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India’s low-cost food for belly-up West

delhi Updated: Sep 10, 2009 00:29 IST
Zia Haq
Zia Haq
Hindustan Times
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When the global economy was mired in recession through 2008-09, India peaked its exports of farm products, making ready-to-eat and pre-cooked meals affordable for the developed world.

According to data from Agriculture and Processed Food Products Export Development Authority (APEDA) exports grew by 24% (worth Rs 39,461 crore) in 2008-09.

“Indian companies are adhering to cost competitiveness, trying to keep it low or manageable in a year of low income. The government’s support has been the key,” Praveen Gupta, APEDA’s general manager for processed foods told HT.

According to APEDA director S Dave, food exports would exceed Rs 1 lakh crore (about $22 billion) in the next five years, which is 5% of the global share.

APEDA monitors 16 farm products through an Act of Parliament. “India allowed 100% FDI in processed food, which created good infrastructure. This in turn helped in making affordable food,” Gupta said. These include processed meat, fruits and ready-to-eat cereals.

APEDA has helped set up centres for processed foods (CPCs) at nine international airports. CPCs are basically hygienic storage depots to keep food fresh in the event of fight delays or cancellations.

The FDI has also added capacity. “When volume goes up, costs decreases,” Gupta added. Other factors that boosted exports include 100% “traceablility”, which means any substandard product can be traced back to the farm it came from.

At an ASSOCHAM event on Wednesday, minister of state for food K V Thomas said India’s value of exports continued to exceed the value of imports.

“This trend clearly shows trade policy reforms of the government have greatly accelerated globalisation of the agri sector,” Thomas added.