The association said that inefficiencies in supply chain, absence of economies of scale, technology up-gradation and quality issues are certain key challenges dogging India's Rs 6 lakh crore worth food processing industry.
It demanded that the government should fill prevailing gaps in infrastructure availability.
"There is a need to lure more investments in infrastructure to bring in more organized sector investments into food processing as currently unorganised sector forms major part with a share of about 42 per cent," Assocham Secretary General DS Rawat said in a statement.
"Ensuring a more efficient supply-chain network to boost linkages between food processing industries and farmers, promoting crop planning, extending advisory to farmers to produce top quality processed food, promoting agricultural export zones, encouraging contract farming, developing robust cold storage infrastructure and other related factors can help drive growth and development of food processing industry," the association said.
"Small scale of most food processors in India prevents any timely up-gradation of technology, which is vital to improve quality of product," it said.