Food processing could be India’s next big industrial bet
Meet some of these food companies at Ideas for India.
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India is the largest producer of milk, spices, and pulses globally. It is the second-largest producer of fruits & vegetables, food grains, tea, fish, eggs globally. It has a liberal FDI policy allowing 100% of foreign investment, low GST and great export potential. India’s export of agricultural and processed food products in 2024-25 were $49.4bn, with processed food accounting for $10.09 billion. This week’s Policy Watch looks at why food processing in India is a winner, by Raya Mahmood. Scroll down for more.
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Food processing could be India’s next big industrial bet
At Ideas for India in a few days, nearly 20 mid-sized export-orientated companies selling anything from pulses to fresh fruits to ethnic snacks is coming from India, supported by the Ministry of Commerce.
A few weeks ago, at the International Food Expo at Excel in London, it felt a full desi show to the over 100,000 attendees. Market leaders like Taj Foods, Haldirams, Suhana and others took over like never before.
That’s no fluke.
India’s food processing industry is quietly becoming one of the country’s most important industrial policy experiments. Once viewed primarily as an agricultural extension sector, food processing is now being repositioned as a manufacturing, export, and supply-chain strategy capable of linking rural production with global markets.
The numbers are beginning to reflect that shift. India’s processed food exports reached nearly $7.9 billion in FY2024-25, while the sector now accounts for roughly 32% of the country’s total food market. Under the government’s Production Linked Incentive Scheme for Food Processing (PLISFPI), more than 128 companies across 274 units have been approved nationwide, generating investments of over ₹9,200 crore (£730m) and creating an estimated 329,000 jobs.
At the centre of this transformation is value addition.
For decades, India exported raw agricultural products while branding and packaging occurred elsewhere. Policymakers are now attempting to reverse that equation by scaling processed foods, ready-to-eat products, marine exports, dairy processing, and millet-based goods. The logic is simple: processed products generate higher margins, stronger export resilience, and more stable rural employment than commodity agriculture alone.
The PLI scheme has become the key policy instrument driving this shift. Launched with an outlay of ₹10,900 crore (£865m), the programme ties government incentives to incremental sales and production growth. It also reflects a broader evolution in India’s industrial policymaking: moving away from protectionism alone and toward targeted production ecosystems.
The sector is already showing measurable momentum. Government data indicates that sales of PLI-supported food products have risen by over 10%, while exports under the scheme have grown by more than 7%. Processing capacity has expanded by roughly 3.4 million metric tonnes annually.
Yet the larger story is geopolitical as much as economic. Global food supply chains are becoming more fragmented due to climate shocks, trade disruptions, and changing consumption patterns. India is increasingly positioning itself not only as a large agricultural producer, but as a long-term processing and export hub capable of serving markets across the Gulf, Southeast Asia, and Europe. Recent export growth in sectors like dairy and processed staples illustrates how Indian firms such as Amul are beginning to occupy these regional supply gaps.
The broader implication is that food processing is no longer just an agricultural policy issue. It is becoming part of India’s wider attempt to build export-oriented manufacturing capacity and integrate more strategically into global value chains. If electronics manufacturing represented India’s first major PLI success story, food processing may become its next large-scale industrial transition.
Raya Mahmood is a graduate of UCL and Cornell. She is an emerging policy analyst, with an interest in climate governance and global development.
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