Reasons To Invest

Largest producer of fruits such as Mangoes, Bananas, Papaya, and Guavas.
Second largest producer of vegetables such as Onions, Potatoes, Green peas, Tomatoes, Cabbage, and Cauliflower.
The major export destinations for Indian fruits and vegetables are Bangladesh, UAE, Netherlands, Nepal, Malaysia & UK.

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FDI Norms

100% FDI is allowed under the Food Processing Sector. Moreover, this sector attracted over $10.37 bn of FDI during April 2000 - March 2021.

FDI Allowed

Did you Know?
The food processing sector was opened to 100% foreign direct investment in 2016 under the automatic route. Further, in 2017, 100% FDI under the Government route for retail trading, including through e-commerce, is permitted in respect of food products manufactured and/or produced in India.

Government Support


As per the latest revision in the GST rates, of the all food categories taken together under different chapter heads/subheads, 36% of the food items have been exempted from GST (0%) and 37% of the food items shall attract GST of 5%. Hence, almost 73% of the food items are under lowest tax slab of 0% or 5%.

Income Tax

100% exemption to food processing units on profit for the first 5 years and 25 percent (30 percent in case of companies) for next 5 years.
100% deduction permitted on capital expenditure for cold chain or warehouse.

Custom Duty

All goods related to Food Processing, imported as part of the Project Import, irrespective of their tariff classification, are entitled to uniform assessment at concessional basic customs duty of 5%. Concessional 5% Basic Customs Duty (BCD) available under project imports for cold storage, including pre-cooling unit, pack houses, sorting and grading lines and ripening chambers. Customs duty reduced from 10% to 5% for refrigerated containers. Exemption of import duty for Import of Raw material/Intermediate Food Items against the export of finished products under advance authorization scheme of the Department of Commerce.


A special fund of INR. 2000 crore has been set up in National Bank for Agriculture and Rural Development (NABARD) to provide credit at affordable rates to boost food processing sector.  Loans are extended up to 95% of the eligible project cost for entities promoted by the State Governments while other categories of promoters are extended loans up to 75% of the project cost.

Trade Scenario

In April-June 2020-21, fresh fruits and vegetables worth $584.5 million were exported rising to $637.7 million in April-June 2021-22. During 2018-19, India exported fruits and vegetables worth $1,469.33 mn which comprised of fruits worth $692.01 mn and vegetables worth $777.25 mn.

India is also a major exporter of fruits to the world. The country has exported 4,96,577.72 MT of fresh fruits other than Grapes and Mango to the world for the worth of 288.07 USD Millions during the year 2019-20. Major Export Destinations (2019-20): U Arab Emts, Bangladesh Pr, Iran, Nepal, Oman.
Further, India is also a prominent exporter of fresh mangoes to the world. The country has exported 49,658.68 MT of fresh mangoes to the world for the worth of 56.11 USD Millions during the year 2019-20. Major Export Destinations (2019-20): U Arab Emts, U K, U S A, Oman, Qatar
Also, Grape is one of the important fruit covering an area of 123 thousand hectares occupying 2.01 % of the total area. The country is also a major exporter of fresh Grapes to the world. The country has exported 1,93,690.55 MT of Grapes to the world for the worth of 298.05 USD Millions during the year 2019-20. Major Export Destinations (2019-20): Netherland, Russia, U K, Bangladesh Pr, Germany.

Major Investors

Product Profiles

India is the second largest producer of onion in the world. Indian onions are famous for their pungency and are available round the year. Indian onions has two crop cycles, first harvesting starts in November to January and the second harvesting from January to May.
The major varieties of onions found in India are Agrifound Dark Red, Agrifound Light Red, NHRDF Red, Agrifound White, Agrifound Rose and Agrifound Red , Pusa Ratnar, Pusa Red, Pusa White Round. There are certain varieties in yellow onion which are suitable for export in European countries Tana F1, Arad-H, Suprex, Granex 55, HA 60 and Granex 429.
There is a lot of demand of Indian Onion in the world, the country has exported 11,49,896.85 MT of fresh onion to the world for the worth of Rs. 2,320.70 crores/ 324.20 USD Millions during the year 2019-20. Major Export Destinations (2019-20) :Bangladesh Pr, Malaysia, U Arab Emts, Sri Lanka Dsr, Nepal.
Moreover, Modern packhouses for sorting, grading and packing of the quality onions are available at production zones. Guidelines has been framed to determine the compliance with maximum residue levels (MRLs) for the identified pesticides.

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What types of industries/units are permitted in Mega Food Park?

Only food processing industries/units that make food products fit for human and animal consumption are permitted to be set up in the Mega Food Parks. Packaging facilities of food products as ancillary to the food processing industries will also be eligible for setting up in the Mega Food Parks. However, setting up of alcoholic beverage unit as an anchor unit will not be allowed.

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For Mega food park, does the land needs to be changed from Agricultural to Industrial?

Yes, it is mandatory to have Change of Land Use (CLU). CLU is not required in case the land is already in a designated industrial area.

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What is minimum land requirement for setting-up Mega Food Park?

The minimum land required for setting-up a Mega Food Park is 50 acres of contiguous land and free from any kind of encumbrance. The selection of land needs to be justified in terms of connectivity and availability of basic infrastructure such as approach road, power, water etc. as also in terms of availability of raw materials/market.

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How much Foreign Direct Investment is allowed in food processing sector?

a) 100% FDI is permitted under the Automatic route in food processing industries

b) 100% FDI is allowed through Government Approval route for trading, including through e-commerce in respect of food products manufactured or produced in India.

For more information, click here.

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Which are major fruits and vegetables that are covered under Operations Green Scheme?

Fruits: Mango, Banana, Guava, Kiwi, Lichi, Papaya, Mousambi, Orange, Kinnow, Lime, Lemon, Pineapple, Pomegranate, Jackfruit, Apple, Almond, Aonla, Passion Fruit and Pear;

Vegetables: French beans, Bitter Gourd, Brinjal, Capsicum, Carrot, Cauliflower, Chillies (Green), Okra, Cucumber, Peas, Garlic, Onion, Potato and Tomato.

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