‘South India carries the potential to become a $200 billion export hub by 2030’
South India, which leads the Indian food processing industry with the highest concentration of registered factories, has the potential to evolve into a $200 billion export hub for processed foods by 2030, significantly boosting employment and the region’s economy, according to industry experts.
In FY24, India’s agricultural exports, including processed foods, amounted to $48.9 billion, with the share of processed food exports rising to 25.6 per cent in FY22-23 from 13.7 per cent in FY14-15. However, India’s total agricultural export basket represents just over 2 per cent of global agricultural trade.
“The food processing sector in South India exemplifies the Atmanirbhar Bharat initiative, relying entirely on locally grown produce. From cultivation to processing and consumption, every activity occurs within the country.
With targeted interventions, the southern region could emerge as a global leader in processed food exports,” said Ravichandran Purushothaman, Chairman of the CII National Council for Cold Chain and Agri Logistics and President of Danfoss India. He shared these insights during a discussion with select journalists on a report prepared by Danfoss and CII, focusing on the potential of Southern States in the food processing sector.
Technology is highlighted as a key driver for growth in the food processing sector. The report emphasizes the importance of robotics and data in modernizing food processing, including tracking details of what is grown, where, and when—a critical gap the Indian government’s agricultural digitization strategy, with a budget of ₹150,000 crores, aims to address.
Leveraging technology presents an opportunity to reduce wastage and enhance value addition.
Many of India’s agricultural commodities have significant potential for value addition. For example, despite fluctuations in tomato prices, technology now allows for the production of tomato puree that maintains the flavour of fresh tomatoes. As consumption patterns shift, the demand for such value-added products is expected to grow.
The report also stresses the need for supportive public policies and the promotion of startups, particularly given the labour challenges in the industry. Innovative technologies are essential for improving efficiency in food production.
For example, a Chennai-based startup uses vertical farming with controlled atmosphere techniques to produce strawberries. Currently, India imports 350 tonnes of strawberries daily at prices ranging from 20 to 40 euros per kilo, but this startup can produce them at a much lower cost—5 to 6 euros per kilo.
Labourers, who are often reluctant to work in traditional farms, are more inclined to work in controlled environments like vertical farms. This not only provides a more comfortable working environment but also uses technology to reduce wastage and increase value capture.
The real challenge lies not in funding but in addressing infrastructure gaps, particularly in reverse logistics. India’s fragmented supply chain hinders the seamless movement of products from production centres to consumption hubs. For instance, if bananas from Theni could reach Delhi in two days, farmers could earn ₹40-80 per kilo.
However, the lack of reverse logistics—such as empty trucks returning without cargo—reduces revenue potential.
The report also calls for stronger government policy support, especially in skill development. Tamil Nadu’s dairy industry, for instance, has seen significant breakthroughs due to farmers acquiring the skills to maximize yield. However, the state lags in technology-related areas like grading, sorting, and packing for products such as bananas.
The government should incentivize these activities and collaborate closely with agricultural universities. Purushothaman also emphasized the need for greater awareness of government subsidies.
To better coordinate efforts across states, he suggested that the food processing sector in Southern India could benefit from an organization similar to the GST Council.