India has been bestowed with wide range of climate and physio-geographical conditions which ensures availability of most kind of fruits and vegetables. The country is the second largest producer of the Fruits (81.285 Million tonnes) and vegetables (162.19 Million tonnes) in the world, contributing 12.6% and 14.0% of the total world production of fruits and vegetables respectively. (Source: Source FAO Website- February 2014 and Indian Horticulture Database 2013)
Banana, mango, citrus, papaya, guava and grape account for major share in total fruit production across India. The major fruit producing states are Andhra Pradesh, Maharashtra, Karnataka, Bihar, Uttar Pradesh, Tamil Nadu, Kerala and Gujarat. These eight states account for 70 per cent of the area under fruit cultivation. Potato, tomato, onion, brinjal, cabbage, cauliflower and tapioca account for maximum share in vegetable production in the country. India is a front runner in many fruits and vegetables with share in world production (Indian Horticulture Database 2013)as follows:
- 44.1% of mango
- 42.6% Papaya
- 25.6% of banana
- 20.2% of onion
- 35.6% of cauliflower
- 37% of Okra
Out of the total production of fruits and vegetables, nearly 76 per cent is consumed in fresh form, while wastage, and losses account for 20 to 22 per cent. Only 2 per cent of vegetable production and 4 per cent of fruit production are being processed. This is in sharp contrast to the extent of processing of fruits in several other developing countries such as Brazil (70 per cent), Malaysia (83 per cent), Philippines (78 per cent) and Thailand (30 per cent).
The vast production base offers India tremendous opportunities for export. During 2013-14, India exported fruits and vegetables worth Rs. 8760.96 crores which comprised of fruits worth Rs. 3298.03 crores and vegetables worth Rs. 5462.93 crores. Mangoes, Walnuts, Grapes, Bananas, Pomegranates account for larger portion of fruits exported from the country while Onions, Okra, Bitter Gourd, Green Chilles, Mushrooms and Potatoes contribute largely to the vegetable export basket. The major destinations for Indian fruits and vegetables are UAE, Bangladesh, Malaysia, UK, Netherland, Pakistan, Saudi Arabia, Sri Lanka and Nepal. The country has exported 2,87,384.63 MT of processed fruits and vegetables to the world for the worth of Rs. 2,266.66 crores during the year 2013-14. The major export destinations are United States, Saudi Arabia, United Kingdom, Netherland, United Arab Emirates and Japan. India is also a major exporter of Mango Pulp in the world. The country has exported 1,74,860.34 MT of Mango Pulp to Saudi Arabia, Yemen Republic, Netherland, United Arab Emirates and Sudan for the worth of Rs. 772.97 crores during the year 2013-14. India is also a prominent exporter of dried and preserved vegetables to the world. The country has exported 56,158.40 MT of dried and preserved vegetables to Germany, Russia, United Kingdom, United States, France and Brazil for the worth of Rs. 742.74 crores during the year 2013-14.(Source: APEDA)
The fruit and vegetable processing industry in India is highly decentralized. A large number of units are in the small scale sector, having small capacities upto 250 tonnes/annum though big Indian and multinational companies have capacities in the range of 30 tonnes per hour or so. The prominent processed items are fruit pulps and juices, fruit based ready-to-serve beverages, canned fruits and vegetables, jams, squashes, pickles, chutneys and dehydrated vegetables. More recently, products like frozen pulps and vegetables, frozen dried fruits and vegetables, fruit juice concentrates and vegetable curries in restorable pouches, canned mushroom and mushroom products have been taken up for manufacture by the industry.
Processing of fruits and vegetables in India holds tremendous potential to grow, considering the still nascent levels of processing at present. Though India’s horticultural production base is reasonably strong, wastage of horti produce is sizeable. Processing and value addition is the most effective solution to reduce the wastage. Considering the wide-ranging and large raw material base that the country offers, along with a consumer base of over one billion people, the industry holds tremendous opportunities for large investments.
Opportunity in Food Processing
The Indian food –processing industry is primarily export oriented. India’s geographical situation gives it the unique advantage of connectivity to Europe, the Middle East, Japan, Singapore, Thiland, Malaysia and Korea. One such example indicating India’s location advantage is the value of trade in agriculture and processed food between India and Gulf region. Various products, such as tomato puree, canned fruit, frozen fruit, frozen vegetables and ginger-garlic pastes, gained popularity among Indian consumers. Frozen and canned/preserved food products are proving to be better alternatives to fresh foods due to the convenience of storage and usage they offer. Demand for fresh, chilled and processed fruits and a vegetable is also increasing in modern retail. Even some small retailers have started keeping refrigerators to stock frozen peas or corn. This trend is likely to continue over the forecast period and will help drive sales and penetration of processed fruits and vegetables in India.
100% FDI is allowed under automatic route in food processing industry and food infrastructure including food parks, distillation & brewing of alcohol, cold storage chain and warehousing. Five-year tax holiday for new food processing units in fruits and vegetables processing along with other benefits in the budget has bolstered the government’s resolution of encouraging growth in this sector.