As the food processing industry allows 100% FDI through the direct route, the Secretary, speaking at FICCI’s 98th Annual General Meeting and Annual Convention on Friday, November 28, said that many Foreign Direct Investors (FDI) are looking and “willing to” invest in the food processing sector in India.
Das was part of a panel discussion on Economy with Secretaries to the Government of India, and Secretaries of the Ministries of Defence, Agriculture & Farmers Welfare and Commerce and Industry.
He said that the increased interest from FDIs is fuelled by the “changed environment in the food processing sector,” but more due to the “labour cost differential,” which is the “biggest advantage” that India has.
In the last 10 years, the food processing industry was contributing about 10% of the total agriculture exports, which has now increased to almost 22% and “in next four years, we are very sure that we will cross the 30% cap for processed food in the total agri basket,” he said.
The Food Processing Secretary also said that the sector has done “fairly well” in the production linked incentive (PLI) scheme. It has excelled in all aspects, including investment, growth, export and employment.
There is demand for a second PLI scheme as the first round could not cover a few sectors and verticals and Joshi has assured to articulate the same and “put it across.”
This year, the Food Processing ministry has spent “close to 90-95%” of the allocated budget, which is also the highest-ever expenditure by the ministry, Joshi shared.
While the 15th Finance Commission cycle is coming to an end, the ministry is expected to continue its “umbrella scheme,” Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), he said.
As food processing is a labour-intensive sector that also helps cut farm losses and boost exports, Joshi said it may receive additional support from the Finance Minister.
He added that India’s processing levels, currently at 11-12%, will “definitely rise” with better support and infrastructure, with the ministry targeting an increase to about 20-22% over the next 7-8 years.
