India’s Food Industry offers immense Opportunities for Polish Companies

India’s processed food market is on an upswing. A country, where traditionally processed food was not preferred, is now witnessing a major shift in food consumption. A fast-paced lifestyle, increased participation of women in the workforce, and growing popularity of nuclear families is resulting in increased demand for processed and packaged food. The homebound culture during the lockdowns has resulted in the growing popularity of cooking and consuming food at home. 

The current market size of processed food in India is around USD 94.5 billion, comprising 31% of the total food retail. Out of this food comprises around USD 69.5 billion, while beverages consist of around USD 16 billion. Other categories such as superfood, immunity-boosting foods, and gourmand are also slowly but gradually becoming popular.  

High Potential Market

Indian processed food market is still small when compared to other major economies such as the USA, China, and the EU. Only 2% of Indian fruits & vegetables are processed. Likewise, 21% of meat products and 35% of dairy products are processed. In contrast, around 60% of Chinese food items are processed. 

However, India is a high potential market for food companies, technology providers, and food packaging companies backed by high production of food and low present capacity of food processing. India is home to around 500 million livestock, one of the highest in the world. It contributes 17% of the global dairy production, whereas the country features amongst the top 5 producers of the numerous important key categories such as spices, tea, pulses, cereals, etc. 

Governing agencies are also committed to enabling India to effectively harness its high domestic production by increasing food processing capabilities.  

Tremendous Potential for Polish Food Companies 

Poland is one of the preferred business partners of India in Central Europe. The Indian investments in Poland are roughly pegged at around USD 3 billion. Likewise, India is also amongst the most preferred non-European emerging markets for Polish companies looking to invest. India’s vast domestic market, a large population of the skilled and semi-skilled workforce, and improved business climate are drawing Polish attention. Increasingly, the Polish business community looks at India as an alternative to China. 

Already there have been notable Polish FDI investments in India in AI, fintech, metal packaging, sustainable technologies. However, the scope of India- Polish business engagement is much higher. Out of the numerous potential areas, investing in the Indian food and food technology industry can offer some attractive opportunities to Polish companies. India is a high-potential food market and Poland has proven expertise and technology know-how in the sector, thereby creating a natural fit. 

The Polish food industry is one of the iron pillars of the economy, giving employment to 10.5% of the Polish workforce, as per the data revealed by the government. Plenty of indigenous food production coupled with a long history of processing has resulted in a vibrant food industry. Besides international companies’ numerous domestic food companies have also emerged in recent years, specializing in a host of categories such as juices, pasta & cereals,  alcoholic beverages, ice creams, chocolate, etc. The food industry in Poland is not just limited to food processing but also includes processing machinery, refrigeration technology, appliances & utensil manufacturers, IT & systems, quality control technologies. 

Advantages of Setting-up in India

Food is a priority sector for the Indian government. A robust food processing industry will be instrumental in improving farmers’ income, boosting the agrarian economy, rationalizing food wastages. Consequently, GOI has introduced favorable & progressive policies.  

 

How Polish Food Companies Can Enter India? 

There are multiple ways Polish companies can enter India. 

• They can directly export their food products to India. 
• They can form wholly-owned subsidiaries in India. 
• They can ink JVs with indigenous companies. 
• They can financially invest in Indian food manufacturers. 

 

How India Watch Can Help? 

India’s processed food industry is in its early stages but is on an upswing stemmed by attractive demography, change in consumer behavior, and surge in disposable income. The industry is attracting FDIs from numerous parts of the world. In FY 20, the total FDI in the food industry amounted to USD 904 million, moving up by 44% compared to the previous year. 

Naturally, Poland which has a host of successful food companies is now eying India, lured by its long-term growth potential. However, to win in the Indian market will also require access to valuable knowledge, actionable insights, and know-how of the nuances of its business ecosystem. Here we can come as a business research and consulting company, helping Polish and other international food companies to enter and scale up in India. 

 

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