The Centre has set an ambitious target of increasing India's food processing level to 25% by 2031, up from 17% in 2023, and is considering a new policy initiative, possibly a National Processing Mission or PLI 2.0, to attract fresh investments into the sector. The move comes as a Deloitte India-FICCI report projects India's processed food industry could unlock a nearly $600-billion market opportunity by 2030, driven by rising incomes, premiumisation, digital adoption and technology-led innovation.
Speaking at the 17th edition of FICCI FoodWorld India 2026, Food Processing Industries Secretary Avinash Joshi said the ministry has internally set the target of raising the country's food processing level from 17% in 2023 to at least 25% by 2031. Referring to a recent Crisil report, he noted that the processing level has improved significantly from around 10% in 2010-11, reflecting steady progress in the sector.
Joshi said higher food processing levels would generate multiple benefits, including greater value addition, higher exports and stronger linkages across the primary, secondary and tertiary sectors of the economy. To achieve the 2031 target, he said the ministry has proposed a fresh investment-led programme, which could take the form of a National Processing Mission or a second phase of the Production Linked Incentive (PLI) scheme.
The current PLI scheme for the food processing industry, implemented from 2021-22 to 2026-27 with an outlay of ₹10,900 crore, has emerged as one of the government's most successful incentive programmes, Joshi said. According to him, the scheme has achieved its targets in attracting investments, expanding manufacturing capacity, increasing exports and generating employment. The food processing PLI alone accounted for nearly 48% of employment generation among all PLI schemes, highlighting the labour-intensive nature of the sector.
With over 90% of food processing units belonging to the MSME segment, Joshi urged industry to improve efficiency and enhance global competitiveness. He said India has surplus agricultural production, but the challenge is to move beyond volume-driven growth towards value addition and improved nutrition.
The Secretary also announced that the government has begun work on creating a 'Bharat' brand for processed food, aimed at promoting Indian cuisines and alcoholic beverages in global markets through industry partnerships and targeted branding initiatives. At the same time, he stressed that food safety standards would remain non-negotiable as the sector expands.
Meanwhile, the Deloitte India-FICCI report said India's food ecosystem is undergoing a structural transformation as consumers increasingly demand healthier, convenient and premium products. Nutrition and functional foods are growing nearly twice as fast as the broader food market, while digital commerce is reshaping consumption patterns.
Technology is expected to play a central role in the sector's next growth phase. The report noted that artificial intelligence and advanced analytics are being increasingly used for demand forecasting, manufacturing, product development and marketing. Nearly 84% of Indian CEOs are increasing or reallocating investments towards generative AI, while AI-enabled innovation is reducing product development timelines by 30-60%.
Digital retail is also expected to accelerate growth, with online platforms projected to account for 25-30% of food retail sales in India's top metropolitan cities by 2030. Around 70% of new food products are now launched first through e-commerce and quick commerce platforms before expanding into conventional retail channels.
Although India's food exports have crossed $50 billion, processed products account for only about one-fifth of exports. The report said continued investments in processing infrastructure, AI, automation, supply chains and regulatory reforms will be essential for boosting value-added exports and achieving the sector's long-term growth potential.