Tier 2 and 3 Cities See Consumption Trends Aligning Across Urban And Rural India, Becoming Engines Of Economic Growth

New Delhi:India’s food processing sector is on a transformative growth path, and with consumption trends aligning across urban and rural India, tier 2 and 3 cities are fast becoming the engines of economic growth, according to a new report.

The sector supports over 7 million jobs across the value chain, directly and indirectly, while enabling rural industrialisation and reducing post-harvest losses.

According to the report by Deloitte and FICCI, the sector accounts for approximately 7.7 per cent of India’s total manufacturing GVA (gross value added), and its critical role in generating employment, fostering rural development and enhancing value addition.

The agriculture and food processing sector, representing nearly 30 per cent of the national food market, is gaining momentum due to rising rural demand, digital advancements and strong policy support.

“India’s agri and food processing sector is on the brink of a transformative leap, where tradition meets cutting-edge technology to build a future-ready food ecosystem. Consumer demand is shifting towards clean-label, protein-rich and gut-friendly foods, driving a structural evolution in how India consumes food,” said Anand Ramanathan, Partner and Consumer Industry Leader, Deloitte South Asia.

India is poised to lead the global narrative on health-driven, tech-enabled and inclusive food systems, fuelled by advancements in AI, IoT and blockchain.

The opportunity before us is not just to feed a billion, but to do so with purpose, resilience and intelligence, he added.

“India's food processing sector holds immense transformative potential, both as a driver of economic growth and as a catalyst for inclusive development. As evolving consumer preferences and health-conscious choices reshape food systems, the need for resilience, innovation and value addition has never been greater,” said Jyoti Vij, Director General, FICCI.

In addition, India’s record agricultural exports of $48.2 billion in FY24 and the global recognition of GI-tagged products highlight the sector’s export potential and its growing role in the world food economy.

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