Food Processing gets over Rs 9,000cr FDI during April-Nov'09

The food processing sector attracted over Rs 9,000 crore Foreign Direct Investment (FDI) during the April-November period of the current fiscal, the highest ever so far.

"Earlier, we used to receive FDI in the range between Rs 2,000-4,000 crore a year. This has significantly gone up in the first eight months of the current fiscal to more than Rs 9,000 crore," Food Processing Industries Secretary Ashok Sinha told reporters here on the sidelines of a conference today.

Sinha said that the future also holds good for the sector as FDI is likely to go up "significantly" in the coming months on the back of numerous queries from international companies evincing interests to either put up their bases or enter into technological collaborations in India.

"Apart from Pepsico, investments have come from firms engaged in dairy and meat processing, confectioneries and a whole lot from other areas of the sector," he said, adding that the recent trip of the Minister Subodh Kant Sahai to France is expected to bring in a massive investment to the food processing industry.

The food processing industry is in its infancy in India now, but sensing the huge untapped potential, overseas firms are increasingly showing their interest to participate in this sunrise sector.

The domestic investment in the sector has so far been lukewarm, but Sinha said this is also on the rise as corporates have started realising the potential in the area.

According to industry estimates, India loses over Rs 55,000 crore worth of harvested produce, mostly vegetables and fruits, annually due to poor infrastructure, which includes cold chain, packaging materials and transport among others.

The country processes only two per cent of its total production, which is miles behind when compared with around 80 per cent in Malaysia and the Philippines.

Demand from India's growing middle class population, around 300 million now, is expected to give huge impetus to the sector's growth.