India’s Untapped Processed Food Export Potential: Lessons from Leading States
- Dr. Raina Jain
- Sep 22
- 3 min read
India is a food powerhouse. With millions of farmers and a vast diversity of crops, we rank among the world’s largest producers of grains, fruits, spices, oilseeds, and pulses.
And the processing industry is equally massive — with over 3.4 lakh licensed food processing units across the country (31,378 Central licences and 309,575 State licences as per FSSAI/MoFPI data).
Yet here lies the paradox: only a few states consistently lead in processed food exports from India, while large agricultural states lag behind.
The Big Picture: Processed Food Exports from India vs Production Capacity
India’s processed food exports touched USD 49.4 billion in FY 2024–25, and this number is growing. But when you dig deeper, you see that Gujarat, Maharashtra, Tamil Nadu, Andhra Pradesh, Karnataka, and Telangana dominate export volumes.
Meanwhile, central and eastern states like Madhya Pradesh, Rajasthan, Bihar, and Chhattisgarh — despite being huge producers of cereals, pulses, and oilseeds — export relatively little processed food.
This imbalance is not due to lack of crops. It’s due to a gap in export-ready processing ecosystems.
What Leading States Do Right
Crop-to-Market Alignment
Gujarat leads in groundnuts, spices, and oilseeds — and has clusters around them.
Maharashtra excels in grapes, onions, mangoes, and processed fruits.
Tamil Nadu, Andhra Pradesh, Karnataka, and Telangana export mango pulp, bananas, spices, seafood, and ready mixes.
Infrastructure & Scale
Mega Food Parks, cold chains, packhouses, and export-grade facilities are concentrated here.
These states also have a higher share of Central licensed units, which are typically export-ready.
Logistics & Buyer Confidence
Easy access to ports like JNPT, Kandla, Chennai, Vizag, and Cochin reduces costs.
Established exporter networks and quality systems make buyers return year after year.
Why Many States Lag Behind
Crop profile mismatch: Heavy production of wheat, pulses, and oilseeds — which are harder to export without processing.
Low share of Central licences: Many units are only state-licensed (micro/local) and not geared for exports.
Infrastructure gaps: Fewer food parks, labs, and common facilities compared to leaders.
Distance from ports: Higher transport costs make exports less competitive.
The result? States like Madhya Pradesh, Rajasthan, Bihar, and Chhattisgarh are stuck at the raw-produce stage, missing out on global processed food demand.
Why This Matters
Global demand for processed and value-added food is growing much faster than for raw commodities. If India’s lagging states do not adapt, they will continue to sell bulk crops at low margins while a few states capture the high-value export market.
But if processors in these states step up — upgrading licences, investing in quality systems, and connecting with export supply chains — they can unlock enormous untapped potential.
What Governments of Lagging States Can Do
State governments have a critical role in turning production into exports. Some targeted actions could include:
Policy Incentives
Offer subsidies and tax breaks for units upgrading from state licences to central licences.
Support processors in obtaining global certifications (FSSC 22000, HACCP, ISO).
Infrastructure Development
Invest in inland container depots, cold chains, and testing labs closer to production hubs.
Expand Mega Food Parks and cluster-based processing facilities.
Export Facilitation
Create state-level export cells that guide processors on documentation, buyer requirements, and trade fairs.
Partner with APEDA to organise international buyer-seller meets within the state.
Skill & Awareness Programs
Train entrepreneurs and MSMEs on export standards, quality compliance, and packaging norms.
Encourage farmer-producer organisations (FPOs) to work directly with processors for export-oriented crops.
By actively promoting processing and export-readiness, state governments can ensure that their farmers and industries benefit from global demand — not just from selling raw produce.
The Way Forward
For lagging states to join the export map, the focus should be on:
Upgrading state-licensed units to central licences (export readiness).
Building farmer–processor–exporter linkages to aggregate crops for global buyers.
Investing in quality labs, certifications, and cold chains.
Leveraging government schemes (PMFME, ODOP, Mega Food Parks) to scale faster.
Final Word
India’s leading states prove that production alone does not guarantee exports — it’s about processing, scale, and market linkages.
For processors in states like Madhya Pradesh, Rajasthan, Bihar, and Chhattisgarh, and for their governments, the message is clear:
👉 Don’t stop at raw production. Build the ecosystem, upgrade processors, and plug into the export chain. That’s how we create value, not just volume.
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