Investments

Between 1991 to November 2006 the total inflow of foreign direct investment in the food-processing sector accounts Rs 52.7 bn (US$ 1.2 bn). The highest investment towards the food-processing sector in a single year was recorded in 2001-02 amounting to Rs 10 bn. During the last five years, FDI witnessed an inflow of over Rs 24 bn of foreign investment.

During the last five years Maharashtra received the highest share of FDI in food processing. The dairy and consumer industries received FDI worth Rs 2.7 bn each as foreign investment. Countries of European Union such as Netherlands, Germany, Italy and France contribute nearly 30% of FDI in food-processing sector. Perfetti, Cadbury, Godrej-Pilsbury, Nutricia International, Manjini Comaco are some of the successful ventures from EU countries.

Major Food Processing Companies in India

Major MNCs	Major Indian Companies	Indian MNCs likely to enter
Nestle, Pepsi,Coke, Kelloggs, Conagra, Unilever,Perfetti, Glaxo Smithkline, Heninz, Wyeth, Ajinomoto, Nissin met, Walmart	ITC, Dabur, Britannia, Parle, Amul, Haldiram, Godrej, Venky's	Reliance, Bharti Group, Tatas, Wipro, Thapars etc.

With the advent of the multinational companies in the Indian market the competition in food processing industry has increased. These multinational companies are facing tough competition from strong Indian brands. Such competition has obviously increased innovations. It has also facilitated a sustained growth of the sector and improved global competitiveness. The emerging new growth phase of the sector is just in its initial stages with the potential for India to emerge as a leading food supplier to the world.

Exports

There has been an encouragement for new processing capacities for agro-food products through its various policy initiatives and plan schemes providing financial incentives for setting up of new units and modernization of existing units from the Ministry of Food Processing Industries.

Export of Processed Food products (2004-05)

Items	Quantity	Value
Processed Fruits and Vegetables
Dried and Preserved Vegetables	351034.32	765.75
Mango Pulp	90988.6	300.86
Pickle and Chutney	67193.29	120.58
Other Processed fruits and Vegetables	80760.5	275. 53
Total for Processed Fruits and Vegetables	589976.71	1462.72
Animal Products
Buffalo Meat	306970.81	1615.59
Sheep/ Goat Meat	8885. 28	79.36
Poultry Products	264607.54	154.11
Dairy Products	48426.79	389.14
Animal Casings	552.33	12.57
Processed Meat	107.45	1.56
Total for Animal Products	629550.2	2252.33
Other Processed Foods
Groundnuts	177114.96	503.00
Guargum	129648.47	664.28
Jaggery and Confectionary	35549.29	77.00
Cocoa Products	2273.85	27.30
Cereal Preparations	49486.85	277.77
Alcoholic and Non- Alcoholic Beverages	30045.49	113.78
Miscellaneous Preparations	52513.73	224.36
Milled Products	140123.27	144.85
Total for Other Processed Food	616755.91	2032.34
Grand Total	1836282.82	5747.39

Investment Opportunities

The areas in investment opportunities in food processing are as follows

• Fruits and Vegetables
• Fisheries
• Meat
• Grains
• Packaged and convenience goods
• Establishing infrastructure, cold chain, etc.

Policy Initiatives

• Most of the processed food items have been exempted from the purview of licensing under the Industries (Development and regulation) Act, 1951, except items reserved for small-scale sector and alcoholic beverages.
• Automatic approval for foreign equity upto 100 percent is available for most of the processed food items except alcohol, beer and those reserved for small-scale sector subject to certain conditions. 
• Food processing industries were included in the list of priority sector for bank lending in 1999.
• In the budget of 2001-2002, excise duty on processed fruit and vegetables has been brought down from 16 percent to zero level in the budget.
• In the 2004-2005 budget, income tax holiday and other concessions announced for certain food processing of India sectors.
• Licensing powers delegated to regional offices under Full Product Order, 1955.