PLI scheme to revolutionise food processing in India

In a recent boost to the food processing industry, the Cabinet chaired by PM Shri Narendra Modi approved a production linked scheme with a financial outlay of US$ 1.49bn.

April 1, 2021

The PLI scheme will be a radical change in boosting exports, farmer incomes and in promoting Indian brands internationally.

It will increase the generation of processed food output of US$ 4.56bn and will also create employment for 250,000 people by 2026-27.

The Food & Grocery retail market in India is the 6th largest in the world which constitutes almost 65% of the total retail market in India.

The scheme is extended to ready-to-eat and ready-to-cook foods, mozzarella cheese, marine products, fruits, and vegetables etc.

Bolstering investment and growth in the food processing sector, a Production Linked Incentive (PLI) scheme has been approved by the Union Cabinet, chaired by Hon’ble Prime Minister Shri Narendra Modi. This move will fuel growth in companies like ITC and Nestle India and promote Indian brands on the global platform. This approved PLI scheme for Food Processing Industry (PLISFPI), with an outlay of US$ 1.49bn, will prove to be revolutionary in boosting food processing investments, agri-exports, farmer incomes and in promoting Indian brands internationally. 

The aforesaid PLI scheme aims to support food manufacturing bodies with designated minimum Sales and who are willing to invest in augmenting their processing capacity and to market themselves on a global platform, thereby significantly contributing to value addition and reduction in food wastage.  The PLI scheme will facilitate the creation of modernised infrastructure with efficient supply chain management from the farms where they are produced right to the retail stalls, thereby ensuring profitability and higher income to farmers. It also aims at helping farmers get better prices for their produce and reducing food wastage and is a step towards building an Atmanirbhar Bharat. Implemented over a period of six years, from 2021-2022 and 2026-2027, not only will this increase the capacity to generate processed food output of US$ 4.56bn but will also create employment for almost 250,000 people by 2026-27. The incentives provided under this scheme will be extended to products like ready-to-eat and ready-to-cook foods, mozzarella cheese, honey, marine products, fruits, and vegetables, ghee and some varieties of eggs and poultry. Being fund-limited, the scheme will be restricted to the approved amount. The maximum incentive payable to each beneficiary will be fixed in advance, at the time of approving the beneficiary.

Food processing sector, a sunrise sector, offers immense opportunities for investments with stimulating growth in the food retail sector, favourable economic policies, and attractive fiscal incentives. The Food & Grocery market in India is the 6th largest in the world. The Food & Grocery retail market in India further constitutes almost 65% of the total retail market in India. Food processing has an important role to play in linking Indian farmers to consumers in the domestic and international markets. The Ministry of Food Processing Industries (MoFPI) is making all efforts to encourage investments across the value chain.