Are Tier 2 and 3 Indian Cities Becoming Economic Growth Engines?
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Synopsis
Discover how tier 2 and 3 cities in India are evolving into vital economic growth hubs. A recent report reveals the transformative potential of India's food processing sector, driven by changing consumer trends and technological advancements.
Key Takeaways
- Over 7 million jobs supported by the food processing sector.
- The sector contributes 7.7% to India's total manufacturing GVA.
- Tier 2 and 3 cities are becoming key economic players.
- Growing consumer demand for health-focused foods.
- India's agricultural exports reached $48.2 billion in FY24.
New Delhi, May 22 (NationPress) India’s food processing sector is undergoing a significant transformation, and with consumption trends harmonizing across both urban and rural landscapes, tier 2 and 3 cities are rapidly emerging as pivotal engines of economic growth, as highlighted in a recent report.
This sector supports over 7 million jobs throughout its value chain, both directly and indirectly, while facilitating rural industrialization and minimizing post-harvest losses.
The report compiled by Deloitte and FICCI indicates that this sector contributes around 7.7 percent of India’s total manufacturing GVA (gross value added), underscoring its vital role in job creation, promoting rural development, and enhancing value addition.
With the agriculture and food processing sector accounting for nearly 30 percent of the national food market, it is gaining traction due to increasing rural demand, advancements in digital technology, and robust policy backing.
“India’s agriculture and food processing sector stands on the threshold of a transformative leap, where tradition intertwines with cutting-edge technology to create a future-ready food ecosystem. Consumer preferences are shifting towards clean-label, protein-rich, and gut-friendly foods, prompting a structural evolution in food consumption patterns in India,” stated Anand Ramanathan, Partner and Consumer Industry Leader at Deloitte South Asia.
India is set to take the lead in the global narrative on health-driven, tech-enabled, and inclusive food systems, propelled by innovations in AI, IoT, and blockchain.
The challenge ahead is not merely to feed a billion people but to do so with purpose, resilience, and intelligence, he emphasized.
“India's food processing sector possesses tremendous transformative potential, serving as both an economic growth driver and a catalyst for inclusive development. As consumer preferences evolve and health-conscious choices reshape food systems, the demand for resilience, innovation, and value addition has never been more critical,” remarked Jyoti Vij, Director General of FICCI.
Additionally, India’s historic agricultural exports reaching $48.2 billion in FY24 and the international acclaim for GI-tagged products underscore the sector’s export capabilities and its increasing significance in the global food economy.
Point of View
It is crucial to acknowledge the rapid evolution of tier 2 and 3 cities in India as economic powerhouses. This growth is not merely a regional phenomenon; it represents a significant shift in India's economic narrative, driven by innovation in the food processing sector and changing consumer preferences. These developments highlight the importance of resilience and adaptation in our ever-evolving economy.
NationPress
01/06/2025
Frequently Asked Questions
What role do tier 2 and 3 cities play in India's economic growth?
Tier 2 and 3 cities are becoming crucial economic growth engines, driven by the expanding food processing sector, which supports millions of jobs and fosters rural industrialization.
How does the food processing sector impact employment in India?
The food processing sector supports over 7 million jobs across its value chain, contributing significantly to both direct and indirect employment opportunities.
What are the key factors driving growth in India's food processing sector?
The growth is propelled by increasing rural demand, technological advancements, and strong policy support, making it a cornerstone of India's economic development.
