Sector Profile

Agro & Food Processing

Agriculture and Allied Sectors’ Snapshot

• With 20 agri-climatic regions, all 15 major climates in the worldexist in India. The country also possesses 46 of the 60 soil types inthe world.

• India is the largest producer of spices, pulses, milk, tea, cashewand jute

• The second largest producer of wheat, rice, fruits and vegetables,sugarcane, cotton and oilseeds.

• Horticulture crops registered production of 313.9 million metrictonnes (MMT) in 2018-19, with a CAGR of 5.5% over the last tenyears;

• India is the largest producer of mango and banana.

• It is 2nd largest producer of vegetables

• India is also the largest producer, consumer and exporter of spicesand spice products.

India Scenario

13%Share in India’s

exports

15.2%Share in India's

GDP

283.37 mill. tonnes foodgrain

production

2nd rank in fruit production in

the world

Source: Economic Survey 2019-20; IBEF; National Fisheries Development Board; National Dairy Development Board

Quick Facts

20%Share in total milk production in the

world

1st rank in livestock population

12.59 MMTof fish

production

2nd Rank In fish production in

the world

Export of Agriculture Products

Source: IBEF

4.8

2.52.3

2.5

1.30.2

0.61

Key Agricultural and Allied Sector Exports from India in FY20* (USD billion)

Marine Products

Basmati Rice

Buffalo Meat

Spices

Non-Basmati Rice

Cotton

Oil Meals

Sugar

• Total agricultural exports from India grew at a CAGR of 16.45 per cent over FY10-18 to reach USD 38.21 billion in FY18.

• In FY19, agriculture exports were USD 38.54 billion.

38.21 38.54

22.69

05

1015202530354045

FY18 FY19 FY20 (Till November2019)

AGRICULTURAL EXPORTS FROM INDIA (USD BILLION)

Agricultural Exports from India (USD billion)

Food Processing

Source: Minister of Food Processing Industries (MOFPI), FICCI Technopak, IBEF; Agricultural & Processed Food Products Export Development Authority, GoI

• The Indian food and grocery market are the world’s sixth largest, with retail contributing 70 per cent of the sales.

• The Indian food processing industry accounts for 32 per cent of the country’s total food market and is ranked fifth in terms of production, consumption, export and expected growth.

• It contributes around 8.80% and 8.39% of Gross Value Added (GVA) in Manufacturing and Agriculture respectively, 13% of India’s exports and 6% of total industrial investment.

93.97

354.75

205.84

402.52

242.66

473.81

230.14193.26

553.17

301.71

583.33

151.85

Share of Products in Exports of Processed Food in USD millions

Mango Pulp

Processed Vegetables

Cucumber & Gherkins

Processed Fruits, Juices &NutsPulses

Groundnuts

Jaggery & Confectionary

Cocoa Products

Cereal Preparations

Alcoholic Beverages

• India's exports of Processed Food was USD 4.45 billion in 2018-19. Exports of ready to eat items from India reached USD 681.95 million in FY19 from USD 689.80 million in FY18.

Incentives under Food Processing

Source: Minister of Food Processing Industries (MOFPI), Technopak

• 100% FDI under the automatic route in food processing industries. Soft loan is extended of up to 95% of project cost

• 100% FDI is allowed through approval route for trading, including through e-commerce in respect of food products manufactured and/or produced in India

• 100 % Tax Exemption for first 5 Years of Operation for New units in the business of processing, preservation and packaging of fruits and vegetables

• Exemption of service tax for storage, handling and transportation of processed food

• Benefits to projects of cold storage and handling system for processed food

Government of India – Initiatives under SAMPADA Scheme

Source: Ministry of Food Processing Industries (MOFPI), Schemes/pradhan-mantri-kisan-sampada-yojana

Integrated Cold Chain and Value

Addition Infrastructure

Creation of Backward and

Forward Linkages

Creation/Expansion of Food Processing

& Preservation Capacities

Mega Food Parks & Human Resources

and Institutions

Food Safety and Quality Assurance

Infrastructure

Infrastructure for Agro-processing

clusters

• Pradhan Mantri Kisan SAMPADA Yojana (Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters) with an allocation of US $ 882 million for a period 2016-20

• Implementation of Scheme by Ministry of Food Processing Industries (MoFPI)

• The scheme is expected to influence investment of USD 4.618 billion for handling of 334 lakh MT agro-produce valued at USD 15.31 billion crore, benefiting 20 lakh farmers and generating 5,30,500 direct/indirect employment in the country by the year 2019-20

Other Initiatives by Government of India

Source: IBEF

1NABARD announced an investment of USD 100

million venture capital fund for equity investments

in agriculture and rural-focused startups

Transport and Marketing Assistance (TMA) scheme to

provide financial assistance for transport and

marketing of agriculture products in order to boost

agriculture exports2

The Agriculture Export Policy, 2018 aims to increase

India’s agricultural exports to USD 60 billion by 2022

and USD 100 billion in the next few years with a

stable trade policy regime.3

4USD 306.29 million for computerisation of Primary

Agricultural Credit Society (PACS) to ensure

cooperatives are benefitted through digital technology

New AGRI-UDAAN programme to mentor start-ups

and to enable them to connect with potential investors

to boost innovation and entrepreneurship in

agriculture5

Pradhan Mantri Krishi Sinchai Yojana (PMKSY) with

an investment of USD 7.7 billion aimed at

development of irrigation sources for providing a

permanent solution from drought6

Agriculture and Allied Sectors’ Snapshot

•>50% land under net cultivable area

•Major agricultural produce of Gujarat includes cotton, groundnut(peanuts), dates, and sugar cane, milk and milk products.Leading producer of cotton, tobacco and groundnuts in India

•Milk constitutes 22% of the Agricultural GDP of Gujarat

•State constitutes 7.75% share of total milk production in Indiawith 17 Cooperative dairy milk unions & 25 private dairy plants

•Amul dairy in Gujarat is Asia’s biggest dairy

•As a part of ‘National Horticulture Mission’, the State aims todouble the horticulture production and income by thedevelopment of infrastructure and market facilities

•Gujarat State Horticulture Mission (GSHM), is implementing“National Horticultural Mission (NHM)” in the in 21 potentialdistricts of state and covers important crops infrastructure andmarketing facilities

Gujarat Scenario

Source Socio-Economic Review of Gujarat 2019-20

Quick Facts

42.55%Share in India’s

groundnut production

31.05%Share in India’s

cotton production

1st rank in

India’s castor production

90%Share in India’s

Fennel production

3rd Rank In milk production

1st rank in

India’s cumin production

20% Share in

India’s marine fish production

12.4%Share of animal

husbandry in GSDP

Gujarat : Food Processing Clusters

Source: Gujarat Agro Industries Corporation, GoG

The major production clusters of Gujarat

Home to more than 30,000 Companies in the Food Processing

Sector

Infrastructure availability in the State

Existing Infrastructure

Industrial Areas

119 Industrial Areas

Inland container depots (ICDs)

• Nine ICDs

Three government ICDs -Vadodara, Ankleshwar, Gandhinagar

Six private ICDs – Kandla (1), Ahmedabad (2), Vadodra (1), Surat(1) and Valsad (1)

Storage and Fish Units

710 Storage and Fish Units

Mega Food Parks

Two Mega food Parks

Gujarat’s export in Food Processing

Source: Agricultural and Processed Food Products Export Development Authority (APEDA); KPMG Analysis

64.2

14.1

6.8

5.8

3.01.7

1.51%

1%1%

0.4

Share of Value of Major Exported processed food products from Gujarat (2018-19)

Basmati Rice

Non Basmati Rice

Guargum

Groundnuts

Processed Vegetables

Cereal Preparations

Miscellaneous Preparations

Processed Fruits, Juices & Nuts

Jaggery & Confectionary

Milled Products

Other Cereals

• Over USD 5.14 billion worth of processed food was exported from Gujarat in 2018-19

• The exports from Gujarat increased by 15.2% from USD 4.46 billion in 2017-18 to USD 5.14 billion in 2018-19

• Gujarat’s share in the total processed foods & dairy products exported from India increased from 22% in 2012-13 to 28.62% in 2018-19

Gujarat’s share in India’s exports of Food Processing

• Gujarat host more than 30,000 companies in the food processing sector

• Gujarat has the highest share of exports of processed food in value and volume in India. The volume and value of exports of processed food has consistently risen over the years.

37% 40%41% 40%

46%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

0

2

4

6

8

10

12

14

2014-15 2015-16 2016-17 2017-18 2018-19

Share in Value (USD Billion)

Value of India's exports Value of Gujarat's exports

% share of Gujarat

31% 37% 37% 34%38%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2014-15 2015-16 2016-17 2017-18 2018-19

Share in Volume (MMT)

Volume of India's exports Volume of Gujarat's exports

% share of Gujarat

Source: Agricultural and Processed Food Products Export Development Authority (APEDA)

Industrial Policy 2020 – Propelling Gujarat’s Industries

Source: Industries & Mines Department, Government of Gujarat

15 Thrust Sectors have been identified which will be given incremental incentives as a part of policy

Auto & Auto Components

Industrial Machinery & Equipment

Agro & Food Processing

Ceramics

Pharmaceutical & Medical Devices

Technical Textiles

Gems & Jewelry

Electrical Machinery & Equipment

Chemicals (in designated areas)

Industry 4.0 manufacturing

Electric Vehicles & Components

Waste Management Projects

Green Energy (Solar & Wind

Equipment)

Eco-friendly compostable

material

100% Export Oriented Units

Capital Subsidy for Large Industries – incentive up to 12% of FCI for thrust sectors and up to 10% for general sectorswith no upper ceiling. Exemption of electricity duty for 5 years

Source: Industries & Mines Department, Government of Gujarat

Industrial Policy 2020 – Incentives to Industries

Incentives to MSMEs

• Capital Subsidy for manufacturing sector –Assistance up to 25% of of eligible loan amount up toINR 35 Lakhs

• Interest Subsidy for manufacturing & service sector– Assistance up to 7% of interest levied on term loanup to INR 35 lakhs per annum

• Acquiring Foreign Patented Technologies –Assistance up to 65% of the cost of acquiring foreignpatented technologies with a ceiling of INR 50 Lakhs.Processed patents will also be included.

• Market Development Assistance - @75% of stallrent up to INR 2 Lakhs in India and @60% of stall rentup to INR 5 Lakhs outside India

• Rent Assistance - 65% of rent up to INR 1 lakh perannum for 3 years

Research & Innovation

• Financial Assistance up to INR 5 crore for setting upR&D & product development centers by privatecompanies

Relocation Incentives

• Provision of Re-location subsidy on case to case basise.g. units willing to relocate from other countries and /or diversifying their supply chain through investmentin Gujarat

Government Land for Long Term Lease

• Facilitation to industries in getting “GovernmentLand” on long term lease up to 50 years to industrialenterprises @6% of the market rate

Industries Commissionerate - https://ic.gujarat.gov.in/

Development of Common Industrial Infrastructure

Common Environment Infrastructure

Source: Industries & Mines Department, Government of Gujarat

Industrial Policy 2020 – Key Incentives for Industrial Infrastructure

Development of Industrial ParksAssistance for Sustainable Manufacturing

• 50% of capital subsidy up to INR75 Lakhs to industries practicingat least 50% waste recoverythrough Zero Liquid Dischargeas certified by GPCB

• Incentive to MSMEs @ 35% of costof P&M and to large industries @10% of cost of P&M maximum upto INR 35 lakhs for implementingcleaner production measures

• Industrial Parks - Assistance upto 25%of eligible fixed capital investment (50%in case of Vanbandhu Talukas) inbuilding and infrastructure upto INR 30Crore. Stamp Duty reimbursements willbe given to developers (100% of StampDuty) and individual units (50% ofstamp duty)

• Common Hostels / Dormitories –Assistance of 50% upto INR 20 Crore.

• Assistance upto 40% of eligible fixedcapital investment in the project forCommon Effluent Treatment Plant,Waste Management System,upgradation of existing CETPs,common spray dryer, commonmultiple effect evaporator etc. uptoINR 50 Crore

• Assistance upto 25% of project cost forset up/ relocation / retrofitting ofexisting polluting industrial units intoGreen Industrial Estates upto INR 25crore

• Assistance upto 50% of fixedinstallation cost to Common BoilerProject by SPV constituted byminimum 10 MSME upto INR 2 crore

Skill and Training Support

• Fiscal incentive for skillenhancement up to INR 15,000/-per person per training toinstitutes

• Assistance upto 80% of project cost forset up of Industrial Infrastructure suchas construction and up gradation ofroads, warehousing facilities, firestations, underground utilities , etc.upto INR 25 crore

Source: Gujarat Agro Business Policy 2016-2021

25% of project cost subsidy

• For New/ expansion of Agro and Food Processing Units

• For Cold Chain, Food Irradiation Processing Plants & Pack Houses

• For Creating Primary Processing Centers/ Collection centers in Rural Areas

Available for MSME Units

• Air freight Subsidy 25% to 40%• Sea-Freight Subsidy 25% to 40%

7.5% interest assistance

• For Agro and Food Processing Units• For Agro and Food Processing

Infrastructural Projects - CA Cold Storages, Food Irradiation Processing Plants, Silos, Pack houses, Food Parks, etc.

1% additional interest subsidy

• For SC/ST, physically challenged orwomen entrepreneurs,

• For Entrepreneurs below 35 age

Capital Investment

Assistance

Assistance for

Freight SubsidyAdditional Back

Ended Interest

Assistance of Back Ended

Interest

Incentives offered under Agro Business Policy 2016-2021

Specialized Agricultural Universities

Junagadh Agricultural University

Navsari Agricultural University

Anand Agricultural University

Sardarkrushinagar Dantiwada Agricultural University

Kamdhenu Veterinary University

• Set up in 2009-10 for the development of research, education, and extension in the field of Animal Husbandry, Dairy Development and Fisheries

• Specific research opportunities offered at College of Dairy Science, Amreli and Polytechnic in Animal Husbandry, Himmatnagar

• Offers courses in agriculture, horticulture, veterinary science and animal husbandry, home science and nutrition, diary science and food technology

• Offers a course in Agri Business Management

• Has 28 research centers in agriculture and allied sciences

• Offers courses in agriculture engineering, horticulture, dairy science, veterinary science, animal husbandry, agribusiness management

• 7colleges, 17 research centers, 6 extension education institute in 9 districts

• Has faculties of agriculture, horticulture, veterinary science, fisheries, and forestry

• Has 29 research centers offering opportunities across sector including soil science, agriculture research, water management research

• Offers courses in agriculture, agricultural engineering and technology and fisheries, veterinary science & animal husbandry, fisheries

• Offers MBA in Agri Business Management.

• PhD in Agriculture Economics

Gujarat has the following marketing facilities for the Agricultural Value Chain

Source: Ministry of Food Processing Industries, Government of India; Agricultural; Processed Food Products Export Development Authority; ASSOCHAM

Agriculture Produce Market

Committee (APMC)

Food Processing Units

Export Zones

Cold Storages

Warehouses

Cargo Complex

224 Agriculture Produce Market Committee (APMC)

market yards and sub-market yards

More than 30,000 food processing units employing over 1

Million people

20 Agro-export zones with focus on Mango, Vegetables and sesame seeds

710 cold storage and fish processing units with capacity of 2.03 Million Metric Tonne

One Air cargo complex for food

exports

207 warehouses across 45 centers

and four irradiation plants in the state

Investment Opportunities in Food Processing: Gujarat

Tomato, Potato Flakes & Powder, Specialty grades- Guar Gum powder, Refined Sugar, Egg Powder, Baker’s Yeast, Fish oil extraction

Value added Processing based on local resources

Spices Cryo grinding, Freeze Dried Fruit processing Unit, Instant Vegetables in Retort Pouches, Potato Fabricated Chips

Newer Technology Base Projects / Opportunities

Onion Cold Storage, Fresh Fruits-Pack house, Vegetables-Pack house, Mechanized Grain handling and storage at port, Food Parks, Terminal Markets, Spices and Isabgul Irradiation center

Agricultural/Horticultural Infrastructure Projects

Peanut Butter, De-hulled Sesame seed & Roasted Sesame oil, Roasted, salted & coated nuts, Integrated Shrimp farming & processing, Castor, Cotton.

Export Oriented Processing

Organic Milk & Milk Products, Ice Cream Balls, Castor Derivatives base Perfumery raw materials, Banana Fiber extraction and Textiles production

Innovative Opportunities

Natural food colors, Medicinal Herbs extraction, Neem / Tobacco Oil base Bio Pesticides, Food Processing Enzymes, and Fish meal base bio-fertilizer

Natural Resources Based Opportunities

Presence of National & International Players

Source:

Details of Nodal Department / Agencies

Sr. No. Nodal Departments/ Agencies

1 Agriculture and Co-operation Department

2 Department of Fisheries and Animal

Husbandry

3 Director of Agriculture

4 Director of Horticulture

5 Director of Animal Husbandry

6 Commissioner of Fisheries

7 Registrar of Co-operative Societies

8 Director of Sugar

9 Gujarat State Seed Corporation Limited

10 Gujarat State Seeds Certification Agency

Sr. No Nodal Departments/ Agencies

11 Gujarat State Land Development Corporation

Limited

12 Gujarat Agro Industries Corporation Limited

13 Gujarat State Warehousing Corporation

14 Gujarat State Sheep & Wool Development

Corporation Limited

15 Gujarat Fisheries Central Cooperative

Association Limited

16 Gauseva & Gaucher Vikas Board

17 Gujarat State Agriculture Marketing Board

18 Gujarat livestock development board

Success stories

LijjatA food industry started by seven Gujarati women as a venture to create a sustainable livelihood. Several trade fairs and exhibitions organized in the state helped the organization in increasing its membership and registering itself as society under the Societies Registration Act 1860. The growth of the Lijjat is often seen in the larger canvas of women and their empowerment

AmulAmul is an Indian dairy cooperative society based at Anand in Gujarat started it journey as “Kaira District Milk Union Limited”. With advent of white revolution in 1970, the technological developments at Amul spread to other parts of India. It is the first modern dairy of India and is the biggest dairy in Asia

DhanvantriDhanvantari unit is involved in collecting, processing and marketing of Minor Forest products among its various activities thereby using forest minor resources and tribal employment generation.

McCain IndiaMcCain not only process the potatoes for the domestic demand but also exports potatoes from Gujarat thereby enhancing the economic condition of poor farmers. Support of government through its globalization and business friendly mandates played a major role in success of McCain and upliftment of poor people.

Industries Commissionerate

Block No. 1, 2nd Floor, Udyog Bhavan, Gandhinagar, Gujarat, India - 382 010http://ic.gujarat.gov.in/ Phone: 079-23252683E-mail: comind@gujarat.gov.in

Industrial Extension Bureau (iNDEXTb)

Block No. 18, 2nd floor, Udyog Bhavan, Gandhinagar, Gujarat, India – 382 010www.indextb.com Phone: 079-2325 6009E-mail: md.indextb@gmail.com

Connect for more Information