Business EconomyPosted at: Dec 17 2025 3:09AM


PHDCCI calls for stronger budget push to revive Agri and food processing

New Delhi, Dec 16 (UNI) As India prepares for the upcoming union Budget, the PHD Chamber of Commerce and Industry (PHDCCI) has pitched for a decisive policy and investment push to strengthen agriculture, farmers' welfare, and the food processing sector, warning that structural gaps in taxation, trade policy and infrastructure continue to limit farmer incomes and value addition.
In its pre-Budget recommendations, the industry body has outlined a comprehensive reform agenda aimed at boosting rural demand, cutting wastage, improving export competitiveness, and creating non-farm employment across the agri value chain .
At the core of PHDCCI's proposals is a call for incremental public investment of 0.20 per cent of GDP—amounting to about Rs 0.66 lakh crore—towards agriculture, water, and rural infrastructure, including irrigation, cold chains, and agri-processing facilities.
According to the chamber, such spending has a high multiplier effect, as it directly raises farm incomes, supports seasonal and non-farm employment, and strengthens rural consumption, which remains a key driver of India's overall economic growth .
A major concern flagged by PHDCCI is the persistent underdevelopment of India's food processing ecosystem. Despite being one of the world's largest producers of fruits and vegetables, India processes barely 2 per cent of its fruit output, leading to annual wastage exceeding Rs 50,000 crore.
The chamber attributes this largely to distorted trade incentives, particularly the relatively low customs duty on imported fruit pulp and concentrates, which encourages beverage manufacturers to source raw material from overseas instead of Indian farmers .
PHDCCI has recommended a sharp increase in import duties on fruit and vegetable pulp and concentrates, proposing rates as high as 180 per cent where permissible, while also seeking stricter value addition norms under Free Trade Agreements (FTAs).
The chamber has raised concerns that FTAs with neighbouring countries are being used to route third-country fruit pulp into India at zero duty, undermining domestic farmers and processors. Revising value addition thresholds to at least 80% and linking duty-free access strictly to local sourcing, it said, would help correct the imbalance and revive demand for Indian produce .
On exports, the chamber has highlighted significant non-tariff barriers affecting India's processed food and dairy shipments, particularly to the European union and the UK. Blanket restrictions on Indian dairy ingredients, coupled with cumbersome certification requirements for products like ghee, are limiting access to high-value markets.
PHDCCI has urged the government to negotiate regulatory relaxations based on product processing standards and allow simplified, periodic health certifications for reputed exporters, instead of batch-wise approvals that raise costs and delay shipments .
The spices sector has also come under focus, with PHDCCI flagging regulatory bottlenecks that prevent India from fully capitalising on its cost advantage in value-added spice exports. Complex Standard Input Output Norms (SION) and short re-export timelines under the Advance Authorisation Scheme, it said, discourage blending and processing, forcing exporters to ship spices in whole form.
Simplifying norms, extending re-export timelines to 12 months, and easing documentation for accredited exporters could significantly expand India's share in global spice trade.
Beyond food processing, the chamber has called for broader reforms across agribusiness, including reinstating GST exemptions on agri-warehousing, removing GST on ocean freight for exports, easing compliance for commodity boards, and recognising government-tendered rice exports as export transactions rather than domestic sales.
These steps, it said, would reduce transaction costs and strengthen India's export competitiveness .
PHDCCI has also outlined a forward-looking agenda covering agroforestry, sustainable agriculture, carbon markets, farmer producer organisations (FPOs), and climate-resilient farming.
Measures such as easing transit rules for agroforestry species, promoting regenerative agriculture, enabling FPO participation in carbon markets, and supporting climate-smart farming could help diversify farm incomes while aligning agriculture with India's long-term climate goals .
Overall, the chamber's recommendations reflect growing industry consensus that India's agriculture and food processing sectors need coordinated policy support across investment, trade, and taxation.
With rural demand under pressure and global markets becoming more competitive, PHDCCI has stressed that timely reforms in the upcoming Budget could unlock value across the farm-to-fork chain, strengthen farmer incomes, and position India as a global hub for processed foods and agri exports .
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