Food processing - 'A Sunrise sector'

India's food ecosystem offers enormous investment opportunities with stimulating growth in the food retail sector encouraging economic policies, and attractive fiscal incentives. Through the Ministry of Food Processing Industries (MoFPI), Government of India is taking all necessary measures to boost investments in the food processing industry in India. Some of the initiatives include:

  • Pradhan Mantri Kisan Sampada Yojana (PMKSY) aims at developing modern food processing infrastructure. PMKSY has been envisaged as a comprehensive package which will result in creation of modern infrastructure with efficient supply chain management from farm gate to retail outlet.
  • Pradhan Mantri Formalisation of Micro Food Processing Enterprises Scheme (PMFME) aims to enhance existing individual micro-enterprises in the unorganized segment of the food processing industry.
  • Production Linked Incentive Scheme for Food Processing Industry (PLISFPI) aims to boost domestic manufacturing, increase exports, while supporting food manufacturing entities with stipulated Sales and willing to make investment for expansion of processing capacity and branding abroad to incentivize emergence of strong Indian brands. The scheme is EoI bases.

India’s agricultural and processed food products exports were up by 13% to $ 19.69 bn in nine months of the current fiscal (2022-23) compared to the same period last year.

Click here to know more about Agro Processing Cluster Projects approved by MoFPI

Click here to know more about Mega Food Park Projects approved by MoFPI.

  • The total FDI received in the food processing sector from April 2000 till December 2022 was $11.79 Bn. The FDI equity inflow in the Food Processing Sector for the period of April 2021- March 2022 was $ 709.72 Mn. The total FDI equity inflow in sector from April 2000 to December 2022 is $ 11.79 Bn. 
  • By 2025 the Indian Food Processing market is estimated to reach $ 535 bn and growing at a compound annual growth rate of 15.2%. Tier-II and Tier-III cities could mirror the trend visible in metropolitan areas, by consuming more processed food in the coming years. 
  • India’s consumer spending to grow to $6 Tn by 2030.
  • India’s agricultural and processed food products exports were up by 13% to $ 19.69 bn in nine months of the current fiscal (2022-23) compared to the same period last year. India exported more than $ 2.14 Bn worth of final food products in 2020-21. The major destination of RTE export in 2020-21 data is the U.S.A, U.A.E, and Nepal. The major exporting destination for RTC export in 2020-21 are U.S.A, Malaysia, and U.A.E
  • India's sugar exports grow by 291% since 2013-14, Sugar exports exceed 10 Mn tons for the first time. Sugar exports rise by 64.90% during 2021-22 alone.
  • India’s non-basmati rice exports witnessed an astounding growth of 109 % from $2925 Mn in FY 2013-14 to $6115 Mn in FY 2021-22
  • Government aims to make India the Global Hub for 'Shree Anna' (Millets)

100% FDI is permitted under the automatic route in food processing industries in India.

100% FDI is allowed through the government approval route for trading, including through e-commerce in respect of food products manufactured or produced in India.

For further details, please refer FDI Policy

  • %

    % share of GVA of agriculture and allied sector to total economy

  • %

    Share in total employment

  • %

    Share in India's exports

  • %

    Cropping intensity

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Industry Scenario

India’s food processing sector is one of the largest in the world and its output is expected to reach $535 Bn by 2025-26.

The Food Processing sector in India has a quintessential role 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. The food processing industry has a share of 12.38% (at 3-digit of NIC classification) in the employment generated in all Registered Factory sector engaging approximately 1.93 Mn people. Unregistered food processing sector supports employment to 5.1 Mn workers as per the NSSO 73rd Round report. Major sectors constituting the food processing industry in India are grains, sugar, edible oils, beverages, and dairy products.

Under PMKSY, 41 Mega Food Parks, 376 Cold Chain projects, 79 Agro-Processing Clusters, 489 proposals under Creation/Expansion of Food Processing & Preservation Capacities (CEFPPC), 61 Creation of Backward and Forward Linkages Projects, 52 Operation Green projects, 183 Food Testing Laboratories projects have been approved across the country.

The key sub-segments of the Food Processing industry in India are Fruits & Vegetables, Poultry & Meat processing, Fisheries, Food retail, dairy industry, etc.

Key facts:

  • The total horticulture production is estimated to be 342.33 Mn tonnes in the year 2021-22, showing an increase of about 7.73 Mn tonnes (an increase of 2.3%) over the year 2020-21 (final)
  • India ranks 1st in Milk production and the total milk production in the country during 2021-22 is 221.06 Mn tonnes. In the year 2021-22, the milk production has registered an annual growth rate of 5.29%
  • In 2021-22, the total egg production in the country is 129.60 Bn which have increased by 6.19% as compared to the previous year
  • The fish production in 2021-22 is 16.24 Mn Tonnes comprising of marine fish production of 4.12 mn Tonnes and 12.12 Mn Tonnes from Aquaculture
  • Online grocery retail in India has seen a CAGR of over 50% and projected to grow to $10 Bn to 12 Bn by 2025.
  • Seafood products export from India during the last three years has increased from $ 6679 mn in FY 2019-20 to an all-time high record figure of $ 7759.58 mn in FY 2021-22. Exports to these three countries contributed 63% of exports.
  • The export of other cereals recorded a growth of 13.64% in nine months of the current fiscal.
  • Other cereals’ exports increased from $764 Mn in April-December 2021 to $ 869 mn in April-December 2022 and the export of milled products increased from $188 Mn in April-December 2021 to $255 Mn in April-December 2022—registering a growth of 35.71 % in the nine months.
  • The total meat production in the country is 9.29 Mn tonnes for the year 2021-22 with an annual growth rate of 5.62%. The total five major meat producing States are Maharashtra (12.25%), Uttar Pradesh (12.14%), West Bengal (11.63%), Andhra Pradesh (11.04%), and Telangana (10.82%)
  • As per 4th advance estimates, the estimated production of rice is 130.29 Mn Tonnes, Wheat is 106.84 Mn Tonnes, and Nutri/Coarse cereals is 50.90 Mn Tonnes for the year 2021-22.
  • During Sugar Season (SS) 2021-22, India exported 110 LMT sugar and became second largest exporter of sugar in the world and earned about INR 40,000 Cr worth of foreign exchange for the country.
  • Non-Basmati Rice has emerged as India’s top export item among the many agricultural and processed food product exports under APEDA basket, with the export of $4,663 Mn in nine months of 2022-23.


  • Agri-commodity hub

    Largest producer of several agri-commodities

  • Huge consumer base

    1.3 Bn consumers with increasing demand for branded food

  • Strong economy

    India is the fastest growing largest economy in the world

  • Conducive policies

    Proactive government policies with attractive fiscal incentives

  • One District, One Product (ODOP)

    Under ODOP scheme, 713 districts have been identified. across the country


Production Linked Incentive (PLI) Scheme

The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in Food Products for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat. Under the PLI Scheme for Food Processing Industry, a total of 182 applications have been approved under different categories including 30 applications (8 large entities and 22 SMEs) under the PLI Scheme for Millet Based products. The implementation of PLI scheme is likely to facilitate expansion of food processing capacity by nearly INR 30,000 crore and create additional direct and indirect employment opportunities for about 2.5 lakh persons by the year 2026-27. As per the data being reported by the PLIS beneficiaries, investment of about INR 4900 Crores has been made under the Scheme.

  • INR 10,900 Cr

    Scheme Outlay

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Asked Questions

Who can be an Applicant under PLI scheme for Food Processing Industry?

Applicant for the purpose of the Scheme shall be

  • Proprietary Firm or Partnership Firm or Limited Liability Partnership (LLP) or a Company registered in India
  • Co-operatives
  • SME and making an Application for seeking approval for coverage under the Scheme.

The applicant may include a company applying on its own behalf and its subsidiary(/ies) provided the Applicant company holds more than 50% of the stock of its subsidiary(/ies) and that none of such subsidiary company(/ies) is included in any other Applicant company under the Scheme.

Marketing Federation or Apex level co-operatives can also apply on behalf of Member Unions or Member co-operatives in the case of co-operatives.

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Whether transportation by individual farmers from their farm gate to the Mandies in the production clusters, which meets the minimum distance of 100 KM requirement, is eligible for subsidy under Operation Greens Scheme?

Transport within the clusters is eligible subject to meeting of minimum distance criteria for all category of applicants.

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Whether single railway receipt, which is being issued against transport of crops by few farmers together, can be accepted as supporting documents for subsidy claim under Operation Greens scheme?

Usually entire rack consisting of 40 wagons is booked by one party, which aggregate the crops from different transporting parties. Railway allows only one name for sender and therefore, only one name for consignee appears in Railway Receipt. In such case, we can accept the claim with the following supporting documents:

  • Agreement/MoA between the applicant and the consignee as per RR showing the crops details, proportionate payment towards railway freight, including bank details;
  • Transaction voucher – Demand raised by consignee as per RR to the applicant for payment of proportionate freight amount;
  • Bank Statement showing payment to consignee as per RR;
  • Duly counter signed copy of RR (signed by Consignee & Applicant, both)

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Whether names and Aadhar number of each and every farmer from whom crop has been procured is to be entered into the Online Application Form (under Operation Greens scheme)?

Applicant can enter the details of major 10 farmers and upload the list of farmer’s detail on the Online Application Form as pdf file

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What activities can be supported related to animal feed?

Establishment of Animal Feed manufacturing and strengthening of existing units/ plant of the following categories:

  • Establishment of Mini, Medium and Large Animal Feed Plant
  • Total Mixed Ration Block Making Unit
  • By pass protein unit, Mineral Mixture Plant
  • Enrich Silage making unit, Animal Feed Testing Laboratory
  • Any other activities related to animal feed manufacturing.



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