Demand for food ingredients in India may rise 6.7% till 2029

The demand for food ingredients and high-quality packaging has gone up in the post pandemic time in India said industry executives.

The India food ingredients market, currently estimated at $1584.08 million, is projected to grow at a CAGR of 6.7% till 2029, said analysts at a food ingredient, packaging & processing industry show called Fi India & ProPak India. Increasing use of food ingredients coupled with growing ready-to-eat and convenience foods has led to the surge in demand, they added.

The COVID-19 pandemic accelerated a significant shift in food habits, including consumer buying preferences, consumption patterns and overall behaviour. Greater awareness of the possible health problems related to foods has led to the growth of demand for health and wellness products and ingredients, they further said. Yogesh Mudras, managing director, Informa Markets in India , the organisers of the show said, “The  Indian food industry is poised for exponential growth, currently growing at a CAGR of 11%, with a projected output of $535 billion by 2025. This high-growth and high-profit sector has emerged due to its immense potential for value addition, particularly within the food processing industry.”

“Consumers’ awareness of ingredients, changing food habits, consumption patterns, low production costs, and ever-changing diet fads, food preferences and hygiene aspects of food packaging have significantly contributed to the boom in food and health ingredients, processing, and packaging industries,” he added.

Through the Ministry of Food Processing Industries (MoFPI), the Government of India, is taking steps to boost investments in the food processing industry. The government has continued the umbrella PMKSY scheme with an allocation of ?4,600 crore till March 2026 for the sector.

The Indian food processing industry accounts for 32% of the country’s total food market, and is ranked fifth in terms of production, consumption, export and expected growth, industry officials said. Talking about the food ingredients industry,  Dr. Alok Kumar Srivastava, President, Association of Food Scientists & Technologists India (AFSTI) said , all stakeholders must help to make India a global hub for food ingredients, considering the changing geopolitical scenario in the background of the pandemic.

“In the next 30 years, the world will add over 1.5 billion people, and we all know who are going to feed this population. Food security is also an issue where India can easily become the food factory of the world,” Nilesh Lele, President, Chamber for Advancement of Small and Medium Businesses (CASMB) said.

“The agriculture and food industry in India is valued at around $450 billion and growing at 12-14%, much faster than the economy,” he added.

The India packaging market was valued at $81.07 billion in 2021, and is expected to reach $204.81 billion by 2025, registering a CAGR of 26.7%, industry officials said. Packaging is one of the high growth industries in India and growing at 22-25% per annum and is becoming a preferred global hub for the packaging industry, they added.

According to Alessandro Liberatori, Trade Commissioner, Italian Trade Agency the importance of packaging has been realised during the pandemic due to emphasis on health and hygiene.

Analysts said India was experiencing the emergence of health-conscious consumers leading to a structural shift in food preferences and purchase decisions. And, this would cause significant growth across categories, with healthy snacking propelling market expansion, they added.

The Hindu