Thinking of initiating a food processing unit in India? Here is all you need to know about

A significant share of India’s revenue generation comes from agriculture. India is the 6th largest country in the food and grocery market and the 5th largest retail market globally.

The food processing industry is an emerging space and has good prospects. In this blog, we will discuss on how to establish your own food processing unit with necessary food licence registration. If you do not have enough human resources, you might consider reaching out to professionals for help.

On the 17th of April, Italy launched its first-ever mega food park project in India involving food processing facilities amid efforts from both sides to strengthen ties betwixt both the nations. This pilot project was named as the mega food park, with the signing of a letter of intent betwixt the ICE office in Mumbai and Fanidhar mega food park in Gujarat.

Defining the concept of the food processing unit.

It includes all the techniques and methods involved in concerting the raw material or combining raw materials into a consumable product. The food processing unit is an intrinsic part of practices like horticulture, agriculture, plantation, animal husbandry, and fisheries. It also contains other industries that use agriculture inputs for manufacturing edible products. This manufacturing industry has become the site of profits and investment.

The processed food industry’s net worth is estimated to be around Rs. One thousand one hundred crores, and it is proliferating with the rate of 10-15% annually. The food processing units comprise nine categories based on the basic raw materials begin used.

Significance of food processing units.

It is crucial in a process that makes sure we have food throughout the year regardless of its seasonal nature or easily perishable variety. Mass production of these processed foods can be very profitable, unlike those made by a person.

Advantages of investing in India.

– It is a prospective industry due to the increased demand by most of the urban middle-class populace.

– Changing consumption pattern.

– Availability of raw material is plentiful.

– Relatively low cost of production.

– Attractive fiscal incentives that make India the best option.

How can one initiate the food processing business in India?

The Indian government has laid down many schemes and policies to help establish food processing units in India and to offer them financial support and incentives to modernise the industry. To initiate any food-related business, the FSSAI license becomes compulsory. There are various types of FSSAI registrations and licenses available for starting a food business as it differs depending on the business type. Nonetheless, there are multiple processes to be abided by to protect the company, such as; legally.

Market analysis and business research.

Comprehending the market and opting for the product to be manufactured is essential in initiating any business. While opting for the product, the investor should keep in mind the product’s viability in the market. Also, it is crucial to research the industrial and economic outcomes of the existing food processing industries, which would help decide the market size, rivals, and trends.

Once the fundamental market research is done, the business should be structured as per the requirements to make it legally stable. There are options like a private limited company, public limited company, LLP, partnership firm and so forth. With their own pros and cons. These choices can be made based on the manufacturing industry’s size and annual turnover, and other compulsory criteria. It is suggested to seek help from legal experts on these matters.

Factory’s location.

As per the market size, it is crucial to find a suitable factory location. It is suggested to determine a location with easy accessibility and feasibility of resources such as raw material, transportation, electricity and so forth. Another crucial factor is to consider government-given subsidies and tax exemption in some states. Through analysis of such factors, an ideal location can be found. The perishable nature of food and duration should be considered to maintain a good process throughout the year.

Business plan and strategy.

All the analysis and research made initially should be streamlined according to the needs of processing units. New strategies and policies should be formulated for the company to generate a blueprint of how the company should operate, and future plans should be roughly decided. In the case of food processing units, one must keep in mind the future outcomes of the industry and its growing trends.

Funding.

Every business requires funds for bringing the material and maintaining the value chain once the industry grows. Funds can differ as per the nature and size of the industry. Hence, it is crucial to have shareholders and find a constant funding source for the company.

Legal implication.

Once the company is established, it should be registered with relevant authorities before the business is set into motion. The companies act, 2013 states that companies should be registered by filing certain documents and requisite forms to get themselves registered as a company in India. The company should also get registered for several taxes like sales tax, PAN, excise and customs registration, service tax and so forth. The trademark should be safeguarded from being misused, so an IPT registration which includes copyright, patents and others, is mandatory. Other acts like the food safety and standard act, 2006 and the standard and weight measure act should be followed with additional compulsory licenses.

Implementation.

With all the requisite steps to initiate the food processing unit, it is crucial to strategically implement all the compulsory requirements without any errors for a smooth business run.

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