Development and Export Participation of the Indian Food Processing Industry: A Historical Perspective

This article aimed to analyse the development and export participation of the Indian food processing industry from a historical perspective, using a descriptive research methodology. All the food processing firms accounted for in the Annual Survey of Industries database (2022–23) were subdivided into four sub-groups base on their year of establishment: 1816–1947 (British India period), 1948–1990 (post-independence pre-economic reform period), and 1991–2023 (post-reform period), respectively. Export participation was measured as the absolute number of processed food exporting firms and their percentage share of total food manufacturing firms. The results showed that a total of 568 food processing firms were established between 1816 and 1947, of which only 6 (1.06%) firms participated in the export business. Evidence shows that the first processed food exporting firm was established in 1922. Since 1947, the story of export participation in the Indian food processing industry has turned. During this period, a total of 4596 food processing firms were established from which 113 firms participated in the export process. The share of exporting firms reached 2.46% of the total food processing firms. Out of the total firms established between 1991 to 2023, 910 firms participated in the export process, which was only 3% of the total firms in this industry. It needs to be mentioned that the share of exporting firms in the total number of firms increased marginally in the last period as compared to the period 1947-1990. However, based on the above findings, the following conclusions may be drawn. Up to 1947, despite a sizable number of firms in the industry, only 6 firms were allowed or capable of entering into the export business. Their exports were largely of primary and minimally processed or raw agricultural goods. Exported products included tea, coffee, spices, sugar, rice, oilseeds, and dried or salted marine products. The period between 1948 to 1990 was the period of inclination into the international processed food market through rising involvement in the export business. During the last period the number of exporting firms increased, and their share in the total number of firms increased from only 2.46 % to 3%. This low share of exporting firms in the total firms may be attributed to the rising international competition in the new economic reforms period. This study has the limitation that the count of firms for each period is the cumulative of firms in the previous and the current period. Also, there is no information in the data about which firms are replaced by newly established firms in the industry.