Interview with Harsimrat Kaur Badal, Union Cabinet Minister of Food Processing, Government of India

Biz@India

January-February 2017

HARSIMRAT KAUR BADAL, Union Cabinet Minister of Food Processing, Government of India

As the Government of Gujarat looks at the potential of the food processing industry and the growth opportunities it brings to the state, Vibrant Gujarat Global Summit 2017 focuses on enhancing the agricultural growth through food processing. Food Processing minister, Harsimrat Kaur Badal talks about the potential of such events.

Please give us your impression on the various food processing summits you have been a part of in the recent past. 

It is always a pleasure to visit food fairs. We have received positive responses from everyone. The government has taken many initiatives, not just to bring the focus on the food processing sector, but also to create an environment for it to flourish. One of the major decisions of 2016 has been the allowing of 100 pc Foreign Direct Investment (FDI) in multi-brand food retail that is processed and manufactured in India. This has created a lot of buzz among the big retailers. With the fastest growing economy in the world, India has the highest amount of FDI that has come into any country in the world. We have brought in transparent tax systems and got rid of all the obsolete old laws.

Predictable tax regime, ease of doing business and ‘Make in India’ has all created an environment where the world is looking at us as an attractive business destination. And, Vibrant Gujarat’s theme of ‘Make in Gujarat for India’ will further the campaign.

We have been working at creating infrastructure for food processing for the last two years and are hoping that everyone who is showing interest in India is going to come to India. I realise that since the interest is there, a platform like Vibrant Gujarat, for people to meet and to take this further, is an apt one. We are also going to hold a ‘World Food Fair’ in November 2017 to underline our commitment to the industry. It is going to be a platform where every state can participate and showcase the innovations and improvements in their respective food sectors. Other countries will also be participating, and there will be sector-wise segments like organics and others, along with a food street, where they can also showcase their food. It would be like a testing ground to see how different cuisines are liked by the Indian palate.

I hope that this leads to people coming together. And they take food to next level to make in India, process in India, make for India or for other food importing nations which are close to the country.

How is the mega food parks scheme taking shape? 

A mega food park is a huge infrastructure that comes up with all common facilities in one area. Then there is space for other smaller units to come and plug, play and use those common facilities. This saves the hassle of putting in the investment of the infrastructure. After the infrastructure is up, the park starts getting populated. Ideally, about 50-60 units should come into every park. Eight out of our 37 parks are already up and there will be another four to five coming up every year. Within 24 months, they will all be up and functioning. Mega Food Parks are where we have focused on creating infrastructure so that processing could take place. Now, with multi-brand retail being allowed, we need the market side tied up. Once the retail happens, these food parks and processors will feed those retailers. So, between the cold chain and Mega Food Parks, we have put up the infrastructure. We have USD 600 billion retail market in India at the moment. About 65 pc of that is for food. We are sixth largest in the world as far as food and grocery is concerned, and with a huge demand, rapidly growing middle class and urbanisation, it all leads to the demand for processed food. We are looking to see how we can get in the foreign tie-ups for these retails chains. They will bring the know-how and the technology, and professionalise the retail business in India.

But, will these multi-brand retails also have local content requirement? Or, can they have 100 pc imported food? 

Not at all. It is only for food that is 100 pc produced or manufactured in India. That is where the scale of economy is going to come in. If you start importing, it is too expensive and will not sell. So food is to be kept fresh and made locally. Just like PM Modi’s ambition of seeing India get self-reliant with time and then be considered the industrial hub of the world, we need to make our food processing sector eradicate all food issues that are pertinent in our country today.

But, some products are not available in India. For example, some kind of cheeses, olive oils etc. How do you cater to the demand for such items? 

Olives have now come up in Rajasthan and parts of Punjab. So, there is a lot of olive oil processing happening and the government is mulling upon this. You may be allowed to get certain parts of what you sell that is not produced in India, but as of today, it is only for food which is either produced or manufactured in India. So even in the case of cheese, you can get the raw material and add value to it in India, which is allowed under the multibrand retail. Same goes for olive oil.

Coming to the question of value addition, at SIAL and other fairs, the Indian sellers are selling very basic stuff. So, is the government pushing them to add value? 

The opportunity is there. We have the largest raw material base and are the largest producer of food in the world. But, we just process barely 10 pc of what we produce. In India, people are used to cooking fresh food and consuming it. However, the new generation prefers ready-to-eat and ready-to-cook food. So, the demand is growing and so is the potential and opportunity. We have brought in a lot of infrastructure for that because we realise that processing is the way in the future. We just need to bring down our wastages and show better remuneration to the farmers. So, a chain and a certain environment have been created. The taste and preferences are changing now. Maybe people are not displaying that now because they have known very well that rice is one of the biggest things that are exported. Our basmati has been doing very well. People will adapt to these things the moment there is a retail outlet where they can sell. Today, even if they make basmati , where do they sell it?

We can export it. I will give you an example. I was amazed to see at Anuga, two years ago, that a German company was selling mango lassi and they were trying to patent it. If you go to the Parisian supermarket, you will find Vietnamese and Thai companies selling value-added rice. So, they export rice but they also export readymade rice. 

ITC is one of the biggest players in India who are into ready-to-eat foods. They make dal makhanies , chanas , bhindis , biryanis and others. I asked them why they don’t export it. They said that they cannot meet the domestic demand. So like I said, for 1.3 billion people, you put a couple of countries together and that is the demand in our own country. So ITC has not thought about it, although they are in the process of doing so. They are still trying to expand and catch-up with what is required in India itself. I tell people to use the opportunities and ask them to come to India and make for Indians or make in India for the rest of the world. We are looking at making India the food factory of the world, very much in the same line as Gujarat is aiming to be considered the industrial one-stop-shop of the world over the next few years.

As the food processing industry develops, what is the manpower situation? Do we have adequately well-trained people and technicians working in the plants or does the government have a plan about it? 

50 pc of our population is under the age of 29. And, this has led to a strong focus on skilling them to optimise that asset to the nation. A separate skill ministry has been set up under the prime minister, with the target to skill the 50 million youth population over the next five years. Every sector and every ministry has been given a target. In food
processing, we have identified fiveseven key food processing areas, and have taken from them the feedback on what kind of skills are required. Based on those skills, the norms and a polity pack have been created. We are going to impart those skills. So that there is a big number of a skilled person for the food processing sector, ready by the time the mega food parks and retail chains are ready to take off. For example, in the bakery sector, in the last six-eight months, we have trained around 38,000 people across 27 states. So, not just in food processing, but in every sector like the dairy, fruits and vegetables, meat and the poultry, we are skilling people and getting our youth ready.

So, you don’t see a dearth of manpower? 

Not at all. In fact, human resource is our forte. Along with being the cheapest, our labour force is also going to be the most-skilled available. As far as the food processing industry is concerned, it’s one of the highest generators of employment even today. In sorting, grading, washing, cleaning, you don’t even need a skill or an education. You can just go ahead and pick it up. This makes up the bulk of the labour that goes into a cold chain. Besides this, the skill aspect is what the ministry is looking at.

Are you looking for any overseas help in terms of joint ventures in skilling for technology that you want to bring to India? 

It is always welcome. Under my ministry, we already have the only institute in food processing management and entrepreneurship, which is just outside Delhi in the state of Haryana. We have been looking for an international tie-up for that institute. My focus is to bring in the processors and the retailers because the rest will then follow. You cannot have skilled manpower ready and then have nowhere to employ them. So, we must first ensure that there is a working environment, which will automatically make them enhance their skills.