HOW TO SET UP A FOOD INDUSTRY IN INDIA | HOW TO START A FOOD PRODUCT BUSINESS IN INDIA

INTRODUCTION 

Indians are known for their diverse culture in food, having 29 states, each represented by a different set of specialty foods. Making the Food Processing Sector in India occupy the fifth largest share in the world and which also contributes around 65 % of retail market in India. Food Processing is a combination of various procedures, methods, and operations by which unprocessed foodstuffs are transformed into food that are perfect for human consumption, cooking, and storage. It also includes techniques such as food preservation, packaging, storage, etc. India has the potential to become the biggest food producer and occupy a prime position in the agricultural sector. It is also ranked 5th in terms of production, consumption, export, and expected growth. The large disposable income in the hands of people, the food sector has witnessed a shift in the trend in the food consumption pattern. Increasing incomes are always accompanied by a change in the food basket. India being the fastest developing country it becomes one of the primary reasons to invest in the Food Processing Industry. Other reasons that induce investment in this sector are a continuous source of raw material, change from traditional methods of farming of food grains to horticulture, Low production cost, change in consumption patterns, India’s huge population, the establishment of food parks, and fiscal incentives.

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FACTORS AFFECTING THE GROWTH OF FOOD SECTOR IN INDIA

The following factors give India an edge in the world for occupying a prime position in the food industry.

1. With 151 million hectares of arable land, India ranks second in the world. It is the world’s largest irrigated region, covering 55 million hectares. It also has a diverse range of agroclimatic zones across the region, as well as the ability to cultivate a wide range of agricultural products. These advantages can be used to help India become a major global food supplier.

2. India has a large pool of skilled manpower in research and extension, in addition to cheap labour. The food processing industry employs 13 million people and generates 2.4 times as much indirect jobs as it does direct employment. Food processing has expanded at a rate of 7.1 percent per year over the last decade. India’s workforce, which is cheaper in relation to other countries effectively used to set up large low-cost production offices for Indian and foreign markets.

3. Many corporations have entered the food processing industry because of the vast opportunities available. Also, multinational corporations are diversifying their product offerings. Health and convenient foods are being added to Nestle, HUL, and ITC’s product portfolios. With Agri-produce and retail food ventures, Reliance and Bharti have also joined the food processing segments.

4. With low penetration levels and a relaxed regulatory regime, India poses a major untapped potential for the food-processing industry. Food processing is being hailed as India’s “sunrise industry,” with enormous potential for boosting the agricultural economy, establishing large-scale processed food manufacturing and food chain facilities, and thus creating more jobs.

5. In developing countries, the idea of a typical food street has taken on a new significance, with food streets becoming new tourist attractions. Food streets in major tourist destinations are almost always lined with exotic local foods. Because of its affordability and accessibility, street food has always been popular in India. This is a region with a lot of potential for increased revenue for vendors and for boosting the tourism industry. This might lead to a rise in the popularity of local food traditions, such as fast food, which is extremely common among Indians.

The below facts help prove the growth of the Indian food sector

• In the 2019-2020 fiscal year, India produced approximately 296.65 million tonnes of horticulture food grains.

• In 2018-19, milk production amounting 187.7 million tonnes, and egg production amounting to 103.3 billion dollars.

• Total fish production in 2018-19 was 13.75 MMT.

• The Food Grocery and Food Services markets dominate the Food Retail industry.

• During the 2019-20 fiscal year, India exported around 12,89,651 MT of seafood which is worth $6.68 billion.

HOW TO SET UP A FOOD INDUSTRY IN INDIA 

The Food Safety and Standards (Licensing and Registration of Food Businesses) Regulation, 2011 governs the FSSAI registration/license. The FSSA License and the FSSAI Registration are two forms of registrations recognized by these Regulations, both of which are required by organizations based on their size. FSSAI registration/license is mandatory for all businesses operating in the food sector. It includes a 14-digit number (which the registered entities must quote at the appropriate places). FSSAI registration ensures that food products are subjected to quality controls in order to eliminate instances of adulteration, substandard products and enhance producer transparency.

Following are the basic difference between the License and the registration –

FSSAI REGISTRATION

FSSAI Registration is required to be done by operators involved in petty food businesses. As per the Regulations, petty food business includes an operator who-

  • Is a petty trader, hawker, itinerant vendor, or temporary stallholder who manufactures or sells any food item.
  • Except for a caterer, distributes food at religious or social gatherings.
  • Has food businesses, such as small scale or cottage or other food-related industries or tiny food businesses, with an annual turnover of not more than Rs 12 lakhs and whose:
  • Food production capability (excluding milk and milk products, as well as meat and meat products) does not exceed 100 kg/lt per day.
  • Procurement, handling, and collection of milk is not more than 500 liters of milk per day.
  • Slaughtering capability is limited to two large animals, ten small animals, or 50 poultry birds per day.

FSSAI LICENSE

Those entities that do not fit within the definition of a petty business are entitled to get the FSSAI License before the beginning of the business operations. Based on the size and nature of the business, the FSSAI license is of two types, State FSSAI License and Central FSSAI License.

While the Large food manufacturer/processors/transporters and importers of food products require a central FSSAI license, a state FSSAL license is required for medium-sized food manufacturers, processors and transporters.

APPLICATION PROCEDURE

1. FSSAI Registration –

  • The applicant has to submit Form A with the Authority
  • Within 7 days of the submission, the applicant is informed, in writing, about the acceptance/rejection of the application.

Documents required –

  • Photograph of a Food Company Owner
  • Voter ID Card, PAN Card, Driver’s License, Passport, Aadhar Card, Ration Card, Department Issued ID, Senior Citizen Card are all examples of identity proof documents.

2. FSSAI License –

  • The applicant has to submit online Form B with the appropriate Authority depending upon the size of the entity
  • Self-attested documents and affidavits along with the applicable fees have to be submitted to the Authority

DOCUMENTS REQUIRED-

• Company Premises Rental Agreement

• Aadhaar Card / Driving License / Passport / Voter ID or any other documents of the person seeking License. 

• If one has any government registration certificates (Company Incorporation Certificate/Firm Registration/Partnership Deed/Pan Card/GST Registration Number/Shop and Establishment Registration/Trade License), the same should be included.

• Certificate with the IE Code (Import Export Code). (IE code is required for the export and import categories)

• The concerned individual receives an authority letter from the company letterhead indicating that he is allowed to file an FSSAI application.

• A compilation of food categories that must be generated (In the case of manufacturers).

• Photographs of the premises

• List of directors, proprietors and or partners

• FMS Plan

• Recall plan

• List of equipments used at the premises

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The FSSAI license remains valid for a period of 1 to 5 years and can be renewed thereafter by making an application at least 7 days before the expiry of the License.

CONCLUSION 

In terms of forms, variety, efficiency, and presentation of goods, India’s food-processing industry has changed dramatically in recent years, owing largely to the liberalization that has resulted in foreign direct investment (FDI) in the processed food market. The expansion of the food processing industry has sparked a surge in demand for high-quality food ingredients in order to manufacture high-quality processed and packaged foods. Because of the changing lifestyles of middle-class customers, the ready-to-eat food market is booming (both partners working, etc.). As a result, the number of fast-food restaurants is growing. Diet, organic, low-calorie, and non-fat food items have created a niche market as a result of the recent movement toward a healthier lifestyle. Indians are renowned for their rich culinary culture, with each state representing a unique selection of specialty foods. Making India’s Food Processing Sector the fifth largest in the world, it also accounts for about 65 percent of the country’s retail industry. Because of the many opportunities available, several companies have joined the food processing industry. In addition, multinational corporations are expanding their product lines. Nestle, HUL, and ITC are expanding their product portfolios to include healthier and more convenient foods. As a result, the food industry in India is a very appealing market. It has the ability to increase the number of work openings. The food industry is regulated by the Food Safety and Standard Authority Regulations, 2011. These Regulations recognize two types of registrations: the FSSA License and the FSSAI Registration, both of which are required by organizations based on their size. All food-related businesses must register with the FSSAI and obtain a license.

For more information, please contact us on info@trijuris.com or call us Mb. No. 85100 58386 or 9310 717274.