Leading FMCG companies have termed the PLI scheme approved by the government for the food processing sector as a game-changer which would help bring more investment, increase the income of farmers and boost agri exports.
Leading companies operating in the packaged food segment as HUL, ITC, Britannia, Parle and Nestle welcomed the production-linked incentive (PLI) scheme approved by the government on Wednesday.
The move would also help create more jobs in the sector, ensure the availability of a wider range of value-added products for consumers and the Indian companies to establish themselves in the foreign markets.
The government on Wednesday approved a production-linked incentive (PLI) scheme for the food processing sector, entailing an outlay of Rs 10,900 crore.
Commenting over the development, ITC Chairman and Managing Director Sanjiv Puri termed the scheme as a game-changer for the sector and complimented the government for spearheading this transformative step forward.
Food company Britannia Industries said the move provides a much-needed boost to the food processing sector and also promotes growth and investments.
While the initiative paves the way for many Indian brands to go global, it will also generate sizeable employment opportunities in the sector. Overall, a step forward in building an Atmanirbhar Bharat, said Britannia Industries Managing Director Varun Berry.
FMCG firm HUL, which owns brands such as Bru coffee, Brooke Bond, Kissan, Lipton and Knorr, said the food processing sector in India has tremendous growth potential and help generate employment in agriculture and boost exports.
Less than 10 per cent of food grown in India is processed compared to 40 per cent in South East Asia. We hope that the PLI dramatically increases value addition in the food sector, generates employment in agriculture, and boosts India's exports. HUL, as one of the largest food processing companies in India, is very thankful to the Govt. for making PLI a reality and will readily assist in making the scheme a success, said HUL ED Foods & Refreshment Sudhir Sitapati.
Another FMCG major Nestle India, which had last year announced to invest Rs 2,600 crore in the next 3-4 years, also welcomed the move.
Nestl India India welcomes the Cabinet Approval of the PLI Scheme for Food Processing sector. We will be studying the details of the scheme and accordingly decide on the next steps, said a Nestl India India Spokesperson.
Parle Products Senior Category Head Mayank Shah said this would motivate the players, to expand their capacities and sales.
It would go a long way in achieving a critical size in the global market to some of the Indian players. It would help some of the Indian players to achieve global size as well. They are expanding their capacity and looking big way into the processed food segment, he added.
According to Shah, innovative and organic products of the small-to-medium enterprise (SMEs), including eggs, poultry meat, egg products are also covered under the first component, which relates to incentivising manufacturing.
It has included marine products, cheese products, poultry segment, which is a welcome move, Shah added.
According to EY Consumer Products and Retail Sector Leader Pinakiranjan Mishra the PLI scheme introduced for the food processing industry would give it a major boost in terms of employment opportunities and in providing Indian brands with global recognition.
"Given India's competitive advantage in terms of resource endowment, domestic market size, and potential for promoting value-added goods, the PLI scheme could go a long way in achieving the sector's maximum potential while encouraging Indian brands to improve their role in the global value chain, he said.
The Indian packaged food market is estimated to be around USD 35 billion and is expected to be double in the next five years to USD 70 billion.
According to the data from the Ministry of Food Processing Industries, the gross value added in food processing increased from Rs 1.30 lakh crore to Rs 2.08 lakh crore in 5 years.
India's exports of Agri-food products were USD 32.7 billion in 2019-20 and the FDI inflows from April 2014 to September 2021 amounted to USD 4.41 billion.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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First Published: Thu, April 01 2021. 03:40 IST