The Indian food processing market is an emerging market in terms of production, consumption, and export and import prospects. Since, India is one of the major food producers worldwide, with new reforms ruling the roost, it encourages commercialization. The country's food processing market is opening up to a wide range of investors across the globe. The food processing industry has witnessed a remarkable change in consumption patterns due to which it has been on a roll. The turnover of the industry tipped the mark of Rs. 4,15,000 crores and is expected to grow by 8% every year. In fact, in the last decade India moved from an era of scarcity to surplus, in the area of food production. Consequently, analysts say that the food processing industry in India is surely on a track of growth and profitability over the next five years. It is also estimated that food-processing market in India will attract a mammoth investment, in the form of capital, human, technological, and financial, of over US $32.1 million by 2010.

In terms of production & consumption, export & growth terms the sector of food processing industry is one of the largest sector in India. It is pronounced as a high priority sector by the government, with a number of fiscal help and benefits, to boost commercialization and value addition to agricultural produce and also for reducing the pre/post harvest wastage, generating employment and export growth. Due to the vast nature of the food processing industry & a policy of SSI reservations, it has taken a predominant role for small enterprises. The organized sector, which consists mainly large companies accounts for only 25% of the market while the remaining 75% of the market is divided between the small scale and the unorganized sectors. The micro and local community based food processing enterprises have conquered the primary processing segment of the industry. Small and medium firms are mostly operating in niche markets.

In an attempt to improve the food sector, the government is working on agrizones and the concept of mega food parks. Around 15 such mega parks are forthcoming across the country in various cities to be a focus for Foreign Direct Investment (FDI) in the food processing sector. The government has assigned an approximate amount of US$ 20 million to execute the food parks scheme. So far, it has approved 40 food parks for assistance across the country. The centre also plans around US$ 15 billion subsidy for mega food processing parks.

The country's foreign direct investment (FDI) in food sector is estimated to touch the US$ 3.2 billion mark. The last one year has been beneficial for the sector with FDI approvals doubling the pre-existing. The cumulative FDI inflow in food processing reached US$ 2,804 million in March '06. In '05-06, the sector received approvals worth US$ 40 million. This figure is almost double the US$ 18 million approved in '04-05.