I ICRIER Report unveils untapped opportunities in cold chain business

According to the Ministry of Agriculture & Food Processing Industries, Government of India; the ongoing projects in the food-processing industries sector will create an additional capacity of 1.7 lakh tonne of cold storage, 1.37 lakh tonne CA (controlled

Addressing a function recently organised by Indian Council for Research on International Economic Relations ( ICRIER), Indian Beverage Association ( IBA) and Academic Foundation in New Delhi; Sharad Pawar, Agriculture and Food Processing Industries emphasised on state-level reforms and linkages between agricultural production and the requirement of food-processing industries for fast growth of the sector. At this function, an ICRIER Report on ‘Food Processing Industry in India: Unleashing the Potential of the NonAlcoholic Beverages Sector’ was released by the Minister.

Commenting on opportunities and challenges pertaining to non-alcohoic beverage industry, which is an important segment of the food processing ( FPI) sector, Pawar called for developing economies of scale to make it globally competitive. He commended the fact that major players in this sector are planning incremental investments to the extent of US$ 10 billion by 2020. “I am certain that given the strong backward linkages of this sector with the agricultural sector, particularly in the areas of demand for sugar, fruits, pulp and vegetables, innovative ways of enhancing the yield will occur,” he said.

Pawar also welcomed the investors to make use of various incentives offered by the Government to them. In August 2013, the Government has approved 75 new cold chain projects. Out of these, 56 projects have already been sanctioned. MOFPI has now invited offers for setting up of 15 cold chain projects under the Scheme for Cold Chain, Value Addition & Preservation Infrastructure. “I hope investors will take benefit of the Government’s scheme of grant in aid up to R10 crore for setting up a cold chain project,” he added.

Pondering on the problems faced by the food processing industries, Pawar emphasised on the need for streamlining the clearance processes and other reforms. Presently on the regulatory front, around 40 different approvals are needed to set up a greenfield manufacturing plant. These include clearances from different government bodies at the centre, state and local levels. If the process is streamlined, India can develop as a manufacturing hub. According to Pawar, a number of reforms have to be taken at the state level. For instance, there is an urgent need to have uniform classification for the non-alcoholic beverage sector by the State Pollution Control Boards and all states should classify non-alcoholic beverages under the ‘orange’ category along with other food processing industries.

Also speaking at this event occasion were Isher Judge Ahluwalia, Chairperson, ICRIER; Saumitra Chaudhuri, Member, Planning Commission; Shiraj Hussain, Secretary, Ministry of Food Processing Industries; Pankaj Agrawala, Secretary, Department of Consumer Affairs; Ashok

Gulati, Chairman, Commission for Agriculture Costs and Prices and Ajay

Shankar, Member Secretary, National Manufacturing Competitiveness Council.

On the regulatory front, around 40 different approvals are needed to set up a greenfield manufacturing plant

ICRIER Recommendations

The ICRIER Report suggests that reforms in agriculture, manufacturing and retail are interlinked and it is important that policy changes are more coherent. For instance, the survey respondents asserted that unless GST is implemented organised retailers cannot streamline the supply chain. The report points out that the food processing sector will benefit only if there are uniformly low taxes for processed food. The policy should also be uniform, across the country.