

The Indian brands have today reached out to many kitchens in the USA, Canada, UK, Germany, Australia, New Zealand, Middle East, Japan, South East Asian countries amongst others. Ready to eat products like kebabs, biryani, chana, pongal, chicken curries, paneer curries, namkeens and are immensely popular in UK, Canada, Middle East and USA. Entrepreneurs are looking at the Indian traditional food as a big opportunity. Innovations in taste, packaging, fusion food, increasing shelf life and reaching out to new global food lovers is the current trend.


Besides the Indian ethnic food, snacks and sweets, India is also home to a range of Indian traditional food and its ingredients. Most of the traditional ingredients are well known to have impacted the human health positively. Today, many of these have emerged as superfoods which are being accepted globally. There lies immense opportunity to garner these traditional food and present a healthier culinary option to consumers across the globe.

Gooseberry or Amla is among the healthiest food due to its high nutrient content. It is a rich

Jowar/sorghum: Jowar/Sorghum: Belonging to the millet family, this grain has unique health

Turmeric is an excellent source of fiber, vitamin B6, potassium, vitamin C, and magnesium. Its

source of antioxidants, iron, vitamin A, C, fiber, potassium, magnesium, calcium, etc. It is effective in preventing cancer or tumor cell growth. It also improves eye health, improves hair luster, skin and anemia. Today, amla is finding extensive usage in health juices and drinks. India produces around 1 Mn MT of gooseberry annually.

benefits for humans. When compared to rice and wheat, Sorghum has a higher content of calcium. Besides calcium, it is also packed with iron, protein and fibre. Moreover, jowar is gluten free. The millet presently finds its usage in multigrain flours, breads and cookies and can be further used to prepare pizza bases, burgers, bakery

incredible list of healing properties include antioxidant, anti-viral, anti-bacterial, antifungal, anti-carcinogenic, anti-mutagenic and anti-inflammatory. India produces around 1 Mn MT of Turmeric annually. “Golden milk” or turmeric latte – a combination of nut milk and juiced turmeric root – is becoming one of the most sought after drink in many countries. Turmeric is also becoming a sought after produce for the pharmaceutical, nutraceutical and cosmetic industry due to its active ingredient “Curcumin”.

Moringa is one of the most nutrient-rich plants in the world. It is a rich source of iron, vitamin A & vitamin K, vitamin E, calcium & magnesium. Moringa also has one of the highest antioxidant contents of any food. One of the best moringa benefits is its super immune-boosting powers. Maintaining a healthy immune system is essential for helping our bodies stay off infections and illnesses.


Ghee/Clarified butter has been used in India for thousands of years. Today it is being considered as

Ragi (finger millet) is high in protein and minerals in comparison to most other cereals and millets.

traditional food like idli, dosa, upma, and also for products like noodles, pasta, vermicelli, snacks and savories. Ragi has immence potential to be used as an ingredient in the infant food segment.

a superfood globally. Ghee is rich in antioxidants and essential fatty acids which protect the body from various diseases, improve absorption of fat soluble nutrients, nourish and lubricate the joints, and improve memory. Ghee finds its usage as a cooking medium for sauté, glazing and frying. It is now available on global online platforms as well, due to its growing demand across countries and populace.

Tamarind is an antibacterial agent and takes care of the heart by diminishing the bad cholesterol level. It is also said to obstruct kidney stone formation and therefore, acts as a medicine for stone sufferers. Tamarind has been an integral part of the Indian traditional food especially in south India. It now finds its usage extensively in candies, sauces and dressings. India produces around 194,000 MT of Tamarind annually.

It contains important amino acids—isoleucine, leucine, methionine and phenyl alanine which are not present in other starchy meals. Also it is a very rich source of calcium and potassium. Low in fat and gluten free, ragi is easy to digest. It is for that reason, given as first food to babies in the form of porridge. Ragi is today being used as an ingredient in various value snacks and savories to add the “healthy element” to food. Ragi can be used as an ingredient for Indian


Investment Opportunity in India3


9. Investment Opportunity in India

Why Invest in India?

A rich agriculture resource base - total of 127 agro-climatic zones which enable diverse production

Key producer of milk, fruits, vegetables, fish, cereals, spice, tea and many other commodities

Attractive fiscal incentives

Major policy reforms for ease of doing bussiness

The cost of skilled manpower is relatively low as compared to other countries.

Strategic geographic location

Extensive network of food processing training, academic and research institutes


Investment Opportunity - Mega Food ParksThe Government of India through the Ministry of Food Processing Industries has set up 41 Mega Food Parks in India at various locations.

Based on Hub-and-Spoke model, the Mega Food Park follows a cluster-based approach. Mega Food Park is a ready infrastructure with common facilities and necessary permissions that is usually set up neat the production center. The proximity with the production center helps in direct linkage with farmers.

A mega food park is spread over an area of around 50 acres, and typically consists of food processing and supply chain infrastructure including collection centers, primary processing centers, central processing centers. It has around 25-30 plots and plug and play facility for potential entrepreneur to come and setup their food processing units.

The facilities in the Mega Food Park vary as per the location and key agri/horti produce grown near the Mega Food Park. The MFPs are equipped with common facilities which a player can use as per the requirement of business, like Ripening chambers, IQF, ETP, Warehouse, Cold and Frozen storage, Standard Factory sheds, Business center, Admin Building, Canteen for workers etc.

For setting up this mega food park, the Government of India provides a subsidy of 50% of the eligible project cost capped upto 50 crores. Around 41 mega food parks are being set up in different states of India, out of which 9 are already operational.


Mega Food Parks In India


A mapping of the Mega Food Parks is provided below.

Dimapur

Pulwama (17.5)

Kapurthala (26.2)

Haridwar (38)

Udham Singh Nagar (30)

Ranchi (29)

Bokaro

Raipur (32)

Khurda (88.8)

Rayagada (26)

Khammam (26.7)

Krishna (17)

Chittoor (35)Tumkur (57)

Mandya

Coimbatore

Alappuzha (46.6)

Palakkad (49.6)

Nizamabad (32)

MedakSatara (34)

Wardha (28.7)

Aurangabad (70)

Ajmer (40)

Surat(38)

Khargone(24)

Mandsaur

Rohtak

Dewas (25.5)

Mahbubnagar (61.4)

W. Godawari (22)

Khagaria (39)

Nalbari (28)

Ludhiana (53.1)

Fazilka (26)

Sonipat (44.3)

Mehsana

W. Tripura(17)

Murshidabad (46)

Aizawl (23)

In Operation

In Progress

Number in ( ) depict the leasable area (in acres) for the respective Mega Food Park

Una (26)

ASSAM

MIZORAM

NAGALAND

SIKKIM

TAMIL NADU

Kerala

JHARKHAND

ANDHRA PRADESH

TELANGANA

WEST BENGAL

ARUNACHAL PRADESH

MEGHALAYA

MANIPUR

MADHYA PRADESH

MAHARASHTRA

BIHAR

CHHATTISGARH

UTTARAKHAND

ODISHA

KARNATAKA

HIMACHAL PRADESH

PUNJAB

JAMMU AND KASHMIR

GUJARAT

UTTAR PRADESH

RAJASTHAN

TRIPURA

HARYANA


Investment Opportunity- Cold ChainIndia produces more than 400 Mn MT of perishables every year (horticultural produce+ dairy+ meat+ poultry + fish). However, the wastage levels in perishables in India are significantly high.

• 4.6- 15.9% in fruits

• 5.2% in inland fish

• 10.5% in marine fish

• 2.7% in meat

• 6.7% in poultry.

The estimated annual value of losses of agri produce currently stands at close to INR 92,651 crores. Annual value of losses in fruits and vegetables, meat, fish and milk is estimated at INR 58,478 crores.

The capacities of cold chain are largely concentrated in 2 states- including Uttar Pradesh and West Bengal. This is largely due to potato cold storages prevalent in both the regions. The potato growing belt of both these states have large cold storage capacities, however these are meant for single commodity-potato. Most of these cold storages have conventional technologies in place. In India, potatoes accounted for 70-75% of total volumes handled, followed by multipurpose storage which accounted for 25-30%.

This is largely due to the huge gap that exists in the cold chain infrastructure from farm gate to Consumers. A baseline survey conducted by National Horticulture Board (in Dec 2014) estimates the total cold storage capacity in India at 31.8 million MT. The National Centre for Cold Chain Development (NCCD) has identified a gap of around 3.2 Mn MT in cold storage capacity, more than 69,000 pack houses, more than 50,000 reefer vehicles and a gap of around 8,000 ripening chambers in India. 92% of cold storages in India are owned and operated by private sector.

Exhibit 25: distribution of cold chain in India

41%

17%

8%

6%

5%

4%

19%Uttar Pradesh

West Bengal

Gujarat

Punjab

Andhra Pradesh

Bihar

Others

Source: CRISIL Research


However, large unfulfilled gap exists in the sector for investments in cold storage, CA storage, reefers, ripening chambers, IQF, milk chilling and processing etc. Requirement for cold chain across all states.

The cold chain industry in India comprises of two major segments i.e. Temperature Controlled Warehouses (TCW) and Temperature Controlled Vehicles (TCV). The total industry size in 2016-17 was estimated at USD 3.95 billion with Temperature Controlled Warehouse USD 3.67 billion and Temperature Controlled Vehicles USD 0.28 billion comprising of 90% and 10% of market shares respectively.

The cold chain segment grew at a CAGR of 11-13% in the last five years (2011-12 to 2016-17) and is expected to reach USD 7.9 billion by the year 2021- 22 with a CAGR of 14-16% during the period 2017-18 to 2021-22.

There lies immense potential to upgrade the existing cold chain systems through new and innovative technological solutions and also set up new cold storage that are multipurpose. The focus of the sector in India is now shifting towards establishing end-to-end cold chain and not just storage. Besides this, there exists ample opportunity to modernize existing stores, setting up Modern packhouses, Ripening Facilities, Farm-gate or source point cold storage and Energy efficient technology. Utilizing solar energy to run cold chain is becoming prevalent in the country.

Other Investment opportunities include:

Research and development to introduce new varieties for domestic as well as export market. Also R&D for product development as per consumer preference and for

enhanced shelf life.

Setting up food testing laboratories that are technologically equipped to carry out tests at ppm levels, detect minor aduterants, toxins etc. and ate time and cost efficient.

Setting up processing unit for which the Government of India through ministry of Food processing Industries is also providing grant under its scheme of SAMAPADA

Setting up of processing infrastructure for exports for which APEDA provides grant

New Packaging technology for enhanced shelf life, retaining taste and texture, attractive, easy to handle and space efficient

Modern storage facilities & logistics


Conclusion4


10. Conclusion

India is a land of golden opportunities. With a large and diverse food production base, the world’s second largest consumer base, a fast growing economy and a conducive regulatory environment, the country has become a leading investment destination. This is reflected in the over USD 7 Bn worth of Foreign Direct Investment (FDI) that the Indian food processing sector has attracted in the past decade. The food and beverage sector, in particular, is being closely monitored by global agribusiness giants eyeing both trade and investment opportunities.

The reforms being implemented in India are aimed towards creating a congenial business environment in the country.

The new, unified and rationalized tax structure under the Goods and Services Tax (GST) regime subsumes a slew of complex indirect taxes across the nation. Farm, food and agribusiness sector in India has hitherto been subject to multiple direct, indirect and implicit taxation from inputs to the end product. Simplification and uniformity of taxes across states is therefore a much welcome move for the food and beverage sector.

The other major policy incentives currently offered by the central Government for the food industry are:

• 100% FDI is permitted under the automatic route in food processing industries and through approval route for trading, including through e-commerce in respect of food products manufactured and/or produced in India.

• 100% export-oriented units allowed to sell up to 50% of their produce in the domestic market. Export earnings exempt from corporate taxes.

• 100% Tax Deduction on Cold Chain CAPEX and Profit for new food processing and packaging units

• Loans to food & agro-based processing units and Cold Chain have been classified under Agriculture activities for Priority Sector lending (PSL)

• A fund of INR 2,000 crores has also been constituted with NABARD to provide loans at concessional rates to Mega Food Parks and units established therein.

• Recently launched a USD 1 Bn Kisan SAMPADA (Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters) scheme.

Other than this, for maintaining highest quality standards and keeping in view the different country requirements, State-of-the-art packhouses, internationally recognized treatment facilities like Hot water treatment, Vapour heat treatment and Irradiation facilities have also been set up at various locations across the production belt.


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opportunities for f d imports from india - yes bank · mohit singla chairman trade promotion...

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