India lacks conditions to lure frozen food processors away from China: expert
It is wishful thinking that India claims it can attract frozen food buyers away from China, as it has neither strong domestic demand for such products, nor a mature business environment to replace China's position in the frozen food supply chain, said Chinese experts.
An Indian government minister recently told media that the Indian government is betting on its frozen food sector to earn more foreign currency.
“I don't think that India possesses the capacity to reach its goal in the short term, as it has neither the hardware conditions, such as plants and refrigerated warehouses, nor the software conditions, like talent and management experience,” Dai Yonghong, director of the Institute of Bay of Bengal Studies at Shenzhen University, told the Global Times Sunday.
Dai said it would be impossible for India to realize its goal within five years.
Harsimrat Kaur Badal, India's food processing industries minister, told Bloomberg that although China has a comparative advantage over India, the pandemic is prompting people to rethink sourcing locations.
“We have identified key sectors such as the frozen food and ready-to-eat segments,” she said, adding that the Indian government is speeding up capacity additions for cold storage chains, reefer vehicles and mega food parks to support the food processing industry, Bloomberg reported.
However, according to the
Reserve Bank of India, the central bank, the country is a major global producer of some food items, but it only processes 10 percent of its total output due to gaps in supply chain infrastructure, inadequate links between production and processing, and an inadequate focus on quality and safety standards.
According to industry reports, the Indian frozen foods market was worth 74 billion rupees ($974.2 million) in 2018 with a projection to reach 188 billion rupees by 2024. By comparison, China's frozen food market is expected to be valued at $26.5 billion by 2024, driven by an increase in demand, said an international market research and consulting organization Hexa Research.
“I don't see any comparative advantage of India in domestic market demand, overseas orders, technology or the international competitiveness of Indian food processing enterprises,” Dai noted.