To expand food processing capacity and support Indian brands to increase visibility in international markets, the Cabinet on Wednesday gave its nod to a Production-Linked Incentive scheme for the food processing sector with an outlay of ₹10,900 crore.

This scheme will be implemented over six years till 2026-27 and the government expects it to aid the expansion of production capacities to generate processed food output worth ₹33,494 crore.

This scheme aims to incentivise manufacturing of products in four segments — ready-to-cook and ready-to-eat, processed fruits and vegetables, marine products, and mozzarella cheese. Innovative or organic products of small and medium sized enterprises (SMEs) will also be eligible for this scheme. The government said that a portion of the subsidies has also been allocated to support branding and marketing activities of Indian brands to help them gain wider acceptance in international markets.

Addressing mediapersons on Friday, Union Minister Piyush Goyal said the implementation of the scheme will help create about 2.5 lakh jobs, ensure remunerative prices for farm produce and strengthen visibility of Indian brands in international markets.

Expression of Interest

Pushpa Subrahmanyam, Secretary, Ministry of Food Processing said that an Expression of Interest (EoI) will be issued by the end of April. Applicants will need to commit to minimum levels of investments and sales. If they meet these requirements, “for the incremental sales, a percentage of that amount will be given as subsidy in the following year.”

These conditions will not be applicable to SMEs in the innovative or organic food segment.

In a statement, ITC Chairman and MD, Sanjiv Puri said, “The PLI scheme will be a game changer in boosting food processing investments, agri-exports, farmer incomes and in building Indian brands for the global market.”

RS Sodhi, MD, GCMMF (Amul), said this will aid in building up Indian brands. “We are looking to invest in production capacities for making our unique buffalo milk-based mozzarella cheese for the domestic as well as international markets. We are awaiting more details.”

According to the official statement, the selected applicants will need to invest in plant and machinery in the first two years. Investment made in the 2020-21 will also to be counted for meeting the investment criteria and the maximum incentive payable to each beneficiary will be fixed at the time of approval, it added.