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After India’s economic liberalization and Dubai’s emergence as a regional trading hub, foreign trade and investment experienced substantial growth
Representative Picture
India’s food sector has experienced exponential growth in recent years, solidifying its position as a crucial driver of the nation’s economic resilience. Indian agricultural and food exports have significantly contributed to this growth, fostering strategic collaborations with various countries and stimulating investment. India’s longstanding bilateral trade relations with the United Arab Emirates (UAE), which intensified following the UAE’s unification in 1971, have led to increased Indian exports and the establishment of diplomatic ties between the two nations.
After India’s economic liberalization and Dubai’s emergence as a regional trading hub, foreign trade and investment experienced substantial growth. This culminated in the India-UAE Comprehensive Economic Partnership Agreement (CEPA), designed to enhance economic ties between the two nations through measures such as eliminating technical barriers, reducing customs duties, collaborating on critical technologies and sectors, and ensuring food security.
This marks a new era for the food sector, as the CEPA has unlocked new opportunities for businesses to capitalize on the bilateral partnership. It has fostered deeper economic integration, paving the way for increased investment flows and collaboration across various sectors.
According to data, India’s exports to the UAE during the 2023-2024 period amounted to USD 36 billion, while imports from the UAE to India reached USD 48 billion. Notably, although food and related products currently constitute only 3% of India’s exports to the UAE, there is substantial potential for growth in this sector.
The UAE’s significant investments in India’s food sector, combined with both nations’ commitment to strengthening their partnership, indicates a future where food and agriculture will assume a pivotal role in bilateral trade.
Paving The Way For Heightened Strategic Collaboration
India and the UAE share a symbiotic relationship in the food sector, fostering strategic and deeper collaboration. As the world’s second-largest food producer, India has emerged as a critical global food supplier. The nation’s robust agricultural sector, coupled with a burgeoning food processing industry, is a significant driver of economic growth.
Conversely, the UAE, a major food importer, is actively pursuing enhanced food security within the region. This shared objective underscores the significance of the India-UAE partnership. Additionally, India’s ‘Look West’ policy, a strategic initiative to deepen ties with the Arab world, has been a cornerstone of its foreign policy. In this context, the development of the India-Middle East-Europe Economic Corridor (IMEC) is pivotal to streamlining trade between India, the Middle East, and Europe.
As a global food leader, India stands to benefit significantly from the IMEC corridor. This strategic infrastructure upgrade will not only bolster food exports by developing dedicated export infrastructure but will also substantially reduce transit time to Europe. By investing in production and logistics, countries participating in the IMEC can further stimulate the growth of India’s food sector. The operational corridor will ultimately expand market access for Indian food products and enhance the country’s export diversification capabilities.
Similarly, related sectors such as food processing and cold storage stand to benefit from strategic partnerships between India and the UAE. Such collaborations can potentially revolutionize these sectors through shared best practices, enhanced operational excellence, and increased capital investments.
The UAE’s food processing industry is a dynamic and rapidly growing sector, driven by significant public and private investments, strategic geographic location, and excellent infrastructure. This sector is undergoing a transformative phase, presenting numerous opportunities for both domestic and international investors.
On the other hand, India’s food processing sector is still in its nascent stages, accounting for approximately 1.8% of the total gross value added. Serving as a crucial link between farmers and consumer markets, the sector can leverage India’s vast resource base. The growing global demand for Indian food products, particularly in the UAE and Arab world, presents a significant opportunity for India’s food processing sector. Data suggests that the market size of India’s food processing sector is projected to grow from USD 866 billion in 2022 to USD 1,274 billion by 2027. This paints a vivid picture of the future potential and highlights how strategic collaboration with the UAE can create a win-win situation for both nations.
Additionally, the Ministry of Food Processing Industries (MoFPI) has permitted 100% Foreign Direct Investment (FDI) under the automatic route in food processing industries to stimulate investment and enhance productivity in the food processing sector. Furthermore, 100% FDI is allowed through the government approval route for trading, including e-commerce, concerning food products manufactured and/or produced in India.
In this context, real estate, through advanced logistics facilities, cold storage solutions, and food parks, is proving to be essential in sustaining and amplifying this momentum. This foundational role of real estate in the food sector sets the stage for a deeper exploration into how infrastructure investment will reshape India’s food landscape.
Real Estate Infrastructure As A Catalyst For Future Growth
At the core of India’s expanding food sector lies real estate infrastructure, which is integral to facilitating seamless end-to-end food processing and distribution. Initiatives like the Pradhan Mantri Kisan SAMPADA Yojana, particularly through Mega Food Parks (MFPs), exemplify how structured infrastructure investments can optimize food processing. These food parks consolidate warehousing facilities, cold storage, and processing units, creating a unified network that shortens farm-to-retail times, maintains product freshness, and minimizes spoilage. The Ministry of Food Processing Industries (MoFPI) has approved 41 mega food park projects. Currently, 24 of these parks are operational, with the remaining 17 under implementation.
Moreover, the establishment of food hubs in rural regions has facilitated regional supply chains, making large markets more accessible to farmers. This expansion has not only improved profitability but also promoted financial security for smallholders, strengthening the agricultural foundation of these communities. Real estate investments in food parks and logistics centers are also stimulating economic development in underdeveloped areas, creating employment hubs and offering diverse job roles beyond logistics. This growth in local employment has helped uplift rural economies and empower communities, establishing a robust base for sustained sector expansion.
India’s expanding food sector is closely tied to its evolving logistics infrastructure, bolstered by initiatives like the GatiShakti National Master Plan and the National Logistics Policy. These efforts aim to streamline connectivity across highways, railways, and ports, reducing transit times and enhancing farm-to-market access.
A notable example is the development of dedicated freight corridors, which facilitate the speedy transportation of grains and perishable food items with shorter shelf lives. These corridors enhance efficiency and ensure product quality, significantly reducing spoilage during transit. Additionally, specialized industrial zones and food corridors further optimize supply chains, promoting food security while cutting logistical costs.
Real estate developers are crucial in this transformation, building cold storage facilities and logistics hubs that support employment and economic growth. By consolidating these efforts, India is not only improving operational efficiency but also laying a strong foundation for sustainable growth in its food sector.
The Way Forward
As India’s food sector grows, key investment opportunities emerge within cold storage, food processing, and advanced logistics—areas essential for enhancing food security and reducing waste. The demand for cold storage facilities continues to rise, aligning with India’s objectives to ensure year-round food supply and reduce post-harvest losses. Private sector participation is imperative to the development of cold chain infrastructure in the country. Investing in, developing, and operating these facilities would encourage the entire value chain to modernize and increase the effectiveness of this asset class.
Due to the limited supply of quality cold storage warehouses in India and growing demand from key sectors, investment firms are expected to invest in cold storage real estate projects, particularly in terms of investment, technology, and sustainable practices. In this context, strategic collaborations with the UAE will provide India access to advanced AgriTech and climate-resilient agricultural practices, further bolstering India’s food supply chain resilience and efficiency. Such partnerships will introduce critical technologies—such as advanced tracking systems in logistics and water-efficient agricultural techniques—across the food sector. These improvements will reduce food waste, streamline operations, and ensure consistent product quality from farm to consumer.
As India-UAE collaboration accelerates, India’s food infrastructure will gear up to meet regional food security needs. Through cross-border investments, foreign stakeholders supporting projects like cold storage and multi-modal logistics parks will stabilize food availability even amid market disruptions or environmental challenges.
This is authored by Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE
