Food processing contributes 7.7% to India’s manufacturing

Valued at US$ 160 billion, India’s food processing sector supports over 7 million jobs across the value chain, directly and indirectly, says a new report. The Deloitte-FICCI report says the food processing sector enabled rural industrialization and reduced post-harvest losses.

Recognizing the immense potential of India’s transformative food processing sector, which is emerging as a vital link between the nation’s agricultural abundance and its expanding consumer market, Deloitte and FICCI launched the new report titled ‘SPURring growth – Driving innovation and unlocking opportunities in the Indian food processing sector.’ 

The agriculture and food processing value chain, which makes up nearly 30% of the national food market, is gaining traction due to rising rural demand, digitisation and policy support, the report says. India’s agricultural exports reached US$ 48.2 billion in FY24, highlighting the sector’s export potential and importance in the global food economy, it said. 

Urban consumers now allocate nearly 50% of their food budgets to packaged and prepared foods, while rural FMCG volumes experienced a 6% growth in Q3 FY24.

The report sheds light on the sector’s significant contribution, accounting for approximately 7.7% of India’s total manufacturing GVA (gross value added), and its critical role in generating employment, fostering rural development and enhancing value addition. 

With a valuation of about US$ 160 billion, the sector reflects India’s economic rise, marked by the country’s rank as the fifth-largest economy and a doubling of per capita income to Rs1.97 lakh over the past nine years. With consumption trends aligning across urban and rural India, Tier-2 and Tier-3 cities are fast becoming engines of economic growth.

“India’s agri and food processing sector is on the brink of a transformative leap, where tradition meets cutting-edge technology to build a future-ready food ecosystem. Consumer demand is shifting towards clean-label, protein-rich and gut-friendly foods, driving a structural evolution in how India consumes food. India is poised to lead the global narrative on health-driven, tech-enabled and inclusive food systems, fueled by advancements in AI, IoT and blockchain,” Anand Ramanathan, partner & consumer industry leader, Deloitte South Asia. 

The opportunity before us is not just to feed a billion, but to do so with purpose, resilience and intelligence. The way forward lies in purposeful collaboration among policymakers, industry players and innovators to build resilient supply chains, empower farmers and entrepreneurs, and cater to a conscious, global consumer. With the right focus, India’s food processing industry can set the benchmark for inclusive, responsible growth in the global food economy,” Ramanathan says.

“India’s food processing sector holds immense transformative potential, both as a driver of economic growth and as a catalyst for inclusive development. As evolving consumer preferences and health-conscious choices reshape food systems, the need for resilience, innovation and value addition has never been greater. The FICCI-Deloitte white paper offers timely insights into how technology, policy support and stakeholder alignment can unlock scalable, future-ready opportunities in this vital sector. This white paper reinforces the sector’s strategic importance in driving sustainable growth and meeting the rising demand for safe, nutritious and affordable food,” Jyoti Vij, director general, FICCI.

Backed by strong policy support and rising consumer consciousness, India’s food processing sector embraces a new wave of innovation and global relevance. However, supply chain inefficiencies remain a challenge, it says. 

Technological integration is driving impact as AI, IoT and analytics streamline operations and embrace resilience. In addition, India’s record agricultural exports of US$ 48.2 billion in FY24 and the global recognition of GI-tagged products highlight the sector’s export potential and its growing role in the world food economy.

To fully unlock the sector’s potential, stakeholders must reimagine growth through continuous innovation, health-forward offerings and tech-led transformation. By nurturing India’s superfoods, investing in smart technologies and aligning with global consumption trends, the sector can emerge as a future-ready leader in sustainable and scalable food solutions, the report said.