Australian food industry urged to act on India boom

India is rapidly emerging as a critical market for Australia’s food industry, according to a new Australian Government-funded report launched in New Delhi today.

Minister for Trade, Warren Truss, and Minister for Agriculture, Fisheries and Forestry, Peter McGauran, said the report, Strengthening the India-Australia corridor in select food and agribusiness sectors, showed increasing consumer demand among the sub-continent’s burgeoning middle class.

Mr Truss said that this demand was creating huge opportunities for businesses in the Australian food sector.

"Indian food retail is a multi-billion dollar industry, estimated to be worth around $233 billion, with food being the largest category of consumer spending."

"The sub-continent’s 300-million strong middle class, with its growing affluence and changing lifestyle, is driving growth in organised food retail and food services, with organised retail expected to increase by 30 per cent over the next five years," he said.

Mr McGauran said that the size and the rapid growth of India’s food sector were creating enormous potential for Australian food producers and food services suppliers.

"Australia’s expertise in food production, combined with high-quality ingredients and cutting-edge technology, places us in an ideal position to make greater inroads into India," Mr McGauran said. "The increasing demand for food, including higher value products in countries such as India presents significant opportunities for the Australian food industry to expand its export markets."

"Australia can also supply the expertise in retail services, supply chain and cold chain logistics, agricultural technology, and food production and processing, that India needs to develop its food industry," he said.

Mr Truss said the report highlighted that India’s already vast market was set for further growth.

"India’s food service sector is currently valued at $11 billion but organised players enjoy less than five per cent market share."

"The Indian food processing industry is also in early stages of development. With only two per cent of India’s total fresh produce currently being processed, there is substantial scope for growth," he said.

The report was compiled by Rabo India Finance. Strengthening the India-Australia corridor in select food and agribusiness sectors was commissioned at the Joint Ministerial Committee by Mr Truss and endorsed by Indian Minister for Commerce and Industry, Kamal Nath, in February this year.

India is Australia’s ninth largest trading partner with two-way merchandise trade valued at $11.4 billion in 2006-07.