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India is one of the world’s largest producer as well as consumer of food products, with the sector playing an important role in contributing to the development of the economy.

Food and food products are the biggest consumption category in India, with spending on food accounting for nearly 21% of India’s GDP and with a market size of USD181 billion.

Domestically, the spending on food and food products constitutes the largest portion of the Indian consumer’s spending – more than a 31% share of wallet.

From 2004 to 2008, there was high growth recorded in the Indian food industry, from USD141 billion to USD181 billion, a compounded annual growth rate (CAGR) of 6.4%.

Going forward, the Indian domestic food market is expected to grow by nearly 40% of the current market size by 2015, to touch USD258 billion by 2015.

Thanks to rising disposable incomes, the Indian overall food consumption market is forecast to climb from USD155 billion in 2005 to USD344 billion in 2025 – with compound growth at 4.1%. Growing incomes, falling poverty, changing lifestyles and companies racing to capture India’s middle and upper middle class consumers will cause the food market to evolve dramatically in the coming years.

Spending on agri-products is expected to touch USD177 billion by 2015. Milk and milk products are expected to increase their overall share in spending to reach a size of USD49 billion and spending on meat and marine products is expected to touch USD32 billion by 2015. India’s snack food and snack food ingredient import market has trebled between 2002 and 2006 from USD10 million to USD30 million – with food items comprising almost 97% of this total.

Source: Minstry of Food Processing Industries, India
* Projections

Increased income levels, cheap credit facilities, higher disposable income have resulted in greater spending and consumption among consumers. Increased mobility, exposure, increased aspirations and availability of a wider range and products, have also contributed to shifts in spending orientation.

In the affluent and middle class, the  percentage share of food expenditure vis-à-vis other products/categories has dropped, the total expenditure on foods has increased across all classes. Initially food expenditure was concentrated around basic food items like food grains, vegetable oils and sugar; there is now an inclusion of fruits & vegetables, eggs, meat, beverages and processed food in their repertoire - contributed both by increased availabilty and affordability. There is an increasing trend of a shift from food security to nutritional security and convenience shopping in the recent past.

Main sectors comprising of the Indian Food Processing Industry are fruits and vegetables, dairy products, marine and fish, meat and poultry, edible oils, staples, alcoholic and non alcoholic beverages, breads and bakery, confectionery and packaged foods, among others.

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