The government should allow FDI in multi-brand retail sector as it will help the food processing industry in adopting new technologies and improving productivity, Assocham said today.
The Rs 5.45 lakh crore food processing industry is estimated to touch the level of Rs 8.73 lakh crore by 2014-15, the chamber said.
Despite high growth, the industry is still dominated by small scale and unorganised sector mainly involved in producing low value added products, it said.
Only 7% of total agriculture produce is processed in India compared to 53% in the US and 42% in New Zealand, it said.
"The critical need of the hour is to improve technology and productivity in order to be competitive globally," it said adding, "the Indian market is increasingly becoming important for many multinational corporations like Wal-Mart, Pepsi, Cargill, Heinz and Kellogs which have invested in the food processing sector."
The food processing industry contributes nine% to the GDP, accounts for 14% of total industrial output and provides direct employment to 16 lakh workers.
The government is considering to allow Foreign Direct Investment (FDI) in politically sensitive multi-brand retail.
