Product development and innovation in the food processing sector has taken a back seat due to lack of investments and incentives, a study today said.
Since the industry is largely unorganised, only players are making use of the newer technologies to increase production and meet international quality standards, a CII - Grant Thornton report 'Indian Food & Beverage sector' said.
"Requirement of investments, lack of bank credit facility and long gestation period have been impeding the adoption of newer technologies," it said.
Considering its possible role in achieving increased agri production by ensuring better remuneration for farmers, growth of food processing sector would need to be a significant component of the second green revolution, it added.
"A developed food processing industry will reduce wastages, ensure value addition, generate additional employment opportunities as well as export earnings and thus lead to better socio-economic condition of millions of farm families," it said.
The report also highlights that the organised food sector is expected to increase on the back of favourable demographics (middle class, urbanisation) and rising disposable incomes.
"The future of the food and beverages sector looks promising with the growing demand due to change in the consumer's lifestyle and consumption patterns including food habits. The sector is expected to play a key role in bridging the gap between the demand and the supply sides and addressing the key concerns of the sector - rising food prices and high levels of food wastage," it said
It also said that with the increase in attractiveness of the food processing industry, there has been significant deal activity in this space with mixed contribution from corporate M&A and private equity investments.
Meanwhile in a separate statement, CII said that Peru, a South American nation, said that Indian businesses can invest in areas of innovation, technology, energy and telecommunication.
Quoting, Riva Ganguly Das, Joint Secretary in Ministry of External Affairs, it said the interaction between CII members and Vice Minister of Foreign Trade of Peru Edgar Vasquez came at an appropriate time where India and Peru are in the process of discussing a potential Free Trade Agreement.
Bilateral trade between the countries has crossed the USD 1 billion mark.
