India's Food Processing Sector: A $535 Billion Opportunity with 90% Untapped Potential

India's food processing sector is at a decisive inflection point, with the industry already valued at over $300 billion and projected to reach $535 billion by 2026. However, the country processes only about 10% of its agricultural produce, compared to 80% in developed economies, according to Suresh Narayanan, former Chairman and Managing Director of Nestlé India.

Speaking at a conference titled 'Reimagining Agro-Food Processing: The AI & Robotics Revolution' organised by the Bangalore Chamber of Industry and Commerce (BCIC), Narayanan described the 90% gap as India's biggest opportunity for value addition, employment generation, and rural prosperity.

He noted that strong government support is already in place, including a ₹4,064 crore budget allocation, a Production Linked Incentive (PLI) scheme, and over ₹9,227 crore in private investments.

C.N. Shiva Prakash, Managing Director of the Karnataka State Agricultural Produce Processing and Export Corporation Limited (KAPPEC) and a director on the board of the Karnataka State Coir Development Corporation, highlighted Karnataka's emergence as a major force in micro food processing. The state has over 10,500 micro food processing units, funded and subsidised, creating employment for nearly 1 lakh people.

Under the Prime Minister's Formalisation of Micro Food Enterprises (PMFME) scheme, Karnataka has built a strong ecosystem for food processing, with special focus on millet-based industries. Prakash stated that the state alone has more than 3,500 millet manufacturing and processing units, making it one of the strongest millet-processing ecosystems in the country. These units are supported with subsidies of up to 50% of capital investment, capped at ₹15 lakh. While the Union government contributes 35% under the PMFME scheme, Karnataka adds another 15%, making it a highly attractive model for entrepreneurs.

Prashant Gokhale, President of BCIC, emphasised that India must move beyond food self-sufficiency and position itself as a global food powerhouse, especially in times of geopolitical uncertainty. He noted that India produces nearly 350 million tonnes of food grains and has achieved self-sufficiency for 1.5 billion people. However, he questioned why the country should stop at self-sufficiency and not make food for the world.

Gokhale pointed out that India still loses nearly 30% of its produce to wastage, representing almost 100 million tonnes of additional food potential. He said that with AI, robotics, and advanced food processing, India can significantly reduce waste, create value-added products, and strengthen global food security.

The one-day conclave brought together policymakers, industry leaders, agri-entrepreneurs, technology experts, and researchers to deliberate on the role of artificial intelligence, robotics, automation, and innovation in transforming India's agro-food processing ecosystem while ensuring inclusive growth for farmers and rural communities.