India bets on frozen food buyers moving away from China

A huge opportunity has opened up mainly in east Asian nations, which are looking for alternative suppliers for frozen food, Harsimrat Kaur Badal, food processing industries minister, said. The government is helping local companies take advantage of the situation, she said in an emailed interview.

Although, India ranks second in terms of global food production, it processes only 10% of its total output due to infrastructure challenges such as the shortage of cold storages. The government’s push may help it earn more foreign currency at a time when some sectors are struggling because of the virus, and would be another step toward Prime Minister Narendra Modi’s pledge to double farmers’ income by 2022.

“Given the global shift toward India in an environment of anti-Chinese sentiments, I see a substantial growth in the processed and value-added products. We have identified key sectors such as frozen food and ready-to-eat segment." India has a large untapped potential, she said, adding the country is also a rich source for organic food.

Government push

The food processing industry accounts for 25% of India’s agricultural exports and is growing at about 8% per annum, according to government data. Total export of processed food and other value-added products stood at almost $12 billion during April-November of 2018-19.

“The Trust deficit, which has widened due to Covid-19, has impacted China’s trade and commerce," Badal said. Although China has a comparative advantage over India in terms of manufacturing and costs, the pandemic is prompting people worldwide to rethink sourcing destinations. The government is speeding up capacity additions for cold storage chains, reefer vehicles and mega food parks to support the food processing industry, she said.

The South Asian nation has set a target of boosting the value of farm exports to $60 billion by 2022, the minister said. That compares with $39.4 billion in 2017-18. The country exported processed and tinned marine products worth $456.8 million in 2019-20, according to government data.

“India now has an advantage at this time of adversity," the minister said.