The processing of fruits and vegetables is estimated to be around 2.2% of the total production in the country. The major processed items in the fruit and vegetable segment are fruit pulps and juices, fruit based ready-to-serve beverages, canned fruits and vegetables, jams, squashes, pickles, chutneys and dehydrated vegetables. Some recent products introduced in this segment include vegetable curries in retortable pouches, canned mushroom and mushroom products, dried fruits and vegetables and fruit juice concentrates.The fruits and vegetable processing industry is highly decentralized, and a large number of units are in the cottage, household and small-scale sector, having small capacities of up to 250 tonnes per annum. Since 2000, the food processing industry has seen significant growth in ready-to-serve beverages, fruit juices and pulps, dehydrated and frozen fruits and vegetable products, pickles, processed mushrooms and curried vegetables, and units engaged in these segments are export oriented.

The domestic industry has to change its preference in favour of processed foods. Consumption of value added fruits and vegetables are low compared to the primary processed foods, and fresh fruits and vegetables. The inclination towards processed foods is mostly visible in urban centers due to a high purchasing power.

A remarkable push can be given to this sector by strengthening linkages between farmers and food processors. The poor and weak linkage between farmers and markets, as well as, farmers and processing companies has brought about inefficiencies in the supply chain and encouraged the involvement of middlemen leading price rise to the products. The Government of India’s National Agriculture Policy envisages the participation of the private sector through contract farming and land leasing arrangements which not only assures supply of raw material for processing units, but also a market for agriculture produce, accelerate technology transfer and capital inflow into the agriculture sector.