The Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) was approved by the Union Cabinet on 31st March 2021 with a budget of ₹10,900 crore, to be implemented from 2021-22 to 2026-27. 171 applicants have been enrolled under the scheme. The beneficiary selection process under PLISFPI was conducted as a one-time exercise, preceded by active stakeholder engagement and extensive publicity to ensure broad participation.
By mandating the use of domestically grown agricultural products (excluding additives, flavors, and edible oils) in the manufacturing process, the scheme has substantially increased local raw material procurement, benefiting underdeveloped and rural areas while supporting farmers’ incomes. Furthermore, the emphasis on local production of raw materials for processed food has generated additional off-farm employment opportunities, significantly contributing to the economic development of rural regions.
The scheme has significantly contributed to the country’s overall growth and development by scaling up domestic manufacturing, enhancing value addition, boosting the domestic production of raw materials, and creating employment opportunities. The scheme supports large companies, millet-based products, innovative and organic products, as well as small and medium enterprises, while also promoting Indian brands globally. According to data reported by the scheme’s beneficiaries, an investment of ₹ 8,910 crore has been made across 213 locations. As of 31 October 2024, the scheme has reportedly generated employment of over 2.89 lakh.
The Government actively supports Small and Medium Enterprises (SMEs) in the food processing sector through schemes like Pradhan Mantri Kisan Sampada Yojana (PMKSY), Production Linked Incentive Scheme for Food Processing Industries (PLISFPI), and the Pradhan Mantri Formalization of Micro-food processing Enterprises (PMFME) scheme. These schemes provide financial, technical, and marketing support to SMEs, facilitating capacity expansion, innovation, and formalization. SMEs are also eligible to avail the benefits under various components of the PMKSY Scheme. PMFME scheme specifically targets formalization of unorganized units, improving their access to institutional credit, modern infrastructure, and enhanced food processing capacity. Under the PLI scheme, a significant proportion of beneficiaries are MSMEs, with 70 MSMEs directly enrolled and 40 others contributing as contract manufacturers for larger companies. Collectively, these initiatives have strengthened SMEs by fostering innovation, improving competitiveness, expanding market access, generating employment opportunities, and supporting the broader value chain in the food processing industry.
Under the Production Linked Incentive Scheme for Food Processing Industries (PLISFPI), the Government provides financial incentives to promote Indian food brands abroad, supporting branding and marketing activities for Indian-branded consumer food products in global markets. Beneficiaries are reimbursed 50% of their expenditure on branding and marketing abroad, capped at 3% of their annual food product sales or ₹50 crore per year, whichever is lower. Applicants are required to spend a minimum of ₹5 crore over five years to qualify. Currently, there are currently 73 beneficiaries under this component of the PLI scheme.
Pattern of assistance under PLI scheme:
i. The beneficiary should achieve minimum year on year sales growth of 10% for claiming incentive under Category-I, Category-II and Millet-Based Products components of the Scheme. Under Category -I component, the companies have to make committed investments to increase their production capacities. If a company does not make the committed investment up to end of 2023-24, it is not eligible to receive incentives under the Scheme.
ii. Under Category-III, i.e., Branding and Marketing component, a company is eligible for financial incentives @ 50% of expenditure incurred on Branding & Marketing abroad subject to a maximum of 3% of Sales of food products or Rs 50 crore per year, whichever is less. The minimum expenditure should be Rs. 5 crore over a period of five years. (PIB)