Delhi Private School

Sharjah

DEPARTMENT OF COMMERCE

ECONOMICS

This is to certify that this is the work of Susheel Hirani of

Class 12, Div.N, Roll No.18546. He/She has carried out
necessary practical work for the Senior Secondary School
Examination, AISSCE of CBSE under my supervision for the
academic year 2023 – 2024.

Teacher In-Charge:

External Examiner: Date:

 Economics Project

On

Food Supply Channel In India

Made by: Susheel Hirani

Grade 12-N

Delhi Private School,Sharjah

2023-24
 Acknowledgement
A Project is a golden oppurtunity for learning and
self-development. I consider myself fortunate and
privileged to have such wonderful mentors guiding
me through the journey for the completion of the
project.

My Sincere thanks to Ms.Vandana Marwaha, Our

Principal, for her relentless support and
encouragement.

My Heartfelt gratitude to my teacher,Ms.Hema

Narula, for her patience and belief in us. Her
exemplary investment in the complete process,
constant encouragement and insightful feedback
helped me achieve my objectives.

Lastly, I would like to thank my friends and family

members whose support helped me to complete the
project within the deadline.
 Table of Contents
1. Certificate
2. Cover Page
3. Acknowledgement
4. Introduction of Food Supply Channel in India
5. What is Food Supply Channel?
6. Food Processing Industry and the Retail Sector
7. Public and Private sector in the Food Supply Chain
8. Food Manufacturing
9. Agricultural Produce Marketing Committee Act
10. Cold Chain Supply
11. Distribution logistics in India
12. Challenges facing the retail sector
13. Using existing facilities more fruitfully
14. Supply chain Redesign
15. Agri service ecosystem in India
16. The Basic Ecosystem
17. Supply Chain Management
18. Conclusion
19. Bibliography
Introduction
Agriculture has been the backbone of the Indian
Economy since independence and before with nearly
12% of the world’s available land. India is the world’s
third largest producer of food grains, the second
largest producer of fruits and vegetables and the
largest producer of milk. It also has the largest
number of livestock. Food Industry plays an inportant
role in providing basic necessities for supporting
various human kind activities. Once harvested or
produced, food should be stafed, delivered and
retailed so that they could reach to the final
customers by the due date.
What is Food Supply Channel?
A Food Supply Channel refers to the process that
describe how food from a farm ends up on our
tables.The process includes
production,processing,distribution,storage,consumpt
ion and disposal.The food we eat reaches us via food
supply chains through which food moves in a
systematic order in domino like motion from
producers to consumers while the money which
consumers pay for food goes to people who work at
various stages along the food supply chain in the
reverse direction.Every step of the supply chain
requires the involvement of human and natural
resources.

“Processed food is more costlier than the Home

made food.”

Food Supply Chain is domine like when one part of

the food supply chain is being affected,the whole
food supply chain is affected which is more often the
reason in changes in prices of the food.
Challenges of the Food Supply Chain
 Up to 45% of food produced gets spoilt in the
supply chain.
 Only a mere 7% of perishable foods are being
processed.
 The Associated chambers of commerce estimates
that post harvest losses cost the country about
$14 Billion a year.

In order to have a global presence India’s food

supply chain needs to be agile,adaptive and
efficient.However,there are number of challenges in
this complex network with perishable food and a
number of small stakeholders with weak links
between them.Supply Chain inefficiencies have
disrupted the food sector.

Intermediaries:With no proper link between players

in the supply chain and with the presence of
intermediaries there is mistrust and this lowers the
product quality.
Standards:The absence of regulative authorities in
small and medium organizations might result in low
quality and unsafe products.

No demand supply drives:Consumer and consumer

behaviour is continously changing.

Subsidized Pricing:The involvement of third party

vendors results in increase of Prices.

Improper packing and Manual

handling:Quality,Safety and hygiene are being
compromised by unconventional packing and human
errors.

Lack of organized logistics:The poor infrastructure

and lack of cold chain infrastructure results in
delays and wastage.

Lack of adoption of Technology:End to end supply

chain visibility and optimization are missing.

An efficient food supply chain ecosystem overcomes

these challenges.A basic supply chain ecosystem
includes resources,supporting institutions,delivery
and infrastructure and supply chain integration.
Resources:India is widespread and geographically
well located.Proper sunlight and optimal climate
change over the area are best suitable for
agriculture therefore India has 51% cultivable
land,46 soil types and 20 Agro climate regions.

Institutions:APMC(Agricultural Produce Market

Committee) has a market place in every state which
is regulated and managed by the government.
Delivery and Infrastructure:Information Management
systems,multi model transportations,and cold
storage are some of the ways to manage
transportation effectively.

Supply Chain Integration:Supply chain is the path

that a product takes from sowing raw material to
reaching the final consumer.It involves all activities
like production,processing,transportation and
delivery.
Food Processing Industry and the
Retail Sector

100% FDI is allowed in the food processing sector

and incentives are offered to set up processing
plants in Agri Export zones or outside them.
A strong retail market should provide the necessary
boost to the agriculture and processing industry.

The Indian Government has been formulating

policies and measures regarding the same.

Some of the few are as follows:

National mission on food processing(NHFP) launched

by the Ministry of food processing industries(HOFPI)
focuses on working with state and district levels for
the national mission relating to
planning,monitoring,regulating their policies.

Relaxation of Foreign Direct Investment(FDI) norms

for the sector along with 100% FDI in the marketing
of food products through E-Commerce automatic
route.

The Food Safety and Standards Authority of

India(FSSAI) is working on investing in setting up
food testing infrastructure across the country.62
new mobile testing labs are to be installed along
with an upgrade of 52 testing laboratories.

The Ministry of Food Processing Industries(MOFPI)

has come up with Human Resource
Development(HRD).
PM Kisan Sampada Yojana aims at promoting
entrepreneurs in incorporating food processing units
closer to agricultural lands.It also helps in setting up
and development of warehouses,packing,storage and
transportations.

There are many more schemes like Operation

Green,PM formalization of Micro food processing
enterprises(PMFME),Production linked incentive(PLI).
Public and Private Sector in the
Food Supply Chain
Globalization in the food industry has forced players
in the organization to move into the production of
non-traditional agricultural products to diversify and
increase foreign exchange.India has a certain
geographical advantage in terms of producing
certain fruits and vegetables which have high value
in the export market.With an increase in demand for
safer products,protocols regarding
packing,operating,Traceability,Pesticide use
technology measuring contamination have also
increased.Demand in volume increases the need for
private and public sectors to work together.An
efficient supply chain would require both these
players to stick to their roles precisely.

Technical Support:The Public Sector should ensure

that knowledge specilized in technical support of
farming processes should be transferred to the
Private sector.Services and new technological
details have to be accessed by the Private sector.
Data Support:Information like the type of
product,price variation,demand and production are
exchanged.It is better to rely on public sector data
rather than market information.

Infrastructure Support:Timely delivery and smooth

flow of products depends on public infrastructures
like roads,public distribution etc… and Private
infrastructure like logistics,warehouse management
and processing.

Coordination Contracts:Enables quality in products

and manages competition in the marketplace
through developing agreements with the Private
Sector.
Food Manufacturing
 Conduct industry and market research
 Outline Finances
 Create the Right Packaging
 Ensure Regulatory Compliance
 Protect the Product
 Have Marketing Campaigns
Agricultural Produce Marketing
Committee Act
The APHC Act in each state of India requires all
agricultural products to be sold only in government
regulated markets.Under the present Act,the
processing industry cannot buy directly from farmers
and the farmers are also restricted from entering
into any direct contact with a manufacturer.
Food Manufacturing
Only a small percentage of fresh produce are
processes and as per post-harvest research,the food
products are at a very developing stage.

Disadvantages of Food Manufacturing

in India
 Food Packaging is expensive
 High import duties on processing and packaging
machinery
 High sales tax on packaged foods
 High protein goods are not available

Resource Shortage
There are no well designed hub and distribution
network in India and partly the taxation barriers
between states act as barriers to make the regional
distribution more efficient.
Cold Chain Supply
Cold Chain Supply is relatively a recently adopted
concept in the supply chain management.The
literature defines the Cold Chain Supply(CCS) or also
known as Cold Chain Management(CCM) as a
network of refrigerators,cold stores,refrigerated
trucks,freezers and cold boxes organized and
maintained so the right temperature to remain fresh
and intoxicated during their transportation,storage
and distribution from factory to the point of use.The
Cold Chain does not alter the essential
characterstics of the Produce or the Product
Handled.
Distribution Logistics in India
Distribution Logistics of the food supply in India is of
particular importance due to the country’s
demographics and culinary preferences. Ensuring
that food is delivered efficiently from producers to
consumers while maintaining quality, safety and
affordability is a difficult challenge.

India’s distribution systems of the Food Supply

Chain include the following:

The food supply chain in India can be highly

fragmented involving many intermediaries. This can
lead to longer supply chains and potential
inefficiencies. Due to the hot climate and the need to
transport perishables, maintaining a strong cold
chain system is essential which includes cold
storage and transportation as a distribution system
to prevent contamination of the food and maintain
the food safety. Food distribution patterns differ
significantly between urban and rural areas. Cities
tend to have better infrastructure which include
refrigerated warehouses and more efficient
transportation while the rural areas have to rely on
smaller production methods such as local markets
and smaller distributors. With the rise of online food
delivery, last mile delivery is becoming very
increasingly important. Companies need to optimize
routes and delivery times to ensure timely and
efficient deliveries to the customer’s doorstep. E-
commerce platforms and food aggregation have
disrupted traditional distribution systems by offering
direct-to-consumer food delivery options. These
platforms rely on advanced logistics technology to
manage the orders, keep up stock and make timely
deliveries to the customers as per the orders.
Challenges facing the Retail Sector
In terms of food supply,the retail sector faces many
challenges in India which arise from the country’s
demographics, resource constraints,regulatory
environment and changing consumer preferences.
These challenges affect the efficiency and the
effectiveness of food supply.

The major challenges faced by the retail sector

in India are as follows:

The food supply chain in India often involves multiple

intermediaries between manufacturers and retailers.
This fragmentation can lead to inefficiencies, lack of
transparency and high costs. Ensuring food quality
and safety throughout the supply chain is a major
challenge. Poor storage conditions, inadequate
hygiene practices and risk of contamination can
compromise the integrity of food products. The rise
of e-commerce platforms in the food retail sector has
introduced competition and the need for traditional
retailers to embrace online sales and home delivery
models. Reaching rural and remote areas with limited
infrastructure can be challenging. Retailers need to
design distribution strategies that cater to these
region’s unique requirements. The food retail sector
in India is subject to various regulations related to
food safety, labeling, packaging, and quality
standards. In addition to these regulations,it
requires continuous monitoring at all times.
Managing perishable goods such as fruits,
vegetables, dairy, and meat products requires
specialized infrastructure, temperature-controlled
transportation, and efficient stock management.
Without these,there is a risk of spoilage and wastage
but the retailers cannot afford such a high cost
infrastructure to keep the Perishable goods. The
Indian market is price-sensitive and the consumers
often seek value for money.The Retailers must
balance quality and affordability while managing
margins with the goods.
Using Existing Facilities More
Fruitfully
Take advantage of the vast network and logistical
capabilities of the existing institutions such a post
office,Road transport corporations,Bank etc… to
bring a host of services to rural population.Do not
wait for the infrastructure to be available.
Supply Chain Redesign
It is a dynamic process that requires a
comprehensive understanding of the organization's
strategic objectives, market trends, and operational
capabilities. By optimizing the supply chain,
businesses can enhance their competitive
advantage, improve customer satisfaction, and
achieve higher levels of operational efficiency. High
Performance supply chain efforts of stakeholders for
last two decades are highly risk prone.Tension
between weak and strong ties among chain
partners.Globalisation has created long supply chain
which are fragile and need monitoring. Designing
innovative last-mile delivery solutions is crucial in
India, where urban congestion and rural accessibility
issues impact timely and cost-effective delivery of
goods to customers. The growth of e-commerce in
India requires supply chain redesign to
accommodate the unique demands of online retail,
including order fulfillment, returns management, and
efficient inventory control. Customizing supply chain
operations to cater to regional preferences and
requirements can improve customer satisfaction and
minimize lead times. Engaging with local suppliers,
distributors, and logistics providers can help
optimize supply chain operations and mitigate
challenges related to regional variations.
Agri Service Ecosystem in India
The benefits provided by ecosystems to
humans.Many key ecosystem services provided by
Biodiversity such as nutrient cycling est regulation
and pollination sustain agricultural
productivity.Agricultural landscapes referred to as
agro ecosystems provide both marketable and non-
marketable ecosystem services,source of
livelihood,under employment,low agricultural
production and dominance of food crops. Agro
service ecosystem helps farmers connect with
markets, buyers, and value chains. This includes
creating platforms for direct market access,
reducing intermediaries, and improving price
realization for farmers. : Various government
schemes and programs provide subsidies,
incentives, and support to farmers encouraging
adoption of modern practices, mechanization, and
sustainable agriculture. Agricultural extension
services provide farmers with knowledge, advice,
and best practices related to crop cultivation, pest
management, soil health, irrigation, and more. These
services are often offered by government agencies,
agricultural universities, and non-governmental
organizations (NGOs). Agro service providers offer
inputs such as seeds, fertilizers, pesticides, and
machinery to farmers. Efficient distribution of these
inputs ensures timely availability and contributes to
crop yield enhancement.
The Basic Ecosystem
A supply ecosystem consists of an interconnected
network of organisations,people,activities,
information and resources that work together to
reach a common goal of moving a product from
supplier to customer in one way or another.India
which is a country of rich biodiversity consists of
variety of plant and animal species, both terrestrial
and aquatic. The diversity is influenced by factors
like climate, topography, and geographical location.
India experiences diverse climatic conditions,
ranging from tropical to temperate and arid to humid.
The climatic variations influence the distribution of
flora, fauna, and agricultural practices. The country's
extensive river systems, lakes, and wetlands play a
crucial role in supporting aquatic life, agriculture,
and human settlements. India’s long coastlines and
marine ecosystems are important for ecosystems,
fisheries, tourism and business activities. Cities and
urban areas are unique ecosystems with their own
dynamics, which affect air quality, water use, waste
disposal and biodiversity conservation. The
Himalayas and other mountain ranges help regulate
the country’s climate, water resources and
biodiversity, as well as support the local
communities. Communities often possess valuable
traditional knowledge about the local ecosystem
which can contribute to sustainable resource
management. India's arid regions have adapted flora
and fauna that can survive in harsh desert conditions
as well. The vast agricultural lands of India support
food production, with different regions specializing in
various crops due to varying soil types, climate, and
water availability. India's forests are home to a wide
range of flora and fauna. They provide habitats for
numerous species, contribute to carbon and offer
resources like timber and non-timber forest
products.
Supply Chain Management
Supply chain management in India involves the
planning, coordination, execution, and optimization
of various processes and activities that ensure the
efficient flow of goods, services, and information
from suppliers to consumers. Given India's vast
geographical expanse, diverse market conditions,
and regulatory complexities, effective supply chain
management is essential for businesses to meet
customer demands, minimize costs, and remain
competitive. Effective supply chain management in
India requires a deep understanding of local
conditions, adaptability, collaboration with partners,
and the use of technology to streamline operations
and enhance customer satisfaction. Companies that
can navigate the unique challenges while
capitalizing on opportunities stand to gain a
competitive edge in the Indian market.India's
transportation infrastructure varies widely,
impacting distribution timelines and costs. Balancing
road, rail, air, and water transport is crucial to
ensure timely and cost-effective delivery. Given
India's diverse climate and perishable nature of
products, proper warehousing, including cold
storage, is vital to maintain product quality and
safety. Navigating India's complex regulatory
environment, including taxes, duties, and state-level
regulations, requires careful planning to ensure
smooth movement of goods across state borders.
The growth of e-commerce has transformed supply
chains, leading to the need for efficient order
processing, reverse logistics, and meeting customer
expectations for timely deliveries. Increasing
awareness of environmental concerns requires
supply chains to incorporate sustainable practices,
such as reducing carbon emissions, minimizing
waste, and promoting responsible sourcing. Policies
like the Goods and Services Tax (GST) and "Make in
India" campaign have influenced supply chain
strategies, encouraging localized production and
efficient tax management. Incorporating technology
like advanced tracking systems, Internet of Things
(IoT) devices, and supply chain management
software enhances visibility, traceability, and real-
time information sharing. Accurate demand
forecasting is critical in a market with varying
consumer preferences. Businesses must leverage
data analytics, historical trends, and market insights
to predict demand accurately. Developing strong
relationships with reliable suppliers is essential to
ensure timely and quality raw material procurement.
Efficient inventory management helps balance
supply and demand, reduce excess inventory and
minimize stockouts. Strategies like just-in-time
inventory and safety stock levels are commonly
used.
Conclusion
The supply chain involves farmers seeds ,producers,
fertilizer factories, financial institutions like
Millers,Governments,Warehouses.Fair price
shops,retail shops,railways,truck transport
companies etc…Also,it could be given to poor strats
of the society in low prices which they can afford
called Issue price which is usually less than the
Market.
Bibliography
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www.slideshare.net

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