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Investments, the need of the hour for Food Industry

India: The food processing and service industry are constantly encountering a lot of roadblocks. The laws and the current volatile scenario of the industry has not attracted a lot of investment opportunities. To address this situation, the food processing minister has been on the move constantly to address this situation.

The current ambition of the ministry is to promote FDI and Make in India programme. The food processing minister will travel to France in the coming week to visit the global food festival, where the food and agricultural minister of France, Stephane Le Foll along with other heads of retail and food processing companies will meet to discuss the aspects of foreign investments and collaborations. The ministry is also discussing about the current tax issue and the introduction of GST and how it should be imposed so that it does not alter the current scenario of the market. A lot of other issues like labelling to weight measurement and standards are also being considered. The government is aiming to take ample preventive measures before the World Food 2017 event, which is scheduled in March.

According to TechSci Research, the attempts made by the government to help the food processing and services industry will also create opportunities for many other sectors like retail, logistics, E-commerce etc. The Government of India (GoI) has allowed 100 per cent FDI in retail and E-commerce segment to lure in foreign companies, which so far have shown little interest in setting up shop in the country. These attempts will surely help the government to garner attractive investments and collaboration opportunities in the near future as the food industry is expected to grow in the coming years.

According to a recent report published by TechSci Research, “India Food Services Market Forecast & Opportunities, 2020”, the market for food services in India is expected to grow at a CAGR of over 12% through 2020. Growth in the market is anticipated primarily because higher disposable income, improved standard of living and changing preferences of consumers. In addition, expansion of brands into tier II and tier III cities, is also a major factor which is expected to drive growth in food services market of the country over the next five years. In 2013, the market was dominated by unorganized and non-branded players, however, with growth of various foreign and domestic brands, these players are expected to lose their market to organized branded players. Segment-wise, dining food services segment was the largest contributor in India food services market in 2014, on account of the large number of dining restaurants in the country.    

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