The UK’s food industry has been urged to focus on engaging within India, as the country’s food and food services market is expected to grow from £305 billion to £500 billion.
A new report co-written by India’s Yes Bank and Santander UK has noted that UK firms could play a central role in India’s growth, with the country’s food industry reportedly experiencing both very high levels of wastage and low levels of processing.
In addition, the report states that only 25% of the sector is currently considered ‘organised’ and the “highest levels in India” recognise that this something that needs changing, presenting both trade and investment opportunities for UK companies in a number of diverse areas.
From a trade perspective, opportunities are expected in exporting the equipment, knowledge and expertise required to build robust food processing infrastructure (food parks, processing plants, transport, cold chain storage etc.).
From an investment perspective, for some food companies, there is also the interest in manufacturing locally (to satisfy local demand at a local price point or for regional export), and in this area, the Indian government has put in place incentives to support, the report highlights.
It also stresses that recent research commissioned by the Food & Drink Federation concluded that India is one of the top three markets that UK food and drink businesses would like to target – a fact recognised by the UK Government, which has included India as a priority market in its latest food and drink export action plan, targeting £349 million of additional sales over the next five years.
UK food and drink firms (including supply chain) are also urged to capitalise on India’s status as one of the world’s largest producers of raw and processed food products to meet consumer demand in the UK.
The industry accounts for 9% of India’s manufacturing GDP and is the largest employer in the country providing employment for nearly 1.5 million people.
Total processed food exports were worth £11.24 billion in 2016, led by onions, grapes, cucumbers, buffalo meat, groundnuts, guargum and rice.
Nitin Puri, senior president, food and agribusiness strategic advisory & research, Yes Bank, commented: “India’s strategic location and its diverse raw material base serve to make it very promising for the food processing industry. Its dynamic food market presents a plethora of trade and investment opportunities for UK firms across the value chain, ranging from the introduction of novel consumer food products and technology upgradation to establishing cold chain and logistics infrastructure.”
Andrew Williams, UK business development director – food & drink, Santander Corporate & Commercial, added: “The Indian food and drink sector is in an extremely dynamic position. This can be attributed to the demands of feeding a large population, changing demographics, heightened awareness on food safety and the growth of internal and foreign investment.”
The total UK-India bilateral trade in goods and services was worth £16.33 billion in 2015, with food processing listed as one of the major categories of FDI into India from the UK.
