With Ministry of Food Processing Industries (MoFPI) connecting processing and machinery sector with the agriculture and raw material industry, streamlining policies and linking it horizontally and vertically across the departments, has helped to tow growth. Positive growth is recorded in the food processing on schemes fed by MoFPI like lending loans (Mudra) and giving tax rebates (SPV) giving more state funded projects (state funded project 2000cr under NABARD) has facilitated India to harness the potential of processing & manufacturing, making a mark on the globe with exports. Rajesh Nath, MD, German Engineering Federation (VDMA) discusses development & growth in the industry and factors propelling the demand for food process equipment and machinery.

 

What is the current scenario of food process equipment and machinery in India?

The total market size of food processing equipment sector in India is estimated at USD 1571 million. The Indian food market is the sixth biggest market on the globe. Discussing the contribution inside the nation the food processing industry has an offer of 32 per cent in the countries all-out market. As far as a generation, utilisation and exports are concerned, it is the fifth biggest industry in India. The Indian food market is esteemed at USD 1.3 billion and is developing at CAGR of 20 per cent. 

 

The Gross Value Added (GVA) at basic current prices from the manufacturing sector in India grew at a CAGR of 4.34 per cent during FY12 and FY18 as per the second advance estimates of annual national income published by the Government of India. During April-September 2018, GVA from manufacturing at current prices grew 14.8 per cent year-on-year to Rs 138.99 trillion (US$ 198.05 billion). Under the Make in India initiative, the Government of India aims to increase the share of the manufacturing sector to the gross domestic product (GDP) to 25 per cent by 2022, from 16 per cent, and to create 100 million new jobs by 2022. Over 200 manufacturers are engaged in the production of process plant machinery. Nearly 65 per cent of the total manufacturers are small and medium enterprises. Production and exports stood at US$ 2.91 billion and US$ 1.38 billion in FY17, respectively.

 

Tell us about the import footprint of the Indian food process equipment and machinery industry?

In 2018, the total import of machinery from Germany reached a volume of Euro 3.40 billion. This was an increase by 9.3 per cent compared with the same period of time in the previous year. On the other hand, in 2017, India imported machinery of the value Euro18.37 bn globally. Germany is the 2nd most important supplier to India globally, with share of around 16.7 per cent.

 

Food processing and packaging machinery is one of the important sectors in terms of demand of German equipment in India and it is growing steadily. In 2017, India imported Euro 695 million of food processing and packaging machinery globally, out of which Euro 299 million was food processing machinery and Euro 396 million was packaging machinery. Germany was one of the most important suppliers to India, after Italy and China, with Euro 124 million of import. Filling and sealing machines, confectionery machines, machines for processing cereals and pulses, bakery machines and meat processing machines are a few of the most demanding machines in India in the food processing and packaging sector.

 

What does Indian industry stands among R&D initiatives and which government support initiatives are helping to create more research?

India’s Engineering R&D (ER&D) globalisation and services market reached US$ 22.3 billion in 2016 and is set to rise to US$ 38 billion by 2020. A few institutes in India, on a national and state level, offer courses that train individuals and companies in the procedures and aspects involved in food processing. For example–The National Mission on Food Processing under the MoFPI is meant to address the shortcomings of the food processing industry and to find sustainable solutions for the workforce involved. The NMFP scheme targets to create infrastructure facilities for degree/diploma courses in food processing sector, hosts entrepreneurship development program (EDP), food processing training centers (FPTC) and training at recognised institutions at state/national level.

 

What drives of food processing equipment and machinery in India? What future does it hold?

Rising competition is driving domestic players to focus on improving their capabilities and become more quality conscious and upgrade their technology base in line with global requirements. More than 2,500 firms in the engineering sector currently have ISO 9000 accreditation. Companies are increasingly focusing on R&D and product development.

 

The Government plans to set up 42 mega food parks across the country in coming years. In the Budget a corpus of Rs. 2,000 crore was created under National Bank for Agriculture and Rural Development (NABARD) to provide cheaper credit to food processing industry. Excise duty on plant and machinery for packaging and processing has been brought down to six per cent from 10 per cent. 

 

What would help industry to have more traction? 

Going forward, the adoption of food safety and quality assurance mechanisms (FSMS) such as Total Quality Management (TQM) including ISO 9000, ISO 22000, Hazard Analysis and Critical Control Points (HACCP), Good Manufacturing Practices (GMP) and Good Hygienic Practices (GHP) to manufacture process equipment and machinery for the food processing industry would enable adherence to stringent quality and hygiene norms. This will protect consumer health and prepare the industry to face global competition, enhance product acceptance by overseas buyers in turn will lead to market growth. It will keep the industry technologically abreast of international best practices.