1-4 September, 2006 Pragati Maidan, New Delhi, India
    Food And Beverages Industry To Have Its Fill
Changing lifestyles welcome more growth prospects


The rupees 3350 billion Indian food and beverages industry will witness 10% growth by December this year, says the Federation of Indian Chambers of Commerce and Industry (FICCI). The survey conducted by FICCI confirms growth in this sector on the back of emerging opportunities and strong fundamentals developing in the economy.

With growing awareness about health products, increasing urbanization, rising standards of living and popularity for convenient foods, the industry is expected to witness further growth. Buoyancy in the processing industry has come about due to policy initiatives, liberal reform measures and various tax benefits given by the government. Tax exemption on agro- processing units and full exemption of excise duties on dairy machines was an initiative announced in the Union Budget 2004- 05.

Moreover, de- licensing of the entire sector, automatic approval of foreign investment up to 100% export – oriented units are some of the other measures taken. Development of rural infrastructure, extension services, agro- based and food processing industries have been given priority in the budget for generating employment, reducing poverty and raising the income level of farmers.

Some insights into the market dynamics of the food and beverages industry reveal that with changing lifestyle of consumers and rising disposable income of the growing middle class – branded food, health food and convenient food are rapidly growing segments of this industry. Indian food and beverages companies are making a beeline for regional overseas markets including Bangladesh, Nepal, Pakistan, West Asia and CIS countries due to similar lifestyle and consumption habits.

Overall, the industry has achieved 8.7% growth in value terms and 10% in volume terms. The growth is more pronounced in volume terms than in terms of value in most items except milk and milk products where value addition has brought about higher realization.

The unorganized sector and small players account for more than 70% of the industry volumes and 50% in value terms.

Date: 26-Oct-2004

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