Manufacturing Sector
Food Processing
The food processing sector plays a key role in strengthening linkages between industry and agriculture. A well-developed food processing sector with higher levels of processing helps reduce wastage, increase value addition, promote crop diversification, ensure better returns to farmers, generate employment, and enhance export earnings. The sector supports integration and collaboration between agriculture and industry and strengthens the agricultural value chain. It also addresses issues related to food security and food inflation and supports the supply of safe and nutritious food.
Food processing in India covers fruits and vegetables, plantations, grain processing, spices, milk and dairy products, meat and poultry, fisheries, non-alcoholic and alcoholic beverages, and consumer product groups such as confectionery, chocolates, cocoa products, soya based products, mineral water, and high protein foods. The sector includes enterprises ranging from micro units to large industries. Food processing can be analysed across different levels, namely primary, secondary, and tertiary processing. Primary processing refers to the conversion of raw agricultural produce into commodities suitable for human consumption. This includes activities such as cleaning, grading, sorting, and packing. Food processing industries generally operate at higher levels of processing, where new or higher value food products are manufactured.
Food Processing in India
Over the year's agricultural production in India has consistently recorded higher output. India ranks first in pulses, milk and onion, second in vegetables primary, fruits primary, wheat, rice, eggs primary etc. and third in cereals in World Agriculture in 2021. An abundant supply of raw materials, increase in demand for food products and incentives offered by the Government has impacted food processing sector positively.According to the Annual Report 2024-25 of the Ministry of Food Processing Industries, (MoFPI) Government of India, India's Gross Value Added (GVA) from Food Processing Industries (FPI) in 2023-24 is estimated to be around 2.24 lakh crore (Constant Prices) which is about 1.39 per cent of India's Total GVA. Growth rate of GVA from FPI in 2023-24 is estimated to be around 7.55 per cent. The share of food processing industries in GVA from manufacturing is about 7.93 per cent and that of Agriculture, Forestry and Fishing is 9.46 per cent. In food processing sector, around 22.96 lakh workers are employed in 42,801 registered factories in 2022-23, out of which 2.17 lakh workers are women. Around 46.57 lakh workers are employed in 24.59 lakh unincorporated enterprises in food processing sector, of which more than 11.25 lakh workers are women. The details of employment in the Indian food processing sector is given in Table 4.5.1.
Table 4.5.1
Employment in food processing Sector in India
Type |
Total Number of Factories |
Total Number of FPI Factories |
% of FPI in Total Factories |
Total Employment in Factories (in Lakhs) |
FPI Employment (in Lakhs) |
% of FPI Employment in Total Employment |
Women Employment in FPI (in Lakhs) |
% of Women Employment in total FPI Employment |
Registered |
2,53,334 |
42,801 |
16.89 |
184.95 |
22.96 |
12.41 |
2.17 |
9.45 |
Un- incorporated |
6,50,48,400 |
24,59,929 |
3.78 |
306.25 |
46.57 |
15.21 |
11.25 |
24.15 |
Source: Annual Report 2024-25 of the MoFPI, Government of India,
India's Food - Export and Import
The value of agri-food exports (including processed food exports) in 2023-24 was US $ 46.43 billion accounting for about 11.7 per cent of India's total exports (US $ 395.39 Billion). The value of processed food exports was US $ 10.88 billion accounting for about 23.4 per cent of India's agri-food exports. The value of import of agri-food items (including processed food) in 2023-24 was US $ 31.7 billion which was 4.7 per cent of India's total imports (US $ 678.21 billion). The value of import of processed food in 2023-24 was US $ 5.34 billion which was 16.9 per cent of India's total agri-food imports. The share of India's agri-food exports in the world was 2.39 per cent in 2023 and the share of India's agri-food imports in the world was 1.53 per cent in 2023. Hundred per cent Foreign Direct Investment (FDI) is permitted under automatic route in food processing industries in India. The food processing sector witnessed FDI equity inflow of US $ 7.22 billion during the period April 2014 to December 2024 (Annual Report 2024-25, Ministry of Food Processing Industries, Government of India).
Food Processing Sector - Union Government Initiatives
Development initiatives have been taken by the Ministry of Food Processing Industries of India to promote growth of the food processing sector since it has been identified as one of the priority sectors under "Make in India." PM Kisan Sampada Yojana (PMKSY), PM Formalisation of Micro Food Processing Enterprises (PM FME) Scheme and Production Linked Incentive Scheme for food processing industry (PLIS-FPI) are three of the main schemes used for the purpose. Other activities include promoting of Foreign Direct Investment and dissemination of all relevant information relating to food processing sector through Ministry's website and Investor Portal "Nivesh Bandhu".
Food Processing Industry in Kerala
The Government of Kerala has formulated a new industrial policy in 2023 to accelerate its industrial growth and create more employment opportunities. This policy builds upon the previous policy from 2018, incorporating changes that align with the current times. Food Processing has been accorded the status of a Priority Sector by the State in new Industrial Policy 2023. Kerala has been successful in developing its ethnic food preparations for tapping the export markets around the world, mainly to cater to the vast Malayali diaspora across the world. These products have evolved into an important export sector. Besides, lot of non-residents have also made investments in food processing sector of the State. The State Government offers incentive for setting up industry through its 'Entrepreneur Support Scheme' and special incentive is offered for food processing, it being a priority sector. As per Annual Survey of Industries 2021-22 (Department of Economics and Statistics, Government of Kerala), "Manufacturing of Food products" had the largest share in total employment in the factory sector (28.2 per cent) and largest share in total number of Factories( 21.77 per cent) in Kerala. Its share in total output in Kerala's factory sector was also significant at around 19.09 per cent and share in GVA of the state is 16.84 per cent.
Year of Enterprises and Food Processing Sector
A total of 3,59,875 units were started under the Year of Enterprises programme of Kerala since 2022 till November 2025. Of this, about 50,077 are units in the manufacturing sector, 1,51,544 units are in service sector and 1,58,253 units are in trade category. As part of Year of Enterprises about 81,158 MSME units were started in the agro food, beverage, meat/fish product and processing subsectors. Of which 24,149 units were in Manufacturing sector, 24,262 units were in Service sector and 32,747 units were in Trade Sector. Hence food processing units contribute 48.22 per cent of units started in Manufacturing Sector, 16 per cent of units started in Service Sector and 20 per cent of units started in Trade Sector (YoE 1.0, YoE 2.0 & YoE 3.0 as of November 18, 2025).
Pradhan Mantri Formalization of Micro Food Processing Enterprises (PMFME) scheme
The Ministry of Food Processing Industries (MoFPI), Government of India in partnership with the State Governments has launched a Centrally Sponsored Scheme (CSS) Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) for providing financial, technical and business support for upgradation of existing micro food processing enterprises as part of the 'Atma Nirbhar Bharath Abhiyan'. The Department of Industries and Commerce is implementing the PMFME scheme through Kerala Bureau of Industrial Promotion (K-BIP), to support micro food processing enterprises with credit linked subsidy up to 35 percent of project cost with ceiling of Rs. 10.00 Lakh for expansion and modernisation. The scheme also includes support for working capital, small tools and grant for strengthening backward and forward linkages, common infrastructure packaging branding and marketing etc. Focus is on value addition of local perishable products in identified agro clusters of fisheries, dairy, poultry and other allied segments. The scheme has been implemented since 2020-21 with expenditure shared at 60:40 ratio between Union Government and State. Achievements under the scheme include;
- Loan assistance has been given to 3086 individual Micro Enterprises, against the scheme target of 3,000 loans (achieved 104 per cent as on March 31, 2025) and also sanctioned 30 Loans to Farmers Producers Organisations (FPOs), Farmers Producers Companies (FPCs), Producer cooperatives and societies for Group Enterprises in the FY 2024-25. An amount of Rs.50.00 crores and Rs.80.00 crores was received from MoFPI as 60 per cent GoI share during 2024-25 and 2025-26 respectively. An amount of Rs.32.67 crores and Rs.49.34 crores was released from Government of Kerala as 40 per cent State share during 2024-25 and 2025-26 respectively.
- PMFME Food Tech Kerala 2025 Exhibition - Exhibition conducted from May 22 to 24 , 2025 at Jawaharlal Nehru Stadium Ground, Kaloor, Kochi by providing 104 stalls to PMFME beneficiaries for the display and sales of their products
- The Common Incubation Facility (CIF) - CIF under PMFME was inaugurated on August 12, 2025 at Agri Business Incubator in Kerala Agricultural University Campus, Vellanikkara, Thrissur. CIF is catering to the processing needs of ODOP(One District One Product) product of the region including Rice, Spices and Fruits & Vegetables.
Kerala Park Model Development - Food Processing
Kerala Industrial Infrastructure Development Corporation (KINFRA) is taking a pro-active role in the advancement of the food processing sector within the State. KINFRA is the nodal agency for implementing schemes under the Ministry of Food Processing Industries, Government of India; and the nodal agency of the State for implementing "Assistance to States for developing Export Infrastructure and Allied Activities" (ASIDE) scheme of the Ministry of Commerce and Industries. KINFRA has set up a number of food-based parks across the State. Details of KINFRA food processing units in KINFRA parks are given in Appendix 4.5.1.
- KINFRA Mega Food Park, Palakkad
Ministry of Food Processing Industries (MOFPI), Government of India has approved the proposal from KINFRA for setting up a Mega Food Park in 79.42 acres at Kanjikode, Palakkad, with 41 working units, in accordance with the Mega Food Park Scheme (MFPS) So far, the park has attracted an investment of Rs 22,659.41 lakh and about 50.22 acres of land is allotted. The park provides employment to 1,490 persons.
- KINFRA Food Processing Park, Kakkancherry (Malappuram)
The KINFRA Food Processing Park at Kakkancherry, Malappuram district, set up in an area of 71.63 acres, has 44 working units. So far, the park has attracted an investment of Rs. 15,675.94 lakh and an area of 36.95 has been allotted. About 1,835 persons are employed in the park.
- KINFRA Food Processing Park, Adoor (Pathanamthitta)
Kinfra's food processing park has been set up on 15 acres at Adoor in Pathanamthitta district with all necessary infrastructure requisite for food processing industries. About 12.312 acres of land has been allotted and 16 units function here. The park has attracted investment of around Rs 6,936 lakh so far. About 1,094 persons are employed in the park
- Food and Spices Park, Muttam, (Thodupuzha, Idukki)
KINFRA is setting up Spices park at Muttom in Thodupuzha, Idukki district. As the first phase of the park, setting up of infrastructure on 15.43 acres was completed and inaugurated on October 14, 2023. KINFRA has provided the necessary infrastructure facilities for functioning of industries for spices and their value-added products as well as food processing industries. About 6.79 acres of land has been allotted to 10 unit. The park has attracted private investment of around Rs 11,880 lakh generating around 433 employment opportunities. The development of second phase of the park (21.17 acres) commenced on September 19, 2024, and work for this phase is currently in progress. In the second phase, 2.50 acres of land has been allotted to 1 unit and attracted private investment of around Rs 5,064 lakh, and also generating around 150 employment opportunities.
- KSIDC Mega Food Park, Alappuzha
KSIDC Mega Food Park has been set up on 84.03 acres at Pallippuram, Cherthala , Alappuzha district , of which 68.03 acres are Developed area, with all necessary infrastructure requisite for food processing industries. It is focusing on the sea-food processing sector, with grant assistance from Ministry of Food Processing Industries (MOFPI), Government of India under the Mega Food Park Scheme. The park caters to marine food processing sector with common infrastructure facilities such as cold storage, deboning, deep freezer, standard design factory (SDF), common facility center (CFC) and industrial shed. It is based on a demand driven, hub and spoke model, with strong backward and forward linkages. It contains three vital components - the Central Processing Centre (CPC) at its Hub, Primary Processing Centres (PPC) and Collection Centres (CC) linked by the agro-logistics network as the spokes.About 58.65 acres of land has been allotted and 43 units function here. The park has attracted investment of around Rs 41,245 lakh so far. About 3,049 persons are employed in the park.
- Integrated Rice Park at Palakkad and Alappuzha
Integrated Rice Park at Palakkad and Alappuzha aim to modernize post - harvest handling, reduce losses and enhance income opportunities for rice farmers across kerala. Kerala Rice Limited has undertaken the implementation of these rice parks. Currently, civil construction works have been completed up to 88 per cent in Palakkad and 46 per cent in Alappuzha. The projects will be completed by 2026-27.
Implementation of Food safety system through NCHC
National Centre for HACCP Certification (NCHC) in association with Kerala Bureau of Industrial Promotion (K-BIP) has been conducting auditing, certification and recertification at various food processing and allied units in Kerala. National Centre for HACCP Certification (NCHC) in association with the Kerala Commissionerate of Food Safety has been organising awareness programmes on food Safety across the State. During FY 2024-25, the National Centre for HACCP Certification completed the process of auditing for the issue/renewal of HACCP Certification to 4 Food Processing and Allied Units from Kerala wiz M/s Nitta Gelatin India Ltd. Thrissur, M/s Dinesh Foods Kannur, Hotel Abad Atrium Ernakulam and Hotel Abad Plaza Ernakulam.
Challenges
The food processing sector experiences several issues that hinder its growth. It suffers from limited financial support, making it hard to expand or modernize its units. There are not enough primary processing centres. Inadequate storage and distribution facilities increase wastage and reduce access to markets. The sector also lacks innovation and new product development, which lowers its competitiveness. Poor coordination between production and processing creates supply-demand imbalances. Additionally, the slow adoption of modern technology limits improvements in productivity and quality.
To overcome these challenges, infrastructure and processing capacity of food processing sector should be improved. This requires major investment in various connected segments of the industry such as supply chain, technology inclusion, improving grading and packing centres, controlled-atmosphere facilities, transportation, cold storage at ports, airports, and railway stations, setting up of testing labs, and other support services like research, skill training, and marketing.
Way forward
Kerala is rich in a wide variety of natural food items. With many Keralites living abroad, along with the growing demand for processed food in India, the state has strong opportunities for developing its food-processing industry. To fully utilise this opportunity, the government needs to create a suitable platform for farmers, processors, and retailers to work together and link farm production with the global market. Continued government support along with implementation of PPP model and use of AI Technology can help the sector to develop a high-quality food-processing industry and gain a strong position in the global market in the coming years.