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Infrastructural bottlenecks, high food inflation challenge the efficiency of Indian food supply chain
The Indian food supply chain is marred by infrastructural bottlenecks, high food inflation, varied food preferences and low brand consciousness, said Dr. Arpita Mukherjee, Co-author and Professor, ICRIER, here today.

Addressing a seminar on 'Food Supply Chain in India: Analyzing the Potential for International Business' organized by FICCI in association with IIM Calcutta, she underlined the need to address the policy gaps in the agriculture and food processing industry.

Dr. Mukherjee suggested that a stronger regulation to check anti-competitive practices and consumer protection; streamlining sourcing and supply chain; fiscal reforms - implementation of GST and uniform taxes for processed food; efficient implementation of FSSA; rationalizing import duties and trade policies; learning from global best practices and inter-governmental collaboration and information sharing, could be some of the steps in enhancing the efficiency of the value chain.

She added that besides regulatory, fiscal and trade-related barriers, inconsistency in supply of raw material, lack of processable quality agricultural raw material, improper handling of products, lack of cold storage and inadequate working capital and use of inferior technology had emerged as some of the biggest challenges for the food supply chain.

Bijou Kurien, Chairman, FICCI Retail Committee, said, "The role of food in the economic and social development of India cannot be underestimated. Connecting the producers of agricultural products and livestock with the processors and producers of food and finally with the consumers is a mammoth task. Unless, we work in an integrated manner, we will never realize benefits for our farmers and sustained quality and availability for our consumers."

Dr. Sanjeevan Bajaj, CEO, FICCI Quality Forum, said that a well-developed food value chain is expected to increase farm gate prices, reduce wastages, ensure value addition, promote crop diversification, generate employment opportunities as well as export earnings. Further, it benefits both the ends of the chain i.e. the farmers and the consumers, as farmers tends to get better price for their products and consumers too need to pay less.

On the occasion, a report on 'Food Supply Chain in India: Analyzing the Potential for International Business' was released (report summary attached) . The report analyses the potential for international businesses in the food supply chain of India. Specifically, looks at their modes of entry and operation and their contribution to the Indian economy.

It examines regulations in the food supply chain in order to help international businesses understand the regulations. Based on secondary information and a primary survey, it identifies the barriers faced by international businesses and suggests a go-to-market strategy for them.

The report makes policy recommendations to the Indian government so that the country can attract the desired foreign investment and technology, encourage the growth of the organised sector and manufacturing, create quality employment and link Indian suppliers (farmers, manufacturers, etc.) to the global supply chains and production networks of global multinationals in the food supply chain business. The report covers the retailers, manufacturers and food logistics service providers.



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