Beverages

According to a report published by market research firm RNCOS in August 2009, titled "Indian Non-Alcoholic Drinks Forecast to 2012", the Indian non-alcoholic drinks market was estimated at around US$ 4.43 billion in 2008 and is expected to grow at a CAGR of around 15 per cent during 2009-2012.

As per the report, the fruit/vegetable juice market will grow at a CAGR of around 30 per cent in value terms during 2009-2012, followed by the energy drinks segment which will grow at a CAGR of around 29 per cent during the same period.

Major investments

Some of the major investments in the industry are:

• Iffco is looking at entering the dairy business by setting up a new venture by the year end at an investment of US$ 224.9 million.
• Capital Foods and Kishore Biyani-led Pantaloon Retail plan to float a Special Purpose Vehicle (SPV) that would invest US$ 60 million in setting up two mega food-parks in Maharashtra and Karnataka.
• India's largest sugar refiner Shree Renuka Sugars will acquire 50.34 per cent stake in the Brazil's Equipav AA for US$ 248.4 million.
• McDonald’s India plans to invest US$ 2.15 million annually, adding 30 restaurants per year in the western and southern region in the next three-four years.
• Amul is planning to add 15,000 more retail outlets to its existing 70,000 outlets by the end of 2010.

Government Initiatives

• The Centre has announced a series of new initiatives which include a separate policy at the state level, thrust on contract farming and making the sector tax-free.
• The government plans to open 30 mega food parks by the end of the 11th Five Year Plan (2007-2012).
• In the Union Budget of 2010-11, the government has announced setting up of five more mega food park projects in addition to the ten already being set up. Moreover, external commercial borrowing will be made available for cold storage or cold room facility including for farm level pre cooling, for preservation or storage of agriculture and allied produce, marine products and meat.

As per information published on MOFPI

• Income Tax rebate is allowed, 100 per cent of profits for 5 years and 25 per cent of profits for the next 5 years, for new industries to process, preserve and package fruits and vegetables.
• Excise duty on ready to eat packaged foods and instant food mixes has been brought down to 8 per cent from 16 per cent.
• Excise duty on aerated drinks has been reduced to 16 per cent from 24 per cent.

Looking ahead

According to an industry body and E&Y study on the Indian food industry called 'Flavours of Incredible India – Opportunities in the Food Industry', published in October 2009, investment opportunities in the Indian food industry are set to shoot up by a huge 42.5 per cent to US$ 181 billion in 2015 and to US$ 318 billion by 2020.

Exchange rate used: 1 USD = 46.33 INR (as on June 2010)