Tamil Nadu: An emerging food processing hub

Vishnu Mahajan, Additional Commissioner, MSME Department at Government of Tamil Nadu, opines that Tamil Nadu is a ripe for investments due to high production volumes, deep industrial culture, skilled manpower, favourable agro-climatic conditions & connectivity.  

The agricultural sector of Tamil Nadu contributes 12% to the economy and  provides livelihoods to around 40% of its  population. Tamil Nadu is India’s leading  producer of mangoes, bananas, turmeric,  papayas, rice, maize, sugarcane, coconuts,  groundnuts, cashews, beans, and grapes.  It is the largest producer of tapioca and  tamarind, second largest producer of  poultry and eggs, third largest producer  of tea and coffee, and fourth largest in  marine fish production. 

With total food grain production regularly exceeding 10 mn MT, the state  is home to over 24,000 food processing  firms classified as MSMEs as well as 1,100  medium and large units. It is ranked  2nd in terms of food processing units &  contributes around 8% to India’s national  food processing output.  

Tamil Nadu is also among the leading  exporters of marine products, rice, cereal  products, dairy products, etc. The sector  provides exciting business opportunities  for developing infrastructure pertaining  to agro-processing clusters, food parks,  coastal aquaculture parks/cluster, Food Testing & Quality Control Labs and capital goods manufacturing. Tata Coffee, Britannia, Nestle, Pepsico, Lotte, Suguna foods, HUL and ITC are among  the leading MNCs present in Tamil Nadu. 

The state offers a favourable business habitat for Integrated Storage and Warehouses, Cold Storage Infrastructure, and packaging & barcoding of food  products. Tamil Nadu has built a huge  talent pool through a network of  agricultural colleges and research centres. Companies can explore avenues for  technology infusion in fruits, vegetables  & marine products, milk products, ready-to-eat products, medicinal herbs &  aromatic extraction, edible oil extrusion  plants and cashew nut processing. 

Currently, the level of processing of  food commodities is less than 2%, and the  government is working to raise it to 10%.  It is setting up 6 mega food parks and 15 small food parks/agro processing clusters  where units will be eligible for capital  investment subsidy and other incentives as  per the new Industrial Policy 2021 for large  investors and MSME Policy 2021 for MSMEs.  

The policy is focused on promoting  innovative measures for group  cooperation in adoption of pre- and  post-harvest technologies, change in cropping patterns, upgrading processing  standards, providing financial assistance  to entrepreneurs, speedy infrastructure  development and removal of legal/ statutory hurdles to growth.  

State infrastructure development  agencies SIPCOT and SIDCO offer developed lands and ready to occupy  plug-and play facilities along with  infrastructural facilities like dedicated  power, water, drainage, STP/ETP, telecom,  banking etc on long-term lease (99 years) to large industries and on outright sale and short-term lease (30 years) to MSMEs. 

In addition to various taxation/ stamp duty/interest payment/market  fee exemptions/marketing promotion  incentives, necessary technical assistance  is provided to food processing industries  in branding, exports, packaging, and training. All statutory clearances can be  applied and received online through the  single window portal. M-TIPB will function as facilitating agency for single window clearance system for new investments for speedy and timely clearances.

---

Vishnu Mahajan is an Additional Commissioner, MSME Department at Government of Tamil Nadu. In the past, he has served as the Sub-Collector and Sub-Divisional Magistrate at Chidambaram in Cuddalore District Tamil Nadu. Views expressed are personal.

This column was originally published in Fresh – the Indusfood Chronicle 2021. Fresh is the official event magazine for Indusfood, the flagship annual F&B trade show organised by the Trade Promotion Council of India.