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The Indian food market, according to the 'India Food Report 2008' is estimated at over US$ 182 billion, and accounts for about two thirds of the total Indian retail market. Further, the retail food sector in India is likely to grow from around US$ 70 billion in 2008 to US$ 150 billion by 2025, accounting for a large chunk of the world food industry, which would grow to US$ 400 billion from US$ 175 billion by 2025.

The growth of the food industry in India stems from the consistently increasing agricultural output. With the second largest arable area in the world, India is on f the key food producing countries in the world, second only to China.

The food processing industry in India is presently growing at 14 per cent against 6-7 per cent growth in 2003-04. Foreign direct investments (FDI) totalling US$ 143.80 million was put into the food processing industry in 2007-08 against US$ 5.70 million in the previous fiscal.

The food processing industry provides crucial connections between industry and agriculture. To aid the growth of the food processing industry, the government has implemented schemes including the setting up food parks, packaging centres, integrated cold chain facilities, value-added centres, and modern abattoirs.

Despite India having a huge agricultural production base, its share in exports of processed food in global trade is only 1.5 per cent; whereas the size of the global processed-food market is estimated at US$ 3.2 trillion and nearly 80 per cent of a ·cultural products in the developed countries get processed and packaged.

'Vision 2015' undertaken by the Ministry of Food Processing Industries entails:
• Three-fold growth in the size of the processed food sector.
• Increasing level of processing of perishables from 6 per cent to 20 per cent.
• Value addition to be raised from 20 per cent to 35 per cent.
• Share in global food trade to go up from 1.5 per cent to 3 per cent.

Policy Initiatives:
. The Indian government has abolished licensing for almost all food and agro-processing industries.
. Automatic investment approval (including foreign technology agreements within specified norms), up to 51 per cent foreign equity or 100 per cent for NRI and Overseas Corporate Bodies (OCBs) investment, is allowed for most of the food processing sector.
. Wide-ranging fiscal, policy changes have been introduced progressively. Excise and Import duty rates have been reduced substantially. Many processed food items are totally exempt from excise duty.