The growth of economy and increase health awareness has brought rapid changes in food habits. The consumption of simple cereals has shifted to nutritious diet such as milk, fruit and vegetables, poultry, fish and meat products. These changes have made the emergence of food processing industry, imperative.

The food processing sector, though in a nascent stage, constitutes 14 per cent of manufacturing GDP and amounts to product value of Rs.2,80,000 crore. It employs 130 lakh persons and has the potential to promote 2.4 times indirect employment by direct employment creation. The employment in the value added sector is larger than the whole manufacturing sector. India, with 184 million hectares of arable land, is the third largest producer in food grains (210 million ton) and second in fruits and vegetables (150 million ton). It also has the largest live stock (483 million stock), highest milk production (91 million ton) and fifth and seventh largest in egg and fish production respectively.

Despite high production, the country's processing sector is in a nascent stage. Only 2 percent is processed in the fruits & vegetables and poultry sector.and 4 percent in fish. In the milk sector, thanks to the cold storage infrastructure and modernization of dairies, it is an impressive 14 percent. Bulk meat de-boning is to the tune of 21 percent.

Processing in food-grains, oil seed, tea and coffee, India is far behind; even lagging behind countries like China and Philippines, where value addition is 45 percent and 23 percent respectively as compared to India's 7 percent in food products.

The Government has a Vision Plan of Growth for the Food Processing sector to increase the processing level of perishables from 6 per cent to 20 per cent and enhance value addition from the present level of 20 per cent to 34 per cent. India's share in global trade will be up from 1 per cent to 3 per cent, tripling the size of the processed food industry by 2015. This would provide direct employment to 18 lakh people and indirect employment to over 64 lakh people.

The Draft National Policy of Food Processing and Vision Statement has been prepared for a speedy development of the food processing sector. The Draft Policy envisages reduction in wastage, increase in the level of processing, enhancement in value addition, employment generation and provision of profitable remuneration to farmers.

With WTO lowering subsidies to developed countries and encouraging world trade of processed commodities, the Indian food processing industry has an opportunity to come to the fore. But, India's export has performed unevenly specially in value added products.