Top sector for foreign direct investment in India

Also see:

Overview of India's food processing industry

India's seven export-worthy food sectors

Intermediate food products market in India

Sugar Market in India

See report on

Retailing in India

Food-processing industry and supermarkets

Points to be noted:

• Foreign direct investment of around US$1 billion has already been approved in India's food processing industry since 1991.

• Changing lifestyles, breakdown of the joint-family system, increasing number of working wives and Western influence (via TV channels) in the urban areas are fuelling a demand for packaged foods.

• India already has all the requirements for a head-start in the food-processing industry. Basic materials such as foodgrains, pulses, vegetables and meats (non-beef) can be sourced locally or easily imported if local availability is inadequate.

• Foreign investors can own 100 per cent equity in plants they set up. However, it is advisable to take a local partner.

• Many Indian firms are eagerly seeking foreign partners for joint-ventures to avail of their technological advantage.

• Supermarkets are just beginning to appear in India's big cities and this is the time for international chains to set a foothold. Competition will only increase with time.

• There has been some civilised resistance from ultra-nationalistic quarters of opinion to foreign food products. This resistance will be less if a local partner is involved.

• India's liberal intelligentsia is gradually building the opinion that foreign investments in the processed food sector will benefit rural agriculture, thus beating the nationalists with their own slogans. The liberal intelligentsia is gradually prevailing.

Overview of India's food processing industry
India's seven export-worthy food sectors
Intermediate food products market in India
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