The potential of India?s agri-export sector has opened up vast avenues for infrastructure development in the country. And the government is going full steam ahead in this direction. Various agencies, from KPMG to PWC, have identified bridging infrastructure gaps such as cold chains, cold storage, logistics and food processing units as vital to the emergence of India as an export hub for fresh fruits & vegetables. The big bucks are, however, in the processed food segment.

Conservative estimates suggest that 10%, or Rs 33,000 crore, of India?s fresh produce is wasted every year due to infrastructure gaps. If exploited efficiently, tapping into this wastage could become an established and constant avenue for foreign exchange. The need for efficient handling of fresh produce is accentuated by the fact that only 10% of India?s fruits & vegetable produce of 134.5 million tonne has been made available to cold storage facilities. The cumulative wastage across the present Indian supply chain varies from 24% to 40%.

Estimates suggest that India?s fresh fruits & vegetables produce would cross 300 million tonne in the next five years. An investment of around Rs 20,000 crore would be needed in five years to meet the cold storage and processing requirements of just a third of that produce. The industry, for its part, expects a minimum of 40% of the investment to come from the government.

Identifying food processing and agri-exports as a potential avenue for employment and revenue generation, many government schemes have been initiated to that end. With the country?s inadequate infrastructure hampering the potential growth of agri-exports, 12 locations have been identified for centres to handle agri-perishables for export at an estimated cost of Rs 2,500 crore. The centres would come up at Chandigarh, Rai, Muzaffarpur, Agra, Kolkata, Guwahati, Mumbai, Nashik, Pune, Nagpur, Hyderabad and Dharmapuri, informed KS Money, chairman, Agricultural & Processed Food Export Development Authority.

These centres have been chosen based on a study by Indian Credit Rating Agency and the their proximity to production centres. The deadline for these handling centres has not been decided as yet and the government is still finalising the mode of financing the venture. The minister of food processing industries, Subhod Kant Sahai, has time and again reiterated his ministry?s agenda to set up 30 mega food parks across the country. The initiative involves an expenditure of Rs 15,000 crore as subsidy. Other subsidies for cold chains and other logistics infrastructure have also been announced.

?India?s share in the global processed food market is around 1.5%. The aim is to increase that share to 6%. Further, we would want at least 20% of India?s overall fresh produce to be processed, from the present 6%,? said Sahai. The ministry expects that an investment of Rs 1 lakh crore in the sector would be required to take India to that level in the 11th Five-Year Plan (2007-12). Of this, the ministry has proposed a contribution of 20%, or Rs 20,000 crore, during the plan period. The proposal is pending with the Planning Commission.

Another initiative is setting up six spice parks across the country by the Spice Board. They would come up at Chhindwara (Madhya Pradesh) for garlic, chilli and coriander; Idukki (Kerala) for pepper and cardamom; Erode (Tamil Nadu) for turmeric and chilli; Guntur (Andhra Pradesh) for chilli and turmeric; Barabanki (Uttar Pradesh) for mint; and either Kota or Jalore (Rajasthan) for coriander, cumin and fennel.

The parks will be built as a 50:50 joint venture between the board and investing companies, with the state furnishing the required land. The parks will have processing units to manufacture high-end value-added spices. AV Thomas Company Ltd and Eastern Curry have already evinced interest in the initiative.

Other infrastructure development activities include the proposed setting up of regional quality control laboratories at Guntur, Mumbai, Chennai and Delhi, as well as laboratories for the certification of exports and development of organic farming. The food processing ministry has also proposed subsidies for any agency showing interest in setting up food testing laboratories.

Thus, with 12 centres for handling agri-perishable exports, 30 mega food parks for fresh fruits & vegetables processing and spice parks for value-added exports, and the already existing 58 agri-export zones, once the cart starts moving, India would become the hub for processed food exports.