Unfortunately, some of the world’s poorest countries experience food shortages, not because of a lack of food, but because of flaws and inefficiencies in their supply chains.
India’s Food Supply Chain Issues
For example, as much as 20 to 40 percent of food grown in India spoils before reaching consumers. This includes millions of tons of fresh fruit and vegetables and wheat, all of which rot due to improper transport and storage.
According to Sanjeevan Bajaj, chief executive of the Quality Forum of the Federation of Indian Chambers of Commerce and Industry, the main issues with India’s food supply chain are supply chain bottlenecks, transport and storage.
What causes these supply chain bottlenecks?
- Too many intermediaries
- Lack of end-to-end logistics solution providers
- Underdeveloped cold chain infrastructure
- Poor roads and insufficient rail links, especially in more remote parts of the country
- Insufficient storage
- Government inefficiency
India also suffers from price volatility, caused by a lack of information channels, and scale challenges. Because the average farm in India measures just several acres, compared with hundreds in most developed countries, it’s prohibitive for farmers to invest in more efficient technology.
The country has been struggling to modernize its food supply chain and attract large-scale investment into cold storage, refrigerated trucks and other modern logistics, but in the meantime about half of Indian children under the age of five are chronically malnourished, resulting in stunted growth, while 20 percent suffer from acute malnutrition.
India’s Congress-led government has acknowledged the importance of attracting more private investment to modernize the country’s food-supply chain to reduce waste.
How might this impact the U.S. food processing industry?
After years of government interference and restrictions, India has become a small but growing market for imported consumer food products. Young, higher-income consumers are showing an interest in eating out and trying foreign cuisine, which includes consuming processed food products from America. India’s modern retail sector contains a core of professional importers who often attend major international food shows in search of new products—and the USDA has endorsed two annual food shows in India.
There are trade restrictions that limit the market for many U.S. food products in India, including meat, dairy and alcohol. But rising food prices and domestic shortages have forced the government to lower or completely eliminate taxes and fees on some essential food items such as edible oils, wheat and sugar
United States food exporters still face high tariffs, product bans and competition from domestic producers, but opportunities exist for certain products. The challenge will be dealing with the lack of existing cold chain networks and national suppliers that can deliver across different locations for various products.
At ZDA Supply Chain Recruiting, we’ve been saying for years that supply chain needs are becoming more global. Do you have what it takes to spearhead changes in another country? Contact us if you’d like to explore this opportunity!