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FICCI Releases Report on Food & Beverage Industry
As per a report released recently by Federation of Indian Chamber of Commerce and Industry (FICCI) during a seminar on food & beverage service industry, released by Atul Chaturvedi, Joint Secretary, Department of Industrial Policy & Promotion (DIPP), the issues faced by F&B industry are:
- Lack of quality infrastructure & shortage of adequate skilled manpower.
- High real estate costs.
- Large number of licenses required to operate in the sector.
- Plethora of taxes.
The report suggests that the government’s intervention in creating good infrastructure & developing skilled manpower would go a long way in growth of this sector. Simplified licensing requirements with a single-window clearace approach and rationalisation of taxes levied on the restaurant industry are a few solutions proposed in the report to effectively tackle licensing and taxation issues, faced by the industry.
Commenting on the issues raised in the report the secretary said that the government recognises this sector’s potential for growth and job creation. Hence, it has been identified as a priority sector in the National Manufacturing Policy & is amongst the top 25 priority sectors, which are being promoted across the globe to attract investment. This sector has also received highest FDIs. Hence, the government is running awareness campaigns through digital and social platforms to attract both domestic & global investments. Government is looking out for potential markets & engaging with potential investors in specified and targeted interactions to convert proactive investments into real ventures.
On the ease of doing business, secretary stated that state governments would be ranked on this issue and the world bank has been approached on this issue. The government has been of late focussed on developing the food processing infrastructure through the promotion of cold chains & integrated food parks by subsidising the capital cost.
As per the report with an ever increasing young population the expenditure on eating out has increased and it has evolved from an occasion-driven activity to an occasion in itself for the youth. According to the report the maximum growth is registered in the restaurant categories. Though the fine dine market constitutes only 3% of the market, the segment is witnessing a renewed interest and large number of multinational chains are entering the market.
Dr. Arbind Prasad, Director General, FICCI, said that Indian F&B service industry was one of the most vibrant industries that saw unprecedented growth in the recent past and continued to expand rapidly. Hence, understanding the opportunities in this sector FICCI has constituted committees to record concerns and voice these concerns to the right authorities.
While launching the report, Piyush Patodia, executive director, Grant Thorton India LLP, said that “Foreign brands need to ensure that although they see India as a large opportunity, there needs to be an appetite for risk taking. India is a difficult terrain to operate out of with multiple taxes, complex licensing and high operating costs. In addition taste and preference vary significantly based on the location within India. With correct planning and customisations, companies can see explosive growth of their concept in India.”
