INTRODUCTION:

India is known as the second largest fruits and vegetables producer in the world followed by
China. India accounts for about 15 per cent of the world’s vegetable production. In the
production of many fruits and vegetables, India is either first or second. However, fruits and
vegetables being perishable in nature, get wasted to the tune of 20-30 per cent in the whole
supply chain due to poor post-harvest management. On the other hand, only 2 per cent of
fruits and vegetables are processed in to value added products and the rest is consumed as
fresh. Therefore, processing of fruits and vegetables offers immense scope for wastage
minimization and value addition; thus can generate significant income and employment in
Indian agrarian economy.

Fruits and vegetables are seasonal as well as perishable in nature. Dehydration of seasonal
fruits and vegetables are good bet for long term storage even up to 5 years or beyond.

Seasonal vegetable such as carrots, okra, drum stick, bitter guard, green peas, cauliflower,
cabbage, spinach, onion, sweet potato, mushroom, french bean and others; fruits such as
slices of date plum, pineapple, kiwi, plum, persimmon, jackfruit, apricots, nuts, peach,
mango, strawberry etc can be well preserved and made available at good prices during off
season through proven dehydration technology. Therefore, small to medium scale
integrated dehydration unit for fruits and vegetable can be established in potential clusters
across India.

As per DGCIS Annual report In 2022-23 India exported processed vegetable worth
4,98,732.57 lacs comparing to 2021 – 22 India exported processed vegetable worth 3,
98,645.32 lacs, 3, 71,862.96 lacs in 2020-21 & 2,76,053.17 lacs in 2019-20.

Indian agricultural/ horticultura l and processed foods are exported to more than 100
countries/regions; chief among them are the Middle East, Southeast Asia, SAARC countries,
the EU and the US.

However, India's total agriculture export basket accounts for little over 2% of world
agriculture trade and Agricultural exports' contribution to India's GDP is also as low as 2%.

The Government of India has accorded 'high priority' status to the food processing
industry. The Ministry of Food Processing Industries (MOFPI) has been set up as a nodal agency
for formulation and implementation of the policies and plans for the food processing
industries.
PRODUCTS & ITS APPLICATION:

1. Onion Flakes & Powder:

Onion is one of the essential ingredients in Indian cuisines. It is added to almost all of the
Non-vegetarian preparations and a few vegetarian dishes in Hyderabadi cuisine. It is mainly
used as a condiment in various food preparations. Additionally, it dominates the cooking
paste market. Onion is one of the primary cooking ingredients.

Onion important commercial crops cultivated throughout the country with major
production in the states of Madhya Pradesh (15.23%), Maharashtra (42.73%). Processing of
onion is undertaken to dehydrate it and for preparing Flakes & Powder. Onion has wide
applications in food processing as well as many other industries. A proper market survey has
to be conducted to find out demand potential for each industry segment.

Applications: Onion is mainly used as a condiment in various food preparations. As a

condiment, it is used for flavoring mayonnaise and Tomato Ketch - up sauce, Salads, meat
sausages, chutney, pickles, Birayani, Fried Rice etc.

2. Moringa leaf Powder:

Drumstick also known as Moringa Olifera scientifically is a unique vegetable that contains
many types of amino-acids, antioxidants, anti-inflammatory, anti-microbial compounds and
nutrients which make it one of the best nutritional supplements.

Moringa Oleifera, an Indian origin plant has gained its importance due to nutraceutical
values and is considered as indispensable plant for health management. It is an excellent
source of minerals like iron, calcium and vitamins A, B, B1, B2, B3, B6, C, E as well as macro
minerals, trace minerals and phytonutrients. This powder can be taken as a nutraceutical
supplement and as food additive. Moringa is used for anemia, arthritis and other joint pain
(rheumatism); asthma; cancer; constipation; diabetes; diarrhoea; epilepsy; stomach pain
and ulcers, intestinal ulcers; intestinal spasms; headache; heart problems; high blood
pressure; kidney stones; fluid retention; thyroid disorders; beneficial for lactating mothers
and bacterial, fungal, viral, and parasitic infections. This product owing to extraordinary
nutritional value is used for treating malnutrition.
 3. Green Chili:

Green Chili is one of the essential ingredients in Indian cuisines. It is added to almost all
Vegetarian & Non-vegetarian preparations. It is mainly used as a condiment in various food
preparations. Green Chili is one of the primary cooking ingredients.

Green Chili is important commercial crops cultivated throughout the country with major
production in the states of Madhya Pradesh (17.22%), Karnatka (23.86%). Processing of Chili
is undertaken to dehydrate it and for preparing Flakes & Powder. Chili has wide applications
in food processing industries.

4. Tomato Flakes & Powder:

Tomato is one of the essential ingredients in Indian cuisines. It is added to almost all
Vegetarian & Non-vegetarian preparations. It is mainly used in gravy of various food
preparations. Tomato is one of the primary cooking ingredients.

Tomato is important commercial crops cultivated throughout the country with major
production in the states of Madhya Pradesh (14.63%), Andhra Pradesh (10.92%). Processing
of Tomato is undertaken to dehydrate it and for preparing Flakes & Powder. Tomato has
wide applications in food processing industries.

5. Okara

Okara, Ladyfinger, popularly known as bhindi in India, is rich in nutrients. It is considered a good
source of carbohydrates, proteins, vitamins, enzymes, calcium, potassium and many other nutrients.
Okara is important commercial crops cultivated throughout the country with major
production in the states of Gujrat (15.89%), West Bengal (13.93 %), and Madhya Pradesh
(11.75%). Processing of Okara is undertaken to dehydrate it for preparing Flakes.
RAW MATERIAL AVAILABILITY

1. Fresh Onions

India is the second-largest onion-growing country in the world. The Indian onions are
famous for their pungency and are available round the year.

Indian onions have two crop cycles, first harvesting which starts from November to January
and the second harvesting from January to May.

The Major Onion producing states are Maharashtra, Karnataka, Madhya Pradesh, Gujarat,
Bihar, Andhra Pradesh, Rajasthan, Haryana and Telangana.

Maharashtra ranks first in Onion production with a share of 42.53% followed by Madhya
Pradesh with a share of 15.16% in 2021-22.

Mandsaur, Ratlam, Neemuch, Shajapur, Vidisha, Ujjain, Badnawar are the major producing
districts of M.P.
Lasangaon, Nasik is the largest mandi for onion in India.

2. Green Chili

The Indian green chilli is famous for their pungency and is available round the year.

Green chilli have two crop cycles, first harvesting which starts from November to January
and the second harvesting from January to April.

The Major Green Chilli producing states are Karnataka, Madhya Pradesh, Andhra Pradesh.

Karnataka ranks first in Onion production with a share of 23.86% followed by Madhya
Pradesh with a share of 17.22% in 2021-22.

Badwani, Khargone, Sanawad are the major producing districts of M.P.

Guntur & Bedia chilli mandi Khargone are the largest Mandi for Green chilli in India.
 3. Okara (lady finger)

India is the largest okara growing country in the world. The Indian Okara are famous for
available round the year.

Okara is harvested round the year in Gujrat, in M.P from January to March, in U.P April –
May, September - October

The Major Okara producing states are Gujrat, West Bengal, Bihar & Madhya Pradesh.

Gujrat ranks first in Okara production with a share of 15.89 % followed by West Bengal wit a
share of 13.93% & Madhya Pradesh with a share of 11.75 % in 2021-22.

4. Tomato

The Indian Tomato is famous for their taste and is available for 8 months in the year.

Tomato crop cycles is from September to April in India.

The Major Tomato producing states are Madhya Pradesh, Andhra Pradesh & Karnataka,.

Madhya Pradesh ranks first in Tomato production with a share of 14.63 % followed by
Andhra Pradesh with a share of 10.92 % & Karnataka with a share of 10.23 % in 2021-22.

Shivpuri, Ashoknagar, Sagar, Katni, Jabalpur, Dhar, shajapur are the major producing
districts of M.P.
 INDIAN FOOD PROCESSING SECTOR – MARKET & OPPORTUNITIES

India currently processes less than 10%¹ of its agri output (only around 2% of fruits and
vegetables, 6% of poultry, 21% of meat, 23% of marine and 35% of milk) and most of the
processing that is done in India can be classified as primary processing.

Besides being a large sourcing hub for agriculture produce, India has the advantage of a
large and growing market. Changing consumption patterns due to urbanization, changes in
the gender composition of work force, and growing consumption rates have contributed to the
increase in the size of processed food market.

With these forces in play, going forward the India market size for food isexpectedtoreachUS $535
billion in 2025-26⁷.

Further, more than two thirds of our 1.3 billion populations are young with growing incomes also
create a large market for food products. All these factors lead to growing consumption of food
which is expected to reach US $ 1.2 trillion by 2025-26.

India is the second largest producer of the Fruits and Vegetables in the world; however, the
processing levels in F&V currently stand at a low of 2%⁹. Thus, there is a huge opportunity in
harnessing the potential of processed fruits and vegetables in the form of frozen (IQF), canned,
pulp, puree, paste, sauces, snacks, dressings, flakes, dices, dehydration, pickles, juices,slices,
chips, jams,jelly, etc.

Organic packaged food witnessed a double-digit growth in retail volume and current value
sales in 2022.

Other food segments which are showing high growth include sauces, soups, noodles & pasta,
Chocolate confectionary, specialized cheese (Mozzarella, Cheddar and Parmesan), etc.

India has significantly improved its rank in World Bank's Ease of Doing Business Survey 2019,
and is ranked 77th, a leap of 23 ranks over last year ranking, among 190 countries assessed by the
World Bank.

As per DGCIS Annual report In 2022-23 India exported processed vegetable worth
4,98,732.57 lacs comparing to 2021 – 22 India exported processed vegetable worth 3,
98,645.32 lacs, 3, 71,862.96 lacs in 2020-21 & 2,76,053.17 lacs in 2019-20.

Indian agricultural/ horticultura l and processed foods are exported to more than 100
countries/regions; chief among them are the Middle East, Southeast Asia, SAARC countries,
the EU and the US.

However, India's total agriculture export basket accounts for little over 2% of world
agriculture trade and Agricultural exports' contribution to India's GDP is also as low as 2%.
The Government of India has accorded 'high priority' status to the food processing
industry. The Ministry of Food Processing Industries (MOFPI) has been set up as a nodal agency
for formulation and implementation of the policies and plans for the food processing
industries.

Processed Vegetables:

India is the major producer of Processed Vegetables like Onions, Cucumber & Gherkins,
Mushrooms of the Genus Agaricus, other Mushrooms and Truffles, Green Pepper, Dried
Truffles, Asparagus Dried, Dehydrated Garlic Powder, Dehydrated Garlic Flakes, Garlic Dried,
Potatoes Dried, Green Chili, Onion Prepared/Preserved etc.

Many non-traditional vegetables mainly processed cucumber and gherkins and other
vegetables produced like asparagus, celery, bell pepper, sweet corn, green and lime beans
and organically grown vegetables are also being increasingly exported.

India is also a prominent exporter of Processed Vegetables to the world. The country has
exported 410,415.99 MT of Processed Vegetables to the world for the worth of Rs. 4,987.36
Crores/ 620.09 USD Millions during the year 2022-23.

Fruits and vegetables

China, India, Brazil, USA, Italy, Spain, Mexico, Iranthe PhilippinesandFrancearethetopten

aggregate fruit producers in the world.

For vegetables China and India ranking as 1st and 2nd account for nearly 60% of global
production.

India is the second largest producer of the Fruits and Vegetables in the world with a
production of 311.7 million tons.

According to APEDA data,India is the largest producer of ginger and okra amongst
vegetables and ranks second in production of potatoes, onions, cauliflowers, brinjal,
Cabbages, etc. Amongst fruits, the country ranks first in production of Bananas (25.7%),
Papayas (43.6%) and Mangoes (40.4%). The production volumes for major fruits &
vegetables are
Major producing States

Maharashtra, Madhya Pradesh, Andhra Pradesh, Uttar Pradesh, Gujarat, and Karnataka are
the leading producers of fruits in India, having a combined share of around 51% in the
total fruits production. For vegetables, major producers include West Bengal, Uttar
Pradesh, Bihar, Madhya Pradesh, and Gujarat, together accounting for around 55% of the
national production.

Maharashtra ranks first in Onion production with a share of 42.53% followed by Madhya
Pradesh with a share of 15.16% in 2021-22.

The Major Green Chilli producing states are Karnataka, Madhya Pradesh, Andhra Pradesh.
Karnataka ranks first in Onion production with a share of 23.86% followed by Madhya
Pradesh with a share of 17.22% in 2021-22.

The Major Okara producing states are Gujrat, West Bengal, Bihar & Madhya Pradesh.
Gujrat ranks first in Okara production with a share of 15.89 % followed by West Bengal wit a
share of 13.93% & Madhya Pradesh with a share of 11.75 % in 2021-22.

The Major Tomato producing states are Madhya Pradesh, Andhra Pradesh & Karnataka,.
Madhya Pradesh ranks first in Tomato production with a share of 14.63 % followed by
Andhra Pradesh with a share of 10.92 % & Karnataka with a share of 10.23 % in 2021-22.
EXPORTS:

The Indian food processing industry is primarily export oriented. India's geographical
situation gives it the unique advantage of connectivity to Europe, the Middle East, Japan,
Singapore, Thailand, Malaysia and Korea. One such example indicating India's location
advantage is the value of trade in agriculture and processed food between India and the
Gulf region.

India's exports of Processed Food was Rs. 59,580.72 Crores/ 7,408.64 USD Millions in 2022-
23, which including the share of products like Mango Pulp (Rs. 1189.66 Crores/ 147.60 USD
Millions), Processed Vegetables (Rs. 4987.36 Crores/ 620.09 USD Millions), Cucumber and
Gherkins( Prepd. & Presvd) (Rs. 1761.10 Crores/ 218.74 USD Millions), Processed Fruits,
Juices & Nuts (Rs. 4754.83 Crores/ 590.21 USD Millions) Pulses (Rs. 5397.86 Crores/ 672.31
USD Millions), Groundnuts (Rs. 6735.25 Crores/ 831.60 USD Millions), Guargum (Rs. 4944.60
Crores/ 617.14 USD Millions), Jaggery & Confectionary (Rs. 4330.07 Crores/ 537.01 USD
Millions), Cocoa Products (Rs. 1242.13 Crores/ 154.54 USD Millions), Cereal Preparations
(Rs. 6051.60 Crores/ 752.13 USD Millions), Alcoholic Beverages (Rs. 2546.44 Crores/ 316.24
USD Millions), Miscellaneous Preparations (Rs. 8889.18 Crores/ 1106.42 USD Millions),
Milled Products (Rs. 2223.94 Crores/ 282.31USD Millions), Prepared Animal Feeder (Rs.
3587.04 Crores/ 445.60 USD Millions) and Other Oil Cake/Solid Resdus (Rs. 939.66 Crores/
116.70 USD Millions).

The major destinations for Indian fruits and vegetables are Bangladesh, UAE,Netherland, Nepal,
Malaysia, UK, Sri Lanka, Oman and Qatar.

India witnesses nearly 4.58 – 15.88 % wastage in fruits and vegetables annually, due to lack of
modern harvesting practices and inadequate cold chain infrastructure. Further the
processing levels in F&V currently stand at a low of 2%.

Opportunity therefore lies in investing ininitiativesthathelpreducewastage l e v e l s i n c l u d i n g

a d e q u a t e infrastructure (cold chain, processing infrastructure), R&D for processed food&
packaging,innovativeon farm preservation systems and skill development.

Further India's share in the global market is still nearly 1% only, however, there is
increasing acceptance of horticulture produce from the country due to concurrent
developments in the areas of state-of-the-art cold chain infrastructure and quality
assurance measures.
PROPOSED MAKKETING PLAN

The unit proposes to market its products in following manner.

1. To Direct End users like companies engaged in manufacturing & marketing of Ready
to eat Products, manufacturer of sauce, soups, namkeen, Cereals, wafers, companies
engaged in health products etc.

2. To exporters engaged in exporting processed vegetables.

3. To restaurant’s, large canteens.

4. To large stores like Wallmart, Reliance, Big bazar etc.

5. Through on line marketing platforms like India mart, Amazon, Flipkart & many more
operating in industry.

PROPOSED PROCUREMENT OF RAW MATERIAL

1. Direct from Mandies in state of Madhya Pradesh & surrounding 300Km Area.

2. Contract farming direct with farmers.

3. Direct procurement for farmers.

4. Moringa leaf cultivation in own farms & farms taken on lease.

POSSIBLE DIVERSIFICATIONS:

With the available plant and machinery & infrastructure, dehydration of many fruits and
vegetable can be done. Ginger , Garlic are two other products whose raw material is easily
available in the area.
GROTH DRIVERS:

PM formulization of Micro food processing enterprise scheme (PMFME scheme)

The scheme envisages an outlay of Rs. 10,000 crore over a period of 5 years from 2020-21 to
2024.25. The expenditure under the scheme would be shared in 60:40 ratio between central
& state government.

Under the scheme, 2,00,000 micro food processing will be directly assisted with credit
linked subsidy.

Attracting investments

100% FDI is permitted under the automatic route in Food processing industries.

100% FDI is permitted in Manufacture of food products and for trading (including through e-
commerce) for food products manufactured and/ or processed in India.

Enabling sourcing

In tandem with policies enabling the food processing sector, several progressive
marketing reforms and schemes have also been launched for agriculture products, which
allow for better sourcing opportunities for food processing industries.

Th e Ag r i c u lt u ra l P ro d u ce a n d Livestock Marketing (Promotion and Facilitation) [APLM]Act

2017,allowsfor clauses such as allowing single licenses for traders and de-listing
perishables from the ambit of the APMC s , b o th of w h ic h w i l l be significant enablers
for better sourcingfor foodprocessing.However, the uptake of the Act among states needs to
be fast-tracked.

The electronic National Agriculture Market (e-NAM) portal was launched in 2016 with the
vision of a single agriculture market. The portal currently connects 585 mandis across 16
states and 2 UTs;forming the largest integrated virtual agriculture market in the world.

Boosting exports

Towards boosting agri exports from India, Agricultural Export Policy, 2018 has been
formulated with a focused plan to boost India's agricultural exports to USD 70 billion by 2025.
Strategic focus under the policy includes, policy measures, infrastructure and logistics.
FISCAL INCENTIVES:

As a part of the policy support, to promote investments, the food processing units and
supportive infrastructure are offered attractive tax incentives

Goods and Service Tax (GST)

As per the latest revision in the GST rates, of the all food categories taken together under
different chapter heads/sub- heads, 36% of the food items have been exempted from GST
(0%) and 37% of the food items shall attractGST of 5%.Hence, almost 73% of the food items are
under lowest tax slab of 0% or 5%. These items constitute bulk of raw material that goes into
further value addition. Hence cost of production of processed item is expected to fall.

Only 17% of the total food items under different chapter heads/ sub-heads fall underGSTslab
of12%.Similarly,8%ofthe total food items under different chapter heads/sub-heads fall under
GST slab of 18%.

According to theindustry,a rationalization of GST rate structure in case of the food processing
sector to 5 % for p e r i sh a b le fo o d i te ms an d 1 2 % for non-perishable food items, would
further help to boost the potential of food processing in India.

Income tax

Business of processing, preservation and packagingoffruitsorvegetablesormeat and meat

products or poultry or marine or dairy products or from the integrated business of
handling, storage and transportation of food grains: 100% deduction of the profits
and gains derived from such industrial undertaking for five assessment years.

Subsidy & other incentives.

1. By Ministry of food processing under PMFME scheme.

a. Credit linked capital subsidy @ 35% of eligible project cost with maximum celing
of 10 lacs.

b. Special focus on SC/ST, Women, aspirational districts, FPO, SHG etc.

c. Interest subvention of 2% under the interest subvention scheme.

d. Credits guarantee coverage under CGTMSE scheme for colletral free loan upto rs.
2 Crore.
 2. By Govt. of M.P for Food processing unit.

a. Capita subsidy @25% with maximum celing of Rs. 2.50 Crore by State Hotriculture
department.

3. Under MPMSME incentive scheme 2021.

a. Industry development grant @40% of eligible investment in plant 7 machinery,

Building. Disbursed in 4 years, annual installment @ 10% per year for 4 years.

b. Additional grant @ 2% for SC/ST and women entrepreneur.

Advantage Madhya Pradesh:

1. Availability of Raw material: the main raw material is Onion, Green Chili, Tomato &
Moringa leaf. As per National Hotriculture Board report in 2021-22, M.P is largest
producer of Tomato (2970 T), second largest Producing state of Green Chilli
(726.90T), Onion (4760.60 T)

M.P have surplus production after consumption & post-harvest losses Onion 2.31
Million MT, Red Chili 0.11 Million MT, Tomato 1.96 Million MT.

2. Capital Investment Subsidy: 25% with maximum celing of 2.5 Cr. By Department of
Horticulture.

3. Capital subsidy @ 40% under MPMSME scheme 2021.

4. Power subsidy: Rs. 1 per unit for 5 Years.

5. Mandi fee Exemption: Exemption in mandi fee for purchase of raw material.

6. Power availability: Supllus availability of power 24x365.

7. Other incentive as per M.P Industrial policy.

CONCLUSIONS:

India's high production levels of agriculture and allied segments along with low
processing current processing rates, represents huge untapped opportunities for all
players of the food processing chain. Backed by progressive policies, fiscal incentives
and an enabling regulatory environment, the Indian market size for food is expected to grow.

India is witness ing a major shift in consumption pattern towards convenience food,
which can be seen from the fact that apart from oils and fats convenience food items ready
meals, rice, pasta & noodles and savory snacks have been registering impressive sales
growth.

The Consumers today are more conscious than ever about making responsible food choices,
and are paying more attention to attributes like smells, tastes and other sensory
experiences. Packaging and labelling are emerging as a key product differentiation strategy.
Sustainable sourcing has become a pre-requisite all along the food value chain and companies
today are increasingly being e v a l u a t e d o n t h e i r s u p p l y c h a i n responsibility.

With emergence of e-commerce, the food retail segment is further evolving. Online grocery
while is at a nascent stage at present owing to the fragmented and unorganized nature of the
Indian market is expected to grow to $17.39 billion by 2022 due to fast- paced urbanization,
changing customer lifestyle and tech-savvy demographic changes.

Thus, going forward the demand for processed food in India is expected to be directed by
consumer preference of convenience, nutritional value, brand- consciousness and
awareness regarding sustainable production.
MANUFACTURING PROCESS:

Vegetable Dehydration:
Dehydration is one of the easiest processing and preservation techniques of
agricultural commodities. Dehydration basically removes moistures through heat. The
traditional drying process involves sun drying; however, it leads to inferior product
quality. Therefore, mechanical drying through electricity/solar power offers better
quality and price realization. Though different fruits and vegetables require different
temperature; the optimum temperature is 70° C as higher temperatures may ‘case
harden’. The product is usually dried up to 15 per cent moisture level. The general
process flow chart for dehydrated fruits and vegetables is given below:

CLEANING

PEELING

SLICING

PRE TREATMENT (BLANCHING)

DRYING

GRINDING

PACKAGING

STORING

DESPATCH TO MARKET
Basic Project Assumptions

Working days per year : 300 days.

Working days per year : 300 days.

Working hours per day : 10

Interest on capital investment : 12%

Repayment period : 5 Years

Utilization of capacity : 1st year 70% in 2nd year, 80% in 3rd year and 90%

Water content & Drying Time

Product Water content Blanching Drying Time Final recovery

in % In Minute In Hrs In %

Green Chilli 89% 2 3-4 Hrs 16%

Onion 88% 1 3-4 Hrs 15%

Okara 86% 4-5 3-4 Hrs 16%

Tomato 94% 1 4-5 Hrs 6%

Moringa leaf 89% 2 2-3 Hrs 14%