India's food processing sector is expected to grow by 25 per cent to nearly $600 billion by 2030, led by productivity gains from artificial intelligence (AI) as well as increased product discovery and premiumisation on quick commerce (qcom) platforms, especially in urban areas, according to a report released by Deloitte in partnership with the Federation of Indian Chambers of Commerce and Industry (Ficci).
“There are three inputs to the growth conversation for the food processing industry. For the industry to get to about $600 billion, or 9 per cent growth, by 2030, food processing levels need to increase to about 25 per cent from 12 per cent at present. Then there's the export opportunity, with processed food accounting for only 20 per cent of overall exports,” Avinash Chandani, partner, Deloitte India, told Business Standard.
Consumer behaviour has changed on qcom platforms, with demand being split between value purchases and premium products that are also defined by clear labelling and health benefits, according to the report titled STEP UP: Scalable Transformation for Efficiency and Profitability to Unleash Progress.
“With consumer behaviour evolving at a very fast pace, a 3-5 year horizon for this growth path is apt,” Chandani said.
With up to 70 per cent of new food product launches now being digital-first, 57 per cent of consumers relying on qcom for the fulfilment of urgent needs, and one in 10 consumers buying planned items on qcom platforms due to the ease of buying from home, the trend is here to stay, according to the report.
Qcom is also driving 75 per cent of FMCG sales via e-commerce.
Strong skew towards digital discovery Source: Deloitte Consumer Survey 2026
Digital platforms also offer an opportunity for premiumisation through personalisation, with nutrition and functional food categories growing twice as fast (15-20 per cent) as the broader food market (10 per cent).
This opportunity presents itself even as packaged food retail is expected to account for 30-35 per cent by 2030, compared with 5-6 per cent in 2025.
To add context, processed food contributes only 20 per cent to India's overall food exports of $50 billion. In April-June 2025-26 (Q1FY26), processed food exports rose to $4.56 billion from $4.16 billion in the year-ago period.
To be sure, traditional trade channels are expected to retain their importance, especially in semi-urban and rural areas, with modern trade being the experience zone for products discovered via qcom and e-commerce. “Traditional channels are here to stay for tier-II and tier-III cities, especially since there is a fixed monthly budget at times and there are also opportunities to purchase food on credit, which other channels do not offer,” said Chandani.
How channel split is changing Against this backdrop, food companies are also eyeing AI-led transformation of their processes, from the factory floor to the consumer's table.
Not only does AI enable companies to analyse consumer behaviour, purchase history and preferences, it also drives demand at the consumer end, with 74 per cent of regular AI assistant users seeking AI-driven product recommendations, according to the STEP UP report. This, again, feeds into personalisation, with a 4-6 per cent increase in company revenues from personalised campaigns.
At the back end, 43 per cent of Indian fast-moving consumer goods (FMCG) companies have already adopted AI, with 84 per cent of Indian chief executive officers (CEOs) raising new capital or reallocating budgets to invest in AI, compared with a global average of 70 per cent, the report states.
According to Chandani, from an investment standpoint, leaders are saying that they are putting more investments into AI since there is also a challenge to how much data the human mind can process. “Most use cases for AI are from the front-end perspective, whether it comes to understanding your consumer or equipping your salespeople based on order history or assessing how the competition is performing,” he added.
Companies are using AI to forecast demand, assess quality, automate warehouses and monitor production.
AI is expected to cut the time spent in the product development cycle by 50-60 per cent and bring down research and development (R&D) costs by 30-60 per cent, according to the report. “AI can also provide incremental benefits of 30-35 per cent to company bottom lines, with one-third coming from revenue-led initiatives and two-thirds from the cost side,” Chandani said, citing a Deloitte survey conducted in partnership with Google.
Apart from the domestic market, India also has an opportunity in value-added exports, which constitute just 15 per cent of the country's food export basket. In comparison, the share in peer countries' food export baskets is 40-50 per cent, the report stated.
When asked about the AI bubble driving FMCG companies to invest in artificial intelligence capabilities, Chandani said the trend is real and here to stay. However, companies need to get the foundation right. “It is about how effectively you are able to build the data foundation and master data governance practices,” Chandani said.
During a panel discussion titled ‘Marketing in the Era of Algorithms: From Reach to Precision’ at the Ficci Foodworld India 2026 event in New Delhi on Thursday, Mars Snacking General Manager Prashant Peres said the biggest challenge is integrating AI into platforms and data sources, as well as creating a digital spine for sales systems.
Shrikant Kanhere, MD and CEO, AWL Agri Business Ltd, said AI does not alter product distribution, but it adds depth by opening up multiple channels for sale. The company is investing in AI for sales automation, he added.
Shashi Ranjan, MD, Danone India, said AI investments should be aimed at enhancing people's capability to work with new systems and promoting responsible artificial intelligence.
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