Frost-free futures: India's cold chain industry - IBT Newsletter March 23-29, 2024

India is the world’s largest producer of milk, second largest producer of fruits and vegetables and a significant producer of seafood, meat and poultry. Due to their perishable nature, these products necessitate a temperature-controlled supply chain, encompassing effective storage, transportation, and distribution methods to extend the shelf life of food grains, fruits, vegetables, livestock products, and so forth, thereby 'de-frosting' their growth prospects.

According to the Food and Agriculture Organization, approximately 1.3 billion metric tonnes of food is lost yearly, which accounts to over one-third of global food production. These losses are estimated to be between US$ 8 billion to US$ 15 billion annually, and a key contributor is the lack of adequate supply chain infrastructure, connectivity and cold storage facilities. This article takes a closer look at current status, ongoing developments and business prospects in this lucrative industry.

India is experiencing a significant uptick in demand for packaging, driven by rapid expansion in consumer markets, particularly in processed food and pharmaceutical industries. It is anticipated that the packaging market will grow to a size of US$ 142.56 billion by 2029, with a compound annual growth rate (CAGR) of 11.06%. In recent years, the industry has emerged as a pivotal force in technology and innovation, impacting various manufacturing sectors.

Nichrome Integrated Packaging Solutions has been a pioneer in next-generation packaging technologies ever since they developed India’s first indigenous milk packaging machine in 1977. India Business and Trade recently caught up with @Parag Patwardhan, Vice President of Sales and Marketing at Nichrome, to delve into the company’s competitive strategies, innovations, and its plans for expanding into global markets.

The ready-to-eat (RTE) food industry is experiencing remarkable growth globally and in India. With consumers increasingly embracing convenience, RTE foods have become a staple in modern diets. In India, as in many parts of the world, the demand for RTE products is surging due to their quick preparation, diverse flavors, and hassle-free consumption.

Revenue in the Ready-to-Eat Food market is estimated at US$ 72.21 billion in 2024. It is projected to grow annually at 9.23% CAGR during 2024-28.?This trend reflects a fundamental shift in consumer behavior towards time-saving solutions without compromising on taste or quality. As we delve deeper into this thriving industry, it’s evident that RTE foods are not just a passing trend but a significant player in the culinary landscape, both domestically and internationally.

European Union is cracking down on goods made with forced labor. These new rules would empower customs authorities in EU countries to take products off the market, if they are found to have been made using forced labor. Primarily focusing on China, they address mounting evidence indicating Beijing’s utilization of coerced labor and extensive internment camps to manage the Uyghur ethnic minority in Xinjiang.

This follows the US’ enactment of the Uyghur Forced Labor Prevention Act. Since June 2022, this legislation has prohibited all imports originating from Xinjiang unless importers can demonstrate that the goods were not produced with forced labor.

These current and impending legislations provide an opportunity for India to fill the gap and expand its exports in a number of sectors.

The Indian government’s recent approval of an Electric Vehicle (EV) policy heralds a ground-breaking era in the nation’s automotive sector. This policy incentivizes companies to invest in local manufacturing by offering import duty concessions for those committing a minimum of US$ 500 million.

Notably, manufacturers of EV passenger cars can import vehicles at a reduced duty of 15% for five years, provided they meet specific investment and pricing criteria, setting the stage for significant industry transformation.

The marketing discipline is currently undergoing a significant transformation with the rise of artificial intelligence technologies like ChatGPT and intelligent marketing tools. AI marketing, which leverages capabilities such as data analysis, machine learning, and natural language processing, is poised to revolutionise how businesses engage with customers and make strategic marketing decisions.

The impact of AI deployment is projected to add trillions to the global economy by 2030, driving local GDP growth significantly. From social media listening to content generation and automation, AI is reshaping marketing functions, offering benefits like improved targeting, cost savings, enhanced ROI, smarter decision-making, and enhanced customer experiences.

Despite challenges like data quality and ethical considerations, the future of AI in marketing promises rapid advancements in computer vision, conversational AI, and predictive analytics, emphasising responsible AI practices for sustainable business growth and enhanced customer satisfaction.

The DHL Global Connectedness Report 2024 concludes from data that globalization is not moving in reverse. Instead, it reveals that globalisation, which means a holistic score based on trade, capital, investment and people flows, actually reached its highest level in 2022 and remained quite close to that level in 2023.?

India’s rank in the index is higher than China and the Russian Federation, but lower than all the other top 10 economies in terms of GDP size. When we look at past trends, India’s score has been relatively static in the range of 49-53 on the index. However, it’s rank has improved significantly from 71 in 2001 to 62 in 2023. The most significant positives for India are on the parameter of Capital. In terms of announced greenfield FDI (share of GDP), India ranks 37 (outward) and 44 (inward).

Also, it is noteworthy that US and China are showing a significant impact of de-coupling in terms of trade and investment, whereas US imports from India are growing at a robust pace. This trend indicates that India is possibly among the gainers from the reduction in US-China trade, and this trade trajectory needs to be analysed further.?

In a significant leap towards self-reliance in the semiconductor industry, India launched three semiconductor projects worth Rs 1.25 lakh crore on March 13, 2024. Of the three semiconductor fabrication facilities, two will be set up at Dholera and Sanand in Gujarat and one in Morigaon, Assam. The semiconductor fabrication unit to be established at Dholera Special Investment Region (DSIR) will be the country’s first commercial fabrication plant.

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