How to Set-Up A Food Processing Unit in India?
India is a nation that, through its agricultural produce, produces much of its income and is known to have an agrarian economy. India has a rich history of organic farming and manufacturing, where many families keep the tradition of agriculture, rendering it the sixth largest nation in the fruit and food industry and the fifth largest retail market worldwide. The food processing industry in itself is, in general, a developing space and is seen in the near future as the likely leading industry.
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What is Food Processing Unit?
Both the processes and procedures used in transforming a raw material or a mixture of raw materials into a consumable commodity for human use are used in food processing. Practices such as agriculture, horticulture, planting, animal husbandry and fishing require food processing units. It also encompasses all other sectors that make use of agricultural inputs to manufacture edible items.
A place of investment and income has been this production sector. It is projected that the net value of the packaged food industry is around Rs.110 billion and is steadily accelerating at a rate of 10-15% per annum.
Benefits of Setting Up a Food Processing Unit in India
- In India, owing to the increased demand by the bulk of the urban middle-class population, this is a prospective industry.
- Raw material supply is abundant
- Shift in habits of use
- Comparatively low manufacturing costs
- Attractive fiscal benefits that make it the best option for India.
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How to Start a Food Processing Unit in India?
Many policies and schemes have been established by the Indian government to help set up food processing units in India and to provide them with financial support to modernize the industry. A FSSAI license is required in order to start any food-related company. There are various categories of FSSAI licenses available and they vary according to the form of business. In order to lawfully safeguard the company, however, there are certain protocols to be followed, such as:
- Business research and market analysis
The most important aspect of launching every company is knowing the demand and deciding the commodity to be made. The investor must bear in mind the viability of the product on the market when selecting the product.
Research into the economic and industrial results of the existing food processing industries is also significant, which would be helpful in assessing the size of the market, competitors and their patterns.
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- Factory location
It is advisable to identify a place that has resources that are feasible and readily accessible, such as manpower, raw materials, electricity sources, transport facilities, etc.
By analysing these variables along with the availability of raw materials in a certain location, an ideal location can be derived.
In order to maintain good produce throughout the year, the perishable character of food and duration must be taken into account.
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- Funding
Once the market expands, each corporation has to be supported to get in the products to sustain the supply chain. The funds often appear to differ according to the industry’s scale and design. So it is important to have shareholders and to find a steady source of the company’s financing.
- Legal implications
When a corporation is formed, it must be licensed with the competent authority before the organization is put in motion. In order to get licensed as a company in India, the Companies Act 2013 states that companies must be registered by sending certain documentation and required forms.
The government announced in 2018 that it would launch the “Gram Samiddhi Yojana” to help small farmers. The construction of micro-food processing units with a capital lower than Rs 10 lakh per unit would be encouraged. Emphasis was also put on generating employment in the food processing industry.
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