Kurukshetra Magazine January 2024 - 2 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

 Page 1


Kurukshetra         January  2024 18
Dr. Ishita G. Tripathy
he food processing sector of an 
economy is the quintessential example 
of mutually reinforcing primary and 
secondary sectors in terms of demand-
supply dynamics and forward and backward linkage 
effects. This sector is extremely vital for an agrarian 
country like India. It not only acts as an effective link 
between agriculture and industries but also helps 
in reducing wastages of perishable agricultural 
produce, ensuring value addition, and diversifying 
and commercialising agriculture, thereby generating 
incremental employment and income for farmers.
T
Socio-economic changes, such as rapid 
urbanisation, impact the food consumption behaviour 
of citizens. C onsumption diversity and dietary 
diversification needs with modified food behaviours 
prompt demand shifts towards specific food categories, 
requiring an overhaul in the food demand-supply 
system too. It is the startups that bring new ideas 
into the food sector and work on creating innovative 
products and reinvigorating supply chains. 
Importance of Food Processing Sector
Unquestionably, the food processing sector is one 
of the most important sectors of the Indian economy, 
The author is Additional Development Commissioner, Ministry of Micro, Small and Medium Enterprises. 
Email: igtripathy@gmail.com
Redefining Food Redefining Food 
Processing Sector Processing Sector 
through Startups through Startups
In the inaugural event of 
‘World Food India 2023’ held 
in New Delhi on 03 November 
2023, the Hon’ble Prime 
Minister of India referred to 
the food processing sector 
as a ‘Sunrise’ sector and 
underscored the role played 
by the entrepreneurial 
abilities of startups in its 
phenomenal growth. Startups 
in the food processing 
ecosystem are found at 
various stages of the value 
chain and together have the 
potential and dynamism to 
complete the value chain 
and lead to transformational 
changes in the economy.
Page 2


Kurukshetra         January  2024 18
Dr. Ishita G. Tripathy
he food processing sector of an 
economy is the quintessential example 
of mutually reinforcing primary and 
secondary sectors in terms of demand-
supply dynamics and forward and backward linkage 
effects. This sector is extremely vital for an agrarian 
country like India. It not only acts as an effective link 
between agriculture and industries but also helps 
in reducing wastages of perishable agricultural 
produce, ensuring value addition, and diversifying 
and commercialising agriculture, thereby generating 
incremental employment and income for farmers.
T
Socio-economic changes, such as rapid 
urbanisation, impact the food consumption behaviour 
of citizens. C onsumption diversity and dietary 
diversification needs with modified food behaviours 
prompt demand shifts towards specific food categories, 
requiring an overhaul in the food demand-supply 
system too. It is the startups that bring new ideas 
into the food sector and work on creating innovative 
products and reinvigorating supply chains. 
Importance of Food Processing Sector
Unquestionably, the food processing sector is one 
of the most important sectors of the Indian economy, 
The author is Additional Development Commissioner, Ministry of Micro, Small and Medium Enterprises. 
Email: igtripathy@gmail.com
Redefining Food Redefining Food 
Processing Sector Processing Sector 
through Startups through Startups
In the inaugural event of 
‘World Food India 2023’ held 
in New Delhi on 03 November 
2023, the Hon’ble Prime 
Minister of India referred to 
the food processing sector 
as a ‘Sunrise’ sector and 
underscored the role played 
by the entrepreneurial 
abilities of startups in its 
phenomenal growth. Startups 
in the food processing 
ecosystem are found at 
various stages of the value 
chain and together have the 
potential and dynamism to 
complete the value chain 
and lead to transformational 
changes in the economy.
19 Kurukshetra         January  2024
both in terms of its contribution to economic output 
and also in terms of overall economic growth. From 
2012–13 to 2020–21, the Gross Value added by the 
food processing industries at 2011–12 constant prices 
grew from Rs. 1.30 lakh crore to Rs. 2.37 lakh crore, as 
depicted in the Annual Report 2022–23 of the Ministry 
of Food Processing Industries. This sector is one of the 
fastest growing sectors in the country, having grown at 
10.3% during 2015–16 to 2020–21, vis-à-vis the growth 
rate of 5.1% in the overall manufacturing sector. This 
sector is also one of the sectors where consumer 
dynamism is highly palpable and easy to comprehend.
Startups: Sunrise and Inclusive Growth
The Union Budget 2023–24 stated that India 
has the third-largest ecosystem for startups, globally. 
India has the potential to become a global culinary 
hub and can combat global hunger. In the inaugural 
event of ‘World Food India 2023’ held in New Delhi on 
3 November 2023, the Hon’ble Prime Minister of India 
referred to the food processing sector as a ‘sunrise’ 
sector and underscored the tremendous inherent 
entrepreneurial potential of startups in the food sector. 
In this context, this article endeavours to evaluate the 
growth chart of the food processing sector in India 
and the enhanced contribution of startups to this  
growth story.
A study by NABARD Consultancy Service Pvt. Ltd. 
estimated in 2022 the percentage of harvest and post-
harvest loss of perishable food (Table-1). Tackling such 
losses, though challenging, is extremely important, 
considering the broader objective of food security for 
all. In this context, food processing startups need to be 
facilitated through specialised interventions that can 
ensure the presence of new research and development, 
technology, innovative processes, and products, and 
thereby enlarging the scope of an improved supply 
chain, value chain, and demand system in the food 
sector of the country. 
Table1: Estimated Loss of Perishable Commodities 
Perishable Commodities Estimated Loss (in %)
Fruits 6.02-15.05
Vegetables 4.87-11.61
Milk 0.87
Fisheries (Marine) 8.76
Fisheries (Inland) 4.86
Source: Rajya Sabha Starred Question No. 252 answered on  
11 August 2023. 
The role of women in food processing industrial 
startups has always been important. Out of more 
than 3.13 crore registered micro, small, and medium 
enterprises in the country, as many as 19 lakh are in 
the food processing sector, of which 33% are owned 
by women entrepreneurs. As per the Ministry of Food 
Processing Industries’ Annual Report, 2022–23, 11.18% 
of total 20.32 lakh registered employment is that of 
women workers and out of 51.11 lakh employees in 
the unincorporated non-agricultural enterprises in 
the food processing sector, 25% are women. There 
is a concentration in the southern States of Andhra 
Pradesh (14%), Tamil Nadu (12%) and Telangana (10%), 
which together constitute 36% of all registered food 
processing factories in the country. Besides, there 
are food processing products approved under One 
District One Product which range from coconut-based 
products of the districts of Andaman & Nicobar Islands 
and spices of Andhra Pradesh to walnuts of Arunachal 
Pradesh and bakery products of Chandigarh.
Page 3


Kurukshetra         January  2024 18
Dr. Ishita G. Tripathy
he food processing sector of an 
economy is the quintessential example 
of mutually reinforcing primary and 
secondary sectors in terms of demand-
supply dynamics and forward and backward linkage 
effects. This sector is extremely vital for an agrarian 
country like India. It not only acts as an effective link 
between agriculture and industries but also helps 
in reducing wastages of perishable agricultural 
produce, ensuring value addition, and diversifying 
and commercialising agriculture, thereby generating 
incremental employment and income for farmers.
T
Socio-economic changes, such as rapid 
urbanisation, impact the food consumption behaviour 
of citizens. C onsumption diversity and dietary 
diversification needs with modified food behaviours 
prompt demand shifts towards specific food categories, 
requiring an overhaul in the food demand-supply 
system too. It is the startups that bring new ideas 
into the food sector and work on creating innovative 
products and reinvigorating supply chains. 
Importance of Food Processing Sector
Unquestionably, the food processing sector is one 
of the most important sectors of the Indian economy, 
The author is Additional Development Commissioner, Ministry of Micro, Small and Medium Enterprises. 
Email: igtripathy@gmail.com
Redefining Food Redefining Food 
Processing Sector Processing Sector 
through Startups through Startups
In the inaugural event of 
‘World Food India 2023’ held 
in New Delhi on 03 November 
2023, the Hon’ble Prime 
Minister of India referred to 
the food processing sector 
as a ‘Sunrise’ sector and 
underscored the role played 
by the entrepreneurial 
abilities of startups in its 
phenomenal growth. Startups 
in the food processing 
ecosystem are found at 
various stages of the value 
chain and together have the 
potential and dynamism to 
complete the value chain 
and lead to transformational 
changes in the economy.
19 Kurukshetra         January  2024
both in terms of its contribution to economic output 
and also in terms of overall economic growth. From 
2012–13 to 2020–21, the Gross Value added by the 
food processing industries at 2011–12 constant prices 
grew from Rs. 1.30 lakh crore to Rs. 2.37 lakh crore, as 
depicted in the Annual Report 2022–23 of the Ministry 
of Food Processing Industries. This sector is one of the 
fastest growing sectors in the country, having grown at 
10.3% during 2015–16 to 2020–21, vis-à-vis the growth 
rate of 5.1% in the overall manufacturing sector. This 
sector is also one of the sectors where consumer 
dynamism is highly palpable and easy to comprehend.
Startups: Sunrise and Inclusive Growth
The Union Budget 2023–24 stated that India 
has the third-largest ecosystem for startups, globally. 
India has the potential to become a global culinary 
hub and can combat global hunger. In the inaugural 
event of ‘World Food India 2023’ held in New Delhi on 
3 November 2023, the Hon’ble Prime Minister of India 
referred to the food processing sector as a ‘sunrise’ 
sector and underscored the tremendous inherent 
entrepreneurial potential of startups in the food sector. 
In this context, this article endeavours to evaluate the 
growth chart of the food processing sector in India 
and the enhanced contribution of startups to this  
growth story.
A study by NABARD Consultancy Service Pvt. Ltd. 
estimated in 2022 the percentage of harvest and post-
harvest loss of perishable food (Table-1). Tackling such 
losses, though challenging, is extremely important, 
considering the broader objective of food security for 
all. In this context, food processing startups need to be 
facilitated through specialised interventions that can 
ensure the presence of new research and development, 
technology, innovative processes, and products, and 
thereby enlarging the scope of an improved supply 
chain, value chain, and demand system in the food 
sector of the country. 
Table1: Estimated Loss of Perishable Commodities 
Perishable Commodities Estimated Loss (in %)
Fruits 6.02-15.05
Vegetables 4.87-11.61
Milk 0.87
Fisheries (Marine) 8.76
Fisheries (Inland) 4.86
Source: Rajya Sabha Starred Question No. 252 answered on  
11 August 2023. 
The role of women in food processing industrial 
startups has always been important. Out of more 
than 3.13 crore registered micro, small, and medium 
enterprises in the country, as many as 19 lakh are in 
the food processing sector, of which 33% are owned 
by women entrepreneurs. As per the Ministry of Food 
Processing Industries’ Annual Report, 2022–23, 11.18% 
of total 20.32 lakh registered employment is that of 
women workers and out of 51.11 lakh employees in 
the unincorporated non-agricultural enterprises in 
the food processing sector, 25% are women. There 
is a concentration in the southern States of Andhra 
Pradesh (14%), Tamil Nadu (12%) and Telangana (10%), 
which together constitute 36% of all registered food 
processing factories in the country. Besides, there 
are food processing products approved under One 
District One Product which range from coconut-based 
products of the districts of Andaman & Nicobar Islands 
and spices of Andhra Pradesh to walnuts of Arunachal 
Pradesh and bakery products of Chandigarh.
Kurukshetra         January  2024 20
Table 2: No. of Startups recognised by DPIIT in the 
Food & Beverages Sector
2017 2018 2019 2020 2021
170 357 533 643 1,010
Source: https://pib.gov.in/Pressreleaseshare.
aspx?PRID=1881492
Since its launch in 2020, Self-Reliant Fund for 
MSMEs has provided equity support to growth-
oriented MSMEs, including startups. On an average, the 
Fund has provided Rs. 13 crore equity support to the 
beneficiary enterprises. Out of the 373 MSMEs, which 
have benefitted from equity infusion under SRI Fund 
in the past two years, 15 are from the food processing 
sector.
Meeting Challenges through Focused Attention 
The major challenges faced by a startup are 
the 4 ‘A’s, viz. Availability, Accessibility, Affordability, 
and Awareness regarding the three essentials of any 
business, viz. finance, technology, and markets. These 
challenges among startups in the food processing 
sector can be further nuanced as product development 
and innovation; a strengthened supply chain; linking 
production and processing; addressing issues related to 
seasonality; quality and safety standards; and reducing 
post-harvest wastage. 
The notification of a separate Ministry of Food 
Processing Industries in 2001 by the Government of 
India highlighted its focused intervention in this sunrise 
sector. The growing importance of the sector can also 
be gauged by the enhanced outlays, as evident from 
Budget of 2023–24. The Budget data indicates that 
while the actual expenditure of the Ministry of Food 
Processing Industries was Rs. 1,147 crore in 2021–22, 
the Revised Estimate for 2022–23 was pegged at  
Rs. 1,902 crore and the Budget Estimate for 2023–24 is 
Rs. 3,288 crore. 
A number of initiatives are being taken by the 
Government of India to address the challenges faced 
by the food processing sector, including those faced 
by startups. Among these are ‘Make in India’, which 
recognises this sector as a priority sector. Resting on 
the principle of reaping benefits from economies of 
scale, a cluster approach or a plug-and-play model 
From 2017 to 2021, there have been as 
many as 2,713 startups set up in the Food 
& Beverages sector, with the number 
enhanced every year (Table-2) as per 
a Press Release of the Department for 
Promotion of Industry and Internal Trade 
(DPIIT). In addition to this, there are 
1,000 agri-tech startups to aid farmers 
to improve their techniques and another 
500 working in the millet value chain 
(Economic Survey, 2022–23). Digital 
infrastructure supports the growth of the 
agri-tech startups, in particular. 
Startups: Growth Startups: Growth 
Facts and Figures Facts and Figures
Page 4


Kurukshetra         January  2024 18
Dr. Ishita G. Tripathy
he food processing sector of an 
economy is the quintessential example 
of mutually reinforcing primary and 
secondary sectors in terms of demand-
supply dynamics and forward and backward linkage 
effects. This sector is extremely vital for an agrarian 
country like India. It not only acts as an effective link 
between agriculture and industries but also helps 
in reducing wastages of perishable agricultural 
produce, ensuring value addition, and diversifying 
and commercialising agriculture, thereby generating 
incremental employment and income for farmers.
T
Socio-economic changes, such as rapid 
urbanisation, impact the food consumption behaviour 
of citizens. C onsumption diversity and dietary 
diversification needs with modified food behaviours 
prompt demand shifts towards specific food categories, 
requiring an overhaul in the food demand-supply 
system too. It is the startups that bring new ideas 
into the food sector and work on creating innovative 
products and reinvigorating supply chains. 
Importance of Food Processing Sector
Unquestionably, the food processing sector is one 
of the most important sectors of the Indian economy, 
The author is Additional Development Commissioner, Ministry of Micro, Small and Medium Enterprises. 
Email: igtripathy@gmail.com
Redefining Food Redefining Food 
Processing Sector Processing Sector 
through Startups through Startups
In the inaugural event of 
‘World Food India 2023’ held 
in New Delhi on 03 November 
2023, the Hon’ble Prime 
Minister of India referred to 
the food processing sector 
as a ‘Sunrise’ sector and 
underscored the role played 
by the entrepreneurial 
abilities of startups in its 
phenomenal growth. Startups 
in the food processing 
ecosystem are found at 
various stages of the value 
chain and together have the 
potential and dynamism to 
complete the value chain 
and lead to transformational 
changes in the economy.
19 Kurukshetra         January  2024
both in terms of its contribution to economic output 
and also in terms of overall economic growth. From 
2012–13 to 2020–21, the Gross Value added by the 
food processing industries at 2011–12 constant prices 
grew from Rs. 1.30 lakh crore to Rs. 2.37 lakh crore, as 
depicted in the Annual Report 2022–23 of the Ministry 
of Food Processing Industries. This sector is one of the 
fastest growing sectors in the country, having grown at 
10.3% during 2015–16 to 2020–21, vis-à-vis the growth 
rate of 5.1% in the overall manufacturing sector. This 
sector is also one of the sectors where consumer 
dynamism is highly palpable and easy to comprehend.
Startups: Sunrise and Inclusive Growth
The Union Budget 2023–24 stated that India 
has the third-largest ecosystem for startups, globally. 
India has the potential to become a global culinary 
hub and can combat global hunger. In the inaugural 
event of ‘World Food India 2023’ held in New Delhi on 
3 November 2023, the Hon’ble Prime Minister of India 
referred to the food processing sector as a ‘sunrise’ 
sector and underscored the tremendous inherent 
entrepreneurial potential of startups in the food sector. 
In this context, this article endeavours to evaluate the 
growth chart of the food processing sector in India 
and the enhanced contribution of startups to this  
growth story.
A study by NABARD Consultancy Service Pvt. Ltd. 
estimated in 2022 the percentage of harvest and post-
harvest loss of perishable food (Table-1). Tackling such 
losses, though challenging, is extremely important, 
considering the broader objective of food security for 
all. In this context, food processing startups need to be 
facilitated through specialised interventions that can 
ensure the presence of new research and development, 
technology, innovative processes, and products, and 
thereby enlarging the scope of an improved supply 
chain, value chain, and demand system in the food 
sector of the country. 
Table1: Estimated Loss of Perishable Commodities 
Perishable Commodities Estimated Loss (in %)
Fruits 6.02-15.05
Vegetables 4.87-11.61
Milk 0.87
Fisheries (Marine) 8.76
Fisheries (Inland) 4.86
Source: Rajya Sabha Starred Question No. 252 answered on  
11 August 2023. 
The role of women in food processing industrial 
startups has always been important. Out of more 
than 3.13 crore registered micro, small, and medium 
enterprises in the country, as many as 19 lakh are in 
the food processing sector, of which 33% are owned 
by women entrepreneurs. As per the Ministry of Food 
Processing Industries’ Annual Report, 2022–23, 11.18% 
of total 20.32 lakh registered employment is that of 
women workers and out of 51.11 lakh employees in 
the unincorporated non-agricultural enterprises in 
the food processing sector, 25% are women. There 
is a concentration in the southern States of Andhra 
Pradesh (14%), Tamil Nadu (12%) and Telangana (10%), 
which together constitute 36% of all registered food 
processing factories in the country. Besides, there 
are food processing products approved under One 
District One Product which range from coconut-based 
products of the districts of Andaman & Nicobar Islands 
and spices of Andhra Pradesh to walnuts of Arunachal 
Pradesh and bakery products of Chandigarh.
Kurukshetra         January  2024 20
Table 2: No. of Startups recognised by DPIIT in the 
Food & Beverages Sector
2017 2018 2019 2020 2021
170 357 533 643 1,010
Source: https://pib.gov.in/Pressreleaseshare.
aspx?PRID=1881492
Since its launch in 2020, Self-Reliant Fund for 
MSMEs has provided equity support to growth-
oriented MSMEs, including startups. On an average, the 
Fund has provided Rs. 13 crore equity support to the 
beneficiary enterprises. Out of the 373 MSMEs, which 
have benefitted from equity infusion under SRI Fund 
in the past two years, 15 are from the food processing 
sector.
Meeting Challenges through Focused Attention 
The major challenges faced by a startup are 
the 4 ‘A’s, viz. Availability, Accessibility, Affordability, 
and Awareness regarding the three essentials of any 
business, viz. finance, technology, and markets. These 
challenges among startups in the food processing 
sector can be further nuanced as product development 
and innovation; a strengthened supply chain; linking 
production and processing; addressing issues related to 
seasonality; quality and safety standards; and reducing 
post-harvest wastage. 
The notification of a separate Ministry of Food 
Processing Industries in 2001 by the Government of 
India highlighted its focused intervention in this sunrise 
sector. The growing importance of the sector can also 
be gauged by the enhanced outlays, as evident from 
Budget of 2023–24. The Budget data indicates that 
while the actual expenditure of the Ministry of Food 
Processing Industries was Rs. 1,147 crore in 2021–22, 
the Revised Estimate for 2022–23 was pegged at  
Rs. 1,902 crore and the Budget Estimate for 2023–24 is 
Rs. 3,288 crore. 
A number of initiatives are being taken by the 
Government of India to address the challenges faced 
by the food processing sector, including those faced 
by startups. Among these are ‘Make in India’, which 
recognises this sector as a priority sector. Resting on 
the principle of reaping benefits from economies of 
scale, a cluster approach or a plug-and-play model 
From 2017 to 2021, there have been as 
many as 2,713 startups set up in the Food 
& Beverages sector, with the number 
enhanced every year (Table-2) as per 
a Press Release of the Department for 
Promotion of Industry and Internal Trade 
(DPIIT). In addition to this, there are 
1,000 agri-tech startups to aid farmers 
to improve their techniques and another 
500 working in the millet value chain 
(Economic Survey, 2022–23). Digital 
infrastructure supports the growth of the 
agri-tech startups, in particular. 
Startups: Growth Startups: Growth 
Facts and Figures Facts and Figures
21 Kurukshetra         January  2024
on which mega food parks are based would work 
well for this sector. Recent initiatives also include 
implementation of schemes of the Government of India 
such as Pradhan Mantri Kisan Sampada Yojana, Prime 
Minister Formalisation of Micro Processing Enterprises, 
Production Linked Incentive, etc.
For startups in the food processing sector to 
flourish, backward linkages with agriculture, fisheries, 
dairying, animal husbandry, etc. need to be strong. 
This objective is strengthened by the Production Linked 
Incentive scheme, Agri-Infra Fund, etc. Like in all other 
sectors, the involvement of technology in the food 
processing sector, especially since the advent of the 
Covid pandemic in 2020, has been increasing. As one 
moves towards higher levels of technology, the need 
for investment rises, and, therefore, foreign direct 
investment (FDI) is attracted. In the last nine years, 
the food processing sector in the country has attracted  
Rs. 50,000 crore of FDI (PIB–5 November 2023). 
Promoting Startups
DPIIT recognises entities as startups as per 
the eligibility conditions mentioned in notification 
no. GSR 127(E) dated 19 February 2019, which 
defines a startup in terms of tenure, objectives, and 
turnover. To elaborate, an entity is considered to be 
a startup up to a period of ten years from the date 
of its incorporation or registration, depending upon 
whether it is a private limited company defined as per 
Companies Act, 2013; or a partnership firm registered 
under Section 59 of the Partnership Act, 1932; or a 
limited liability partnership under the Limited Liability 
Partnership Act, 2008. The entity should be working 
towards innovation, development, or improvement of 
products, or processes, or services, or if it is a scalable 
business model with a high potential for employment 
generation or wealth creation. The turnover of the 
entity for any of its financial years since incorporation 
or registration should not exceed Rs. 100 crore. The 
Government of India, vide its notification no. S.O.2119 
(E) dated 26.06.2020 defines Micro, Small and Medium 
Enterprises (MSMEs) in terms of both investment in 
plant & machinery or equipment and turnover. MSMEs 
registered on the official Udyam registration portal can 
be proprietorship, partnership, company, trust, society, 
etc. 
As evident from Table 3, if enterprises satisfy 
both conditions of investment in plant and machinery, 
or equipment and turnover, they can not only be 
categorised as ‘micro’, ‘small’, or ‘medium’, but also as 
startups, if their turnover is not more than Rs. 100 crore. 
Further if there is an upgradation in the classification of 
the enterprise, e.g. from micro to small or medium or 
large, from small to medium or large, or from medium to 
large, as per notification S.O.4926(E) dated 19 October 
2022, the enterprise can continue to avail of non-tax 
benefits under various schemes and programmes that 
it was eligible for under its previous category for three 
years from the date of such upward change. 
Table 3: Criteria for defining MSMEs
Category
Investment 
Not exceeding 
(Rs. crore)
Turnover Not 
Exceeding  
(Rs. crore)
Micro 1 5
Small 10 50
Medium 50 250
Source: Ministry of MSME’s notification No. S.O.2119 (E) dated 
26.06.2020
The startup initiative of the Government has been 
multi-pronged. It includes a Rs. 10,000 crore Fund of 
Funds, which aims at making capital available for startups 
at the early stage, seed stage, and growth stage. There 
is a separate Credit Guarantee Scheme for loans taken 
by startups. Central Ministries and Departments have 
been advised to relax the conditions of prior turnover 
and experience when procuring from startups. Besides, 
startups are eligible for fast-tracked patent application 
examination and disposal. The Startup India Online 
Hub connects all stakeholders on the same platform, 
viz., startups, investors, funds, mentors, academic 
Page 5


Kurukshetra         January  2024 18
Dr. Ishita G. Tripathy
he food processing sector of an 
economy is the quintessential example 
of mutually reinforcing primary and 
secondary sectors in terms of demand-
supply dynamics and forward and backward linkage 
effects. This sector is extremely vital for an agrarian 
country like India. It not only acts as an effective link 
between agriculture and industries but also helps 
in reducing wastages of perishable agricultural 
produce, ensuring value addition, and diversifying 
and commercialising agriculture, thereby generating 
incremental employment and income for farmers.
T
Socio-economic changes, such as rapid 
urbanisation, impact the food consumption behaviour 
of citizens. C onsumption diversity and dietary 
diversification needs with modified food behaviours 
prompt demand shifts towards specific food categories, 
requiring an overhaul in the food demand-supply 
system too. It is the startups that bring new ideas 
into the food sector and work on creating innovative 
products and reinvigorating supply chains. 
Importance of Food Processing Sector
Unquestionably, the food processing sector is one 
of the most important sectors of the Indian economy, 
The author is Additional Development Commissioner, Ministry of Micro, Small and Medium Enterprises. 
Email: igtripathy@gmail.com
Redefining Food Redefining Food 
Processing Sector Processing Sector 
through Startups through Startups
In the inaugural event of 
‘World Food India 2023’ held 
in New Delhi on 03 November 
2023, the Hon’ble Prime 
Minister of India referred to 
the food processing sector 
as a ‘Sunrise’ sector and 
underscored the role played 
by the entrepreneurial 
abilities of startups in its 
phenomenal growth. Startups 
in the food processing 
ecosystem are found at 
various stages of the value 
chain and together have the 
potential and dynamism to 
complete the value chain 
and lead to transformational 
changes in the economy.
19 Kurukshetra         January  2024
both in terms of its contribution to economic output 
and also in terms of overall economic growth. From 
2012–13 to 2020–21, the Gross Value added by the 
food processing industries at 2011–12 constant prices 
grew from Rs. 1.30 lakh crore to Rs. 2.37 lakh crore, as 
depicted in the Annual Report 2022–23 of the Ministry 
of Food Processing Industries. This sector is one of the 
fastest growing sectors in the country, having grown at 
10.3% during 2015–16 to 2020–21, vis-à-vis the growth 
rate of 5.1% in the overall manufacturing sector. This 
sector is also one of the sectors where consumer 
dynamism is highly palpable and easy to comprehend.
Startups: Sunrise and Inclusive Growth
The Union Budget 2023–24 stated that India 
has the third-largest ecosystem for startups, globally. 
India has the potential to become a global culinary 
hub and can combat global hunger. In the inaugural 
event of ‘World Food India 2023’ held in New Delhi on 
3 November 2023, the Hon’ble Prime Minister of India 
referred to the food processing sector as a ‘sunrise’ 
sector and underscored the tremendous inherent 
entrepreneurial potential of startups in the food sector. 
In this context, this article endeavours to evaluate the 
growth chart of the food processing sector in India 
and the enhanced contribution of startups to this  
growth story.
A study by NABARD Consultancy Service Pvt. Ltd. 
estimated in 2022 the percentage of harvest and post-
harvest loss of perishable food (Table-1). Tackling such 
losses, though challenging, is extremely important, 
considering the broader objective of food security for 
all. In this context, food processing startups need to be 
facilitated through specialised interventions that can 
ensure the presence of new research and development, 
technology, innovative processes, and products, and 
thereby enlarging the scope of an improved supply 
chain, value chain, and demand system in the food 
sector of the country. 
Table1: Estimated Loss of Perishable Commodities 
Perishable Commodities Estimated Loss (in %)
Fruits 6.02-15.05
Vegetables 4.87-11.61
Milk 0.87
Fisheries (Marine) 8.76
Fisheries (Inland) 4.86
Source: Rajya Sabha Starred Question No. 252 answered on  
11 August 2023. 
The role of women in food processing industrial 
startups has always been important. Out of more 
than 3.13 crore registered micro, small, and medium 
enterprises in the country, as many as 19 lakh are in 
the food processing sector, of which 33% are owned 
by women entrepreneurs. As per the Ministry of Food 
Processing Industries’ Annual Report, 2022–23, 11.18% 
of total 20.32 lakh registered employment is that of 
women workers and out of 51.11 lakh employees in 
the unincorporated non-agricultural enterprises in 
the food processing sector, 25% are women. There 
is a concentration in the southern States of Andhra 
Pradesh (14%), Tamil Nadu (12%) and Telangana (10%), 
which together constitute 36% of all registered food 
processing factories in the country. Besides, there 
are food processing products approved under One 
District One Product which range from coconut-based 
products of the districts of Andaman & Nicobar Islands 
and spices of Andhra Pradesh to walnuts of Arunachal 
Pradesh and bakery products of Chandigarh.
Kurukshetra         January  2024 20
Table 2: No. of Startups recognised by DPIIT in the 
Food & Beverages Sector
2017 2018 2019 2020 2021
170 357 533 643 1,010
Source: https://pib.gov.in/Pressreleaseshare.
aspx?PRID=1881492
Since its launch in 2020, Self-Reliant Fund for 
MSMEs has provided equity support to growth-
oriented MSMEs, including startups. On an average, the 
Fund has provided Rs. 13 crore equity support to the 
beneficiary enterprises. Out of the 373 MSMEs, which 
have benefitted from equity infusion under SRI Fund 
in the past two years, 15 are from the food processing 
sector.
Meeting Challenges through Focused Attention 
The major challenges faced by a startup are 
the 4 ‘A’s, viz. Availability, Accessibility, Affordability, 
and Awareness regarding the three essentials of any 
business, viz. finance, technology, and markets. These 
challenges among startups in the food processing 
sector can be further nuanced as product development 
and innovation; a strengthened supply chain; linking 
production and processing; addressing issues related to 
seasonality; quality and safety standards; and reducing 
post-harvest wastage. 
The notification of a separate Ministry of Food 
Processing Industries in 2001 by the Government of 
India highlighted its focused intervention in this sunrise 
sector. The growing importance of the sector can also 
be gauged by the enhanced outlays, as evident from 
Budget of 2023–24. The Budget data indicates that 
while the actual expenditure of the Ministry of Food 
Processing Industries was Rs. 1,147 crore in 2021–22, 
the Revised Estimate for 2022–23 was pegged at  
Rs. 1,902 crore and the Budget Estimate for 2023–24 is 
Rs. 3,288 crore. 
A number of initiatives are being taken by the 
Government of India to address the challenges faced 
by the food processing sector, including those faced 
by startups. Among these are ‘Make in India’, which 
recognises this sector as a priority sector. Resting on 
the principle of reaping benefits from economies of 
scale, a cluster approach or a plug-and-play model 
From 2017 to 2021, there have been as 
many as 2,713 startups set up in the Food 
& Beverages sector, with the number 
enhanced every year (Table-2) as per 
a Press Release of the Department for 
Promotion of Industry and Internal Trade 
(DPIIT). In addition to this, there are 
1,000 agri-tech startups to aid farmers 
to improve their techniques and another 
500 working in the millet value chain 
(Economic Survey, 2022–23). Digital 
infrastructure supports the growth of the 
agri-tech startups, in particular. 
Startups: Growth Startups: Growth 
Facts and Figures Facts and Figures
21 Kurukshetra         January  2024
on which mega food parks are based would work 
well for this sector. Recent initiatives also include 
implementation of schemes of the Government of India 
such as Pradhan Mantri Kisan Sampada Yojana, Prime 
Minister Formalisation of Micro Processing Enterprises, 
Production Linked Incentive, etc.
For startups in the food processing sector to 
flourish, backward linkages with agriculture, fisheries, 
dairying, animal husbandry, etc. need to be strong. 
This objective is strengthened by the Production Linked 
Incentive scheme, Agri-Infra Fund, etc. Like in all other 
sectors, the involvement of technology in the food 
processing sector, especially since the advent of the 
Covid pandemic in 2020, has been increasing. As one 
moves towards higher levels of technology, the need 
for investment rises, and, therefore, foreign direct 
investment (FDI) is attracted. In the last nine years, 
the food processing sector in the country has attracted  
Rs. 50,000 crore of FDI (PIB–5 November 2023). 
Promoting Startups
DPIIT recognises entities as startups as per 
the eligibility conditions mentioned in notification 
no. GSR 127(E) dated 19 February 2019, which 
defines a startup in terms of tenure, objectives, and 
turnover. To elaborate, an entity is considered to be 
a startup up to a period of ten years from the date 
of its incorporation or registration, depending upon 
whether it is a private limited company defined as per 
Companies Act, 2013; or a partnership firm registered 
under Section 59 of the Partnership Act, 1932; or a 
limited liability partnership under the Limited Liability 
Partnership Act, 2008. The entity should be working 
towards innovation, development, or improvement of 
products, or processes, or services, or if it is a scalable 
business model with a high potential for employment 
generation or wealth creation. The turnover of the 
entity for any of its financial years since incorporation 
or registration should not exceed Rs. 100 crore. The 
Government of India, vide its notification no. S.O.2119 
(E) dated 26.06.2020 defines Micro, Small and Medium 
Enterprises (MSMEs) in terms of both investment in 
plant & machinery or equipment and turnover. MSMEs 
registered on the official Udyam registration portal can 
be proprietorship, partnership, company, trust, society, 
etc. 
As evident from Table 3, if enterprises satisfy 
both conditions of investment in plant and machinery, 
or equipment and turnover, they can not only be 
categorised as ‘micro’, ‘small’, or ‘medium’, but also as 
startups, if their turnover is not more than Rs. 100 crore. 
Further if there is an upgradation in the classification of 
the enterprise, e.g. from micro to small or medium or 
large, from small to medium or large, or from medium to 
large, as per notification S.O.4926(E) dated 19 October 
2022, the enterprise can continue to avail of non-tax 
benefits under various schemes and programmes that 
it was eligible for under its previous category for three 
years from the date of such upward change. 
Table 3: Criteria for defining MSMEs
Category
Investment 
Not exceeding 
(Rs. crore)
Turnover Not 
Exceeding  
(Rs. crore)
Micro 1 5
Small 10 50
Medium 50 250
Source: Ministry of MSME’s notification No. S.O.2119 (E) dated 
26.06.2020
The startup initiative of the Government has been 
multi-pronged. It includes a Rs. 10,000 crore Fund of 
Funds, which aims at making capital available for startups 
at the early stage, seed stage, and growth stage. There 
is a separate Credit Guarantee Scheme for loans taken 
by startups. Central Ministries and Departments have 
been advised to relax the conditions of prior turnover 
and experience when procuring from startups. Besides, 
startups are eligible for fast-tracked patent application 
examination and disposal. The Startup India Online 
Hub connects all stakeholders on the same platform, 
viz., startups, investors, funds, mentors, academic 
Kurukshetra         January  2024 22
institutions, incubators, corporations, Government 
bodies, etc.
To promote startups, there is a 100% deduction 
allowed for their profits and gains for three consecutive 
years out of ten years. To tie over the adverse impact 
of the pandemic, Budget 2023–24 announced that the 
period of incorporation of eligible startups would be 
extended up to 31 March 2024 from 31 March 2023. 
For startups, there is a condition of continuity of at least 
51% share-holding for setting off of carried forward 
losses, which is relaxed for seven years for an eligible 
startup if all the share-holders of the company continue 
to hold those shares. Budget 2023-24 proposed to 
extend this benefit to ten years, instead of seven years 
from the incorporation of such startups. The Budget 
also announced the establishment of an Agriculture 
Accelerator Fund to encourage agri-startups, especially 
those by young entrepreneurs in rural areas. The 
objective of the fund would be to bring innovative and 
affordable solutions for challenges faced by farmers 
and to bring in modern technologies to transform 
agricultural practices, increase productivity, and 
enhance profitability. Further, the Budget proclaimed 
to promote research by startups by bringing in a 
National Data Governance Policy to enable access to 
anonymised data.
Linking Startups to Global Markets
The Central and State Governments promote 
export-oriented enterprises. The Central Government’s 
Agricultural and Processed Food Products Export 
Development Authority (APEDA) which was set up 
under the APEDA Act, 1985, is mandated, inter alia, 
to aid in the registration of exporters of scheduled 
products, provide financial assistance to them, 
fix standards and specifications for the scheduled 
products, carry out inspection, improve packaging and 
marketing of scheduled products, etc. Consequently, 
between 2014 and 2023, the share of processed foods 
in India’s exports has risen from 13% to 23%, with 
APEDA having linked importers with exporting startups. 
There is tremendous potential in the food processing 
sector to collaborate with other countries, as is evident 
from the recent high-level meetings held with countries 
like Brazil, wherein discussions were held to facilitate 
greater exchange of goods and ideas. This is also an 
affirmative step towards ensuring world food security.
Concluding Remarks 
Technological advances, changes in consumer 
demographics, and tastes and preferences have been 
pivotal in shaping the journey of startups in the food 
processing sector. Startups in the food processing 
ecosystem are found at various stages of the value 
chain and together have the potential and dynamism to 
complete the value chain and lead to transformational 
changes in the economy. The support required by them 
at different stages is obviously different. If the recent 
growth in this sector is to be taken as an indicator, then 
the contribution of this sector to the economy in the 
immediate future can be expected to be even more 
rapid.  ?
Sources
1. h ttp s: //pib. g o v .in/P r e ssR e le ase P ag e .
aspx?PRID=1974998 dated 5.11.2023.
2. h ttp s: //pib. g o v .in/P r e ssR e le ase P ag e .
aspx?PRID=1976726 dated 13.11.2023.
3. Annual Report 2022-23 of Ministry of Food 
Processing Industries.
4. Lok Sabha Starred Question No. 392 answered on 
29.03.2023.
5. https://www.mofpi.gov.in/sites/default/files/final_
revised_odop_list_of_713_districts_with_om.pdf