The Ministry of Food Processing Industries (MOFPI), Government of India, continues to play a vital role in fostering the growth and development of the nation's food processing sector. While some scheme specifics may evolve, the core objective remains to encourage investment, enhance infrastructure, and boost the competitiveness of the industry.
As of July 2025, MOFPI is primarily implementing schemes under the umbrella of Pradhan Mantri Kisan SAMPADA Yojana (PMKSY), the Production Linked Incentive Scheme for Food Processing Industry (PLISFPI), and the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme. These are demand-driven schemes implemented across the country.
Key MOFPI Subsidy Schemes (as of July 2025)
1. Scheme for Creation of Infrastructure for Agro-Processing Clusters (APC)
This scheme, a component of PMKSY, aims to establish modern and efficient infrastructure for the food processing industry. It supports the formation of Agro-Processing Clusters (APCs), which provide common facilities and services to food processing units.
- Objectives:
- To create modern infrastructure closer to production areas.
- To link farmers and producers to processors and markets through well-equipped supply chains.
- To encourage a group of entrepreneurs to set up food processing units based on a cluster approach.
- Components: Basic Enabling Infrastructure (roads, water, power, drainage, ETP) and Core Infrastructure/Common Facilities (warehouses, cold storages, IQF, tetra pack, sorting, grading, etc.).
- Eligibility: Government/PSUs, Joint Ventures, NGOs, Cooperatives, SHGs, FPOs, Private Sector, individuals, etc.
- Financial Assistance: Up to 50% of the eligible project cost (and even higher for difficult areas, North Eastern Region, SC/ST promoters) with varying maximum limits (e.g., up to ₹10 Crore for NE, Hilly & Difficult areas).
- Key Requirements: Minimum 10 acres of land (owned or leased for at least 50 years), minimum investment of ₹25 Crore, and at least 5 food processing units within the cluster.
2. Creation/Expansion of Food Processing & Preservation Capacities (CEFPPC)
Also known as the "Unit Scheme" under PMKSY, this scheme focuses on creating and expanding processing and preservation capacities and modernizing/expanding existing food processing units.
- Objectives: To enhance processing and preservation capacities, reduce post-harvest losses, and increase value addition.
- Financial Assistance: Up to 35% of eligible project cost for general areas, and up to 50% for difficult areas (NE, Hilly, SC/ST, FPOs). Maximum subsidy can be up to ₹5 Crore per eligible project.
- Eligibility: Individuals, Proprietorship Firms, MSMEs, Public & Private Sector Companies, LLPs, Partnership Firms, Farmer Producer Organizations (FPOs), Self-Help Groups (SHGs), Cooperatives, SC & ST Entrepreneurs, Startups, and entities within Mega Food Parks (MFPs) or Agro Processing Clusters (APCs).
- Eligible Activities: Investment in technical civil works (factory buildings, processing units, cold storage infrastructure), plant & machinery (modern equipment, automation, packaging lines), utilities (DG sets, transformers, boilers, ETP), cold chain & refrigeration units, food safety & testing labs, packaging & storage facilities.
3. Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) Scheme
This is a Centrally Sponsored Scheme launched in June 2020 (extended up to FY 2025-26) with an outlay of ₹10,000 Crore, specifically targeting the unorganized micro food processing sector.
- Objectives:
- To enhance the competitiveness of existing individual micro-enterprises and promote formalization.
- To support FPOs, SHGs, and Producer Cooperatives along their entire value chain.
- To provide credit-linked subsidies for upgradation/setting up new units.
- To offer branding and marketing support.
- To provide seed capital and support for common infrastructure.
- Financial Assistance:
- Credit-linked capital subsidy of 35% of the eligible project cost, with a maximum ceiling of ₹10 Lakhs per unit. Beneficiary contribution is a minimum of 10% of the project cost.
- Branding and Marketing Support: Up to 50% of overall expenses for FPOs, Cooperatives, SHGs, or SPVs.
- Seed Capital: ₹40,000 per member of an SHG (up to ₹4 lakhs per SHG) for small tools and working capital.
- Approach: Adopts a "One District One Product (ODOP)" approach, focusing on specific products from each district to leverage economies of scale.
- Benefits: Increased access to credit, integration with organized supply chains, access to common facilities (laboratories, storage, packaging), and strengthening of institutions and training.
4. Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)
Approved in March 2021 with an outlay of ₹10,900 Crore for a six-year period (2021-22 to 2026-27), this scheme aims to support the creation of global food manufacturing champions.
- Objectives:
- To incentivize manufacturing of specific food product segments (Ready to Cook/Ready to Eat foods including Millet-based products, Processed Fruits & Vegetables, Marine Products, Mozzarella Cheese).
- To support innovative/organic products of SMEs.
- To promote Indian brands globally through branding and marketing support abroad.
- Incentives: Provides incentives based on incremental sales of manufactured food products and investments made.
- Branding & Marketing Support (for Indian brands abroad): Reimbursement of 50% of expenditure, capped at 3% of annual food product sales or ₹50 Crore per year (whichever is lower). Minimum expenditure of ₹5 Crore over five years is required.
Other PMKSY Components:
- Mega Food Parks: Large-scale integrated infrastructure facilities.
- Integrated Cold Chain and Value Addition Infrastructure: Support for comprehensive cold chain development.
- Creation of Backward and Forward Linkages: Plugging gaps in the supply chain for perishable produce.
- Food Safety & Quality Assurance Infrastructure: Setting up/upgrading food testing laboratories.
- Human Resources and Institutions: Support for R&D in the processed food sector.
- Operation Greens: Focused on stabilizing the supply of Tomato, Onion, Potato (TOP), and subsequently expanded to 22 perishable products.
General Steps to Avail MOFPI Schemes
- Familiarize with the Scheme: Thoroughly understand the specific scheme's objectives, eligible activities, and financial assistance levels.
- Check Eligibility: Ensure your company and proposed project meet all eligibility criteria, including business type, project location, and scale.
- Prepare a Detailed Project Report (DPR): This is a crucial step. The DPR should comprehensively cover the proposed project, infrastructure requirements, estimated costs, and anticipated impact on employment and the food processing sector.
- Secure Term Loan Sanction: For most capital subsidy schemes, obtaining a final term loan sanction letter from a scheduled bank, NABARD, SIDBI, or NEDFI is a mandatory prerequisite.
- Online Application and Submission: Applications are typically submitted online through the MOFPI's scheme management system (e.g., Smpada-mofpi.gov.in). All required documents (registration certificates, financial statements, land ownership/lease agreements, machinery quotations, etc.) must be uploaded accurately.
- Evaluation and Approval: Applications are evaluated by a Technical Committee (TC) and, if shortlisted, proceed to the Project Approval Committee (PAC) for final approval. A minimum score (e.g., 60% for general, 45% for SC/ST) may be required.
- Sanction Letter and Performance Security: Upon approval, a Sanction Letter is issued. The applicant may need to submit a Performance Security (Bank Guarantee) before project execution.
- Project Execution and Disbursement: Implement the project as per the approved DPR. Subsidy disbursement occurs in phases based on project progress and submission of required documents like Utilization Certificates (UCs) and audited expenditure reports.
Benefits of Participating in MOFPI Subsidy Schemes
- Financial Assistance: Significantly reduces the financial burden on businesses, encouraging investment and growth.
- Modern Infrastructure: Access to advanced and well-equipped infrastructure, leading to increased efficiency and productivity.
- Enhanced Competitiveness: Modernized infrastructure and shared facilities within clusters boost the competitiveness of individual units and the industry.
- Skill Development: Many programs support skill development, leading to a more skilled and employable workforce.
- Employment Generation: Creation of direct and indirect employment opportunities in both rural and urban areas, contributing to economic growth.
- Technological Upgradation: Encourages adoption of advanced technologies and practices, resulting in improved product quality and better market access.
- Reduced Wastage: Focus on cold chains and processing helps minimize post-harvest losses, benefiting farmers.
- Formalization: Particularly for micro-enterprises, schemes like PMFME aid in their transition into the formal sector, enhancing access to credit and markets.
Given the dynamic nature of government policies, it is crucial for interested businesses to consistently refer to the official MOFPI website (www.mofpi.gov.in) and its scheme portals for the most current guidelines, application deadlines, and any modifications to the programs.
