Processed food exports gain steam, US leads the rise in global appetite
Exports of ready-to-eat and cooked food items increased 16% to $2.4 billion in 2025-26 from $2.1 billion in the previous financial year, according to an ET analysis. The analysis is based on 11 items including pasta, sweet biscuits, pastries, papad, coffee and tea.
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Context
India's exports of processed, ready-to-eat, and cooked food items saw a significant 16% increase, reaching $2.4 billion in the 2025-26 financial year. This growth, driven by strong demand from the US, UAE, and new markets like Russia, underscores the sector's expanding global footprint and the positive impact of government initiatives like the Production Linked Incentive (PLI) scheme for food processing.
UPSC Perspectives
Economic
The robust growth in processed food exports is a crucial indicator of India's shifting export basket, moving towards value-added products. This transition is vital for increasing export earnings and reducing reliance on raw agricultural commodities, which are often subject to price volatility. The success is partly attributed to the ₹10,900-crore , introduced by the in 2021. The scheme incentivizes manufacturing and the creation of global food champions by providing financial incentives based on incremental sales. The growth in specialized categories like unflavoured instant coffee and frozen potato products highlights the importance of product diversification and adhering to international quality standards, which are essential for penetrating demanding markets like the US and UK. For UPSC, this connects to the broader theme of manufacturing competitiveness and export-led growth under GS Paper 3.
Geographical
The geographical spread of India's export destinations reveals a strategic diversification of markets. While the US remains the dominant importer, the emergence of the UAE as the second-largest market points to strengthening trade ties in the Middle East, potentially aided by agreements like the signed with the UAE. Furthermore, the significant expansion of exports to Russia and other countries demonstrates an ability to navigate geopolitical complexities and tap into non-traditional markets. The entry into Latin American markets like El Salvador for flavored coffee indicates a growing global footprint. This spatial distribution is important for UPSC geography, focusing on trade patterns, the impact of geopolitical realignments on export destinations, and the strategic importance of emerging markets.
Governance
The success of the food processing sector highlights the efficacy of targeted government interventions in promoting industrial growth. The serves as a model for industrial policy, demonstrating how linking financial incentives to production outcomes can stimulate investment and boost exports. The reported investment of nearly ₹4,100 crore in the ready-to-eat segment over the past five years underscores the scheme's role in attracting private capital. Additionally, the ability of Indian exporters to overcome potential hurdles, such as American tariffs on certain items, suggests resilience and adaptability. From a governance perspective for UPSC, this case study is relevant for analyzing the design, implementation, and impact of schemes aimed at capacity building, enhancing export competitiveness, and fostering a conducive environment for the manufacturing sector.