India to become BPO hub for food processing

In order to promote agri-business in the country and “improve the economic sustainability of farmers”,

In order to promote agri-business in the country and “improve the economic sustainability of farmers”, the government has drawn out a road map that includes a host of tax incentives for the food processing industry, besides a step up in public investment for the next couple of years.

In the roadmap cleared by the group of ministers (GOM) chaired by agriculture minister Sharad Pawar last month, the government plans to make India as a “BPO hub” of the world for food processing.

The government wants to classify food products in three categories — products processed from perishable commodities, products from natural produce with longer shelf life and grain-based products that include composite foods, biscuits and ready to eat foods.

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Recognising that creation of critical infrastructure is a pre-requisite to fill the gaps in the supply chain, so as to link the farmers with industry/market, which according to the GOM alone can improve the economic sustainability of farmers, the government would invest close to Rs 3,600 crore over the next two years. This includes around Rs 1,580 crore in 2007-08 and another Rs 2,080 crore the following year.

Outlining the intent to make India as a BPO hub in food processing, the government is also considering providing financial assistance for the wine and beer industries based on agri horticulture produce.

The idea behind this is to promote this segment of industry by treating it differently from hard liquor on account of the potential value addition to grapes/farm products as well as for promoting agricultural diversification and offering higher incomes to farmers along with more employment opportunities. Added to this, such assistance would counter the large import of wines into the country.