New Delhi, Feb. 4: India Inc has demanded tax relief for research and development (R&D) in the food processing sector.

The Federation of Indian Chambers of Commerce and Industry (Ficci) said it wanted the government to give a 10-year tax holiday on cold-chain infrastructure, under section 80-IA of the Income Tax Act, and weighted 150 per cent deduction on R&D expenditure. India is the world’s second largest producer of processed food after China. The sector is set to grow at the rate of over 10 per cent annually due to high consumer demand, organised distribution and policy initiatives by the government.

Proposing fiscal measures, the industry sought customs duty exemption for manufacturing establishments and a uniform value-added tax (VAT) for processed foods. Availability of transport subsidy all over the country and speedy implementation of the food safety and standards act were the other measures required, an annual survey conducted by the chamber stated.

Ficci had conducted a nationwide survey, involving 47 companies across sectors such as dairy, confectionery, bakery, wine, fruits and vegetables, meat, poultry and marine food. The study revealed that the sector was crucial to India’s economic development as it establishes a vital linkage between agriculture and consumer.

Processed food consumption in India is estimated at Rs 460,000 crore. However, the level of processing and value addition is significantly lower than that in developed countries and many developing countries, the survey said.