Growth of Food Industry in India


The Indian food industry is known for its huge growth by increasing its contribution for the world food trade every year. The Indian food sector has emerged as a fast growing and profitable sector because of its immense potential for value addition. The Central Government of India, through the Ministry of Food Processing Industries (MoFPI) is making all efforts to encourage investments in the business. It has approved proposals for Joint Ventures (JV), Foreign collaborations, industrial licenses, and also 100% export-oriented units. As an effect of Urbanization, the acceptance of packaged and ready-to-eat food products is increasing also demand for processed or packaged and ready to serve/ready to cook food items has also increased. As a major producer of spices, essential oils, condiments, and fruit pulps, India stands as the world’s second largest food producer. With diverse agro-climatic conditions, India has a production advantage in many agricultural goods, with the potential for their cultivation.

Indian Food Industry before Covid-19

India has the world’s sixth largest food and grocery market with 70% contribution for the retail sales. The Indian gourmet food market is currently valued at US$ 1.3 billion and is growing at a Compound Annual Growth Rate (CAGR) of 20%. The use of ultimate technology has been a boon in witnessing exponential growth. With online food delivery platforms like Food Panda, Zomato, and Swiggy, the earning per capita has also increased in the country. The online food delivery industry grew at 150% year-on-year. As per Department of Industrial Policies and Promotion (DIPP), the Indian Food Processing Sector has received around US$ 7.54 billion worth of Foreign Direct Investment (FDI) during the period April 2000-March 2017.

Some of the major investments in this sector in the recent past are:

• As per Ministry of Food Processing Industries, Amazon is planning to enter the Indian food retailing sector by investing US$ 515 million in the next five years

• Parle Agro Pvt Ltd is launching Frooti Fizz, a succession of the original Mango Frooti, which will be retailed across 1.2 million outlets in the country as it targets increasing its annual revenue.

• US-based food company Cargill Inc, aims to double its branded consumer business in India by 2020, by doubling its retail reach to about 800,000 outlets and increase market share to become national leader in the sunflower oil category

• Mad Over Donuts (MoD), outlined plans of expanding its operations in India by opening nine new MOD stores by March 2017.

• Uber Technologies Inc planned to launch UberEATS, its food delivery service to India, with investments made across multiple cities and regions.

Indian Food Industry After Covid-19

The food industry is accountable for 3% of India’s GDP and is also the largest employer, with more than 7.3 million workforces. The nationwide lockdown set this industry on losses. In-order to tackle these challenges and regain profitability, the industry has been adapting various techniques since the lockdown was lifted. COVID hygiene protocols are emerging in the sector to gain customer confidence and regain regular revenues.

Hygiene Standards

As the restaurants slowly started opening their doors for business, the question of safety was a major problem for the consumers. To tackle this, all major food delivery apps started mentioning the hygiene standards of restaurants on their platforms. Temperature control, frequent sanitization, mandatory use of masks and safe packing mechanisms are the new norms in the food industry. Food Safety and Standards Authority of India (FSSAI) has launched a 48-point checklist on hygiene ratings for restaurants which must be followed.

Contactless Solutions

The industry learned to invest in technologies that are customer-centric to regain its business. Contactless guest engagement has become a priority for the industry and digital payment options are likely to be the new normal for the hospitality sector.

Gourmet Street Food Brands

Indians are known for their love of street food - with cleanliness being the primary concern street food has quickly declined. This trend is likely to impact the industry for months post pandemic. Many fine dining restaurants have shifted from in-dining to delivery services.

Cloud Kitchens

Many businesses have started to transform into a cloud kitchen model, which provides significant savings in infrastructure costs and Tie-ups with food aggregators offering online ordering and delivery options for customer convenience.


The Indian food industry is heading towards change along with digitalization to its core. Creative service offerings will be launched, health and safety will be standardized and operations will become less labor intensive. All these changes will elevate customer experience and set new standards for the industry in the Post-Covid era.