Policy

Know the guidelines for ‘Production linked incentive scheme for food processing industry’

Government of India has recently approved ‘Production Linked Incentive Scheme for Food Processing Industry’ for implementation during 2021-22 to 2026-27 with an outlay of Rs. 10,900 crore to support creation of global food manufacturing champions
Know the guidelines for ‘Production linked incentive scheme for food processing industry’
Know the guidelines for ‘Production linked incentive scheme for food processing industry’ (Representative Image: Shutterstock)

Ministry of Food Processing Industries (MoFPI), Government of India, has issued detailed operational scheme guidelines and has launched an online portal for‘Production Linked Incentive Scheme for Food Processing Industry’ (PLISFPI). Union Minister for Food Processing Industries, Narendra Singh Tomar launched and online portal for the beneficiaries.

Government of India has approved a new Central Sector Scheme namely ‘Production Linked Incentive Scheme for Food Processing Industry’ for implementation during 2021-22 to 2026-27 with an outlay of Rs. 10,900 crore to support creation of global food manufacturing champions commensurate with India’s natural resource endowment and support Indian brands of food products in the international markets.

Ministry of Food Processing Industries is inviting applications for availing sales based incentives and grants for undertaking branding and marketing activities abroad under the scheme from three categories of applicants:

Category-I: Applicants are large entities who apply for incentive based on sales and investment criteria. Applicant under this category could undertake branding and marketing activities abroad also and apply for grant under the scheme with a common application.

Category-II: SMEs applicants manufacturing innovative and organic products who apply for PLI Incentive based on sales.

Category-III: Applicants applying solely for grant for undertaking branding and marketing activities abroad.

Applicant for the Scheme shall be (i) Proprietary Firm or Partnership Firm or Limited Liability Partnership (LLP) or a Company registered in India (ii) Cooperatives; and (iii) SME and making an application for seeking approval for coverage under the scheme. Applicant may also include company applying on its own behalf and its subsidiary provided the applicant company holds more than 50 percent of the stock of its subsidiary and that none of such subsidiary companies is included in any other applicant company under the scheme; or marketing federation or apex level co-operatives applying on behalf of member unions or member cooperatives in the case of co-operatives. 

The sales based incentive under the scheme would be paid for six years from 2021-22 to 2026-27 on incremental sales over the base year. Base year for calculation of incremental sales would be 2019-20 for the first four years. For 5th and 6th years, the base year would be 2021-22 and 2022-23 respectively. Sales shall include sales of eligible food products manufactured by the applicants as well its subsidiaries and contract manufactures. Applicants will be extended grant at 50 percent of expenditure on branding and marketing abroad subject to a maximum grant of 3 percent of sales of food products or Rs 50 crore per year, whichever is less. The minimum expenditure for branding abroad shall be Rs. 5 crore over a period of five years.

Selection of applicant under Category-I will be based on their sales, exports, committed investment. Four product segment are proposed to be incentivised under the scheme such as ready to cook/ ready to eat (RTC/ RTE) including millet-based foods, processed fruits and vegetables, marine products and mozzarella cheese. Food products included for coverage and those excluded under various segments have been listed in the guidelines. Selected applicant must fulfil the minimum required sales growth rate criterion to become eligible for incentive.

Selection of SME applicants under Category-II and for innovative and organic products would be based on their proposal, uniqueness of the product and the level of product development among other criteria. Selection of applicant under category III for branding and marketing abroad would be based on the level of recognition of their brand, strategy and plan for production, sales, exports and branding of products in domestic and export markets.

Details regarding eligibility conditions, minimum investment, selection criteria and scale of incentives are covered in the operational guidelines. 

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