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The Government of India's PLI Scheme for Food Processing Industry aims to boost food manufacturing, promote Indian Read More... brands globally, and create more jobs through financial incentives and branding support. Read less
Details
Looking to scale up your food business, build an international brand, or contribute to India's food processing sector? The Production Linked Incentive (PLI) Scheme for Food Processing Industry could be a game-changer for you.
What Is This Scheme?
Launched by the Ministry of Food Processing Industries, this scheme is designed to make Indian food products globally competitive. It works by providing financial incentives linked to your production and sales. The goal is to encourage large-scale food manufacturing, build strong Indian brands, create job opportunities, and ensure farmers get fair prices for their produce.
Who Can Benefit From This Scheme?
This scheme is primarily for Indian companies involved in food manufacturing. It has specific provisions for:
- Large companies aiming for large-scale production.
- Small and Medium Enterprises (SMEs) focusing on innovative or organic food products.
- Companies looking to promote their Indian food brands in international markets.
Why This Scheme Is Important
The PLI scheme plays a crucial role in transforming India's food processing sector. It encourages investment in modern manufacturing, helps Indian businesses compete on a global stage, and boosts exports. By supporting branding and marketing abroad, it aims to establish well-known Indian food brands worldwide and create significant employment opportunities.
Objective
Benefits
- Financial Assistance:Financial assistance of up to ₹10,00,00,000/- for a period of 3 years is provided to eligible institutions for establishing and upgrading Centres of Excellence.
- Release of Installment-Based Fund:Funds are released in 3 installments of 40%, 40%, and 20% of the total sanctioned amount, ensuring phased and performance-linked financial support.
- Performance-Linked Disbursement:The second and third installments are released only after expenditure of at least 75% of the released amount and submission and acceptance of the Utilization Certificate and satisfactory performance report.
- Construction Cost Limit:Expenditure on the construction of buildings is capped at 30% of the approved project budget.
Note:Purchase of land /vehicle,except ambulanceand foreign travel, is not allowed from the grant.
Sources and references
Who Can Apply? Eligibility Criteria
To be eligible for this scheme, applicants must meet the following criteria:
- Manufacturing Focus: Applicants must be engaged in manufacturing food products in India that fall under the targeted segments. SMEs applying for innovative/organic products must also meet specific criteria.
- Sales Threshold: Applicants need to have achieved a minimum total sale of food products above a specified threshold in the base year. The food products considered for this include those sold in consumer packs. (Refer to Appendix A for minimum sales figures).
- Minimum Investment: Applicants must commit to a minimum investment in plant and machinery, technical civil work, and associated infrastructure. This committed investment must be greater than the minimum investment specified. (Refer to Appendix A for investment details).
- Product Coverage: Applicants must specify the product groups and segments they are applying for, as detailed in Appendix B. They can also include products they intend to manufacture during the project period.
- Manufacturing Chain: The entire chain of manufacturing processes, including primary processing of the food products, must take place in India. Exceptions apply for additives, flavours, and edible oils.
- No Defaults: Applicants should not have been declared bankrupt, a wilful defaulter, or reported for fraud by any bank or financial institution. They should also not be on the SEBI Debarred List.
Applicant Categories:
- Category I: Large entities applying based on Sales and Investment Criteria, potentially also for Branding & Marketing support abroad.
- Category II: SMEs manufacturing innovative/organic products, applying for PLI incentives based on Sales.
- Category III: Applicants applying solely for Branding & Marketing incentive for activities abroad.
How To Apply
The application process is designed to be streamlined and accessible:
- Expression of Interest (EOI): Interested applicants must respond to the Expression of Interest (EOI) issued by the Ministry of Food Processing Industries.
- Online Application: Applications are to be submitted exclusively through the online portal managed by the designated Project Management Agency (PMA).
- Submission: Complete the application form accurately with all required details and supporting documents.
- PMA Verification: The Project Management Agency (PMA) will examine the submitted application.
- Rectification: If the application is incomplete, the applicant will be notified and given a period of 10 working days to provide the missing information.
- Approval: Complete applications are then processed for final approval by the Ministry of Food Processing Industries.
Official Application Portal:
For the most current application links and EOI details, please refer to the official website of the Ministry of Food Processing Industries or the designated Project Management Agency.
Documents Required for Application
To apply for the PLI Scheme for Food Processing Industry, you will need to prepare the following documents:
- Completed Application Form (As per Annexure-1).
- Undertaking for Audit of Manufacturing Sites / Offices (As per Annexure-7).
- Details of Manufacturing Sites (both own and contract manufacturing units).
- Shareholding Pattern Details.
- Memorandum and Articles of Association / Partnership Deed / Registration Certificate.
- Annual Financial Statements and Reports for the required period.
- Sales Data of Eligible Food Products (for the Base Year and subsequent years).
- Details and Proof of Committed Investment.
- Chartered Accountant Certificate (for verification of sales claims).
- Chartered Engineer Certificate (for verification of investment, where applicable).
- Any other supporting documents as specified in the EOI or required during the application process.
Post-Approval Requirement:
- Bank Guarantee (3% of Committed Investment) - This is to be submitted after your application is approved.
FAQ’s
What is the main goal of the Production Linked Incentive Scheme for Food Processing Industry?
The scheme aims to boost food manufacturing in India, promote our food brands internationally, create more non-farm jobs, ensure better prices for farm produce, and increase farmers' incomes.
Can I apply for incentives for more than one type of food product segment?
Yes, you can apply for multiple segments. However, you'll need to submit separate applications for each segment and meet all the sales and investment criteria for each one individually.
How is the incentive amount calculated for the scheme?
The incentive is calculated by multiplying your incremental sales of eligible food products by the specific incentive rate applicable to that product segment. So, higher sales growth means a higher incentive.
What is the duration for which this scheme will be active?
The scheme is active for a period of six years, starting from the financial year 2021-22 and concluding in the financial year 2026-27. Payments for incentives earned in 2026-27 will be made in the following year, 2027-28.
What is the role of the Project Management Agency (PMA) in this scheme?
The PMA handles the processing of applications, verifies the claims, and manages the disbursement of incentives. They are the primary agency for operationalizing the scheme.
Are there different application fees for different categories?
Yes, there are different non-refundable application fees. For Category I, it's ₹1,00,000/-. For Category II and Category III (SMEs), it's ₹10,000/-. For other applicants in Category III, it's ₹50,000/-.
What happens if my application is found to be incomplete?
If your application is incomplete, you will be notified. You will then have 10 working days to submit the missing information. If you fail to do so, your application will be rejected.
What kind of support is available for promoting Indian brands abroad?
The scheme offers financial support for branding and marketing Indian food products internationally. This includes up to 50% reimbursement on eligible expenses, subject to certain limits.
Are there any requirements regarding the origin of raw materials?
Generally, the entire chain of manufacturing, starting from raw materials, should be in India. However, this condition doesn't apply to additives, flavours, and edible oils.
How much time does it typically take to get an approval after applying?
Applications are usually finalised within 90 days from the closing of the application window, provided all documents are complete and correct. The PMA reviews applications within 15 working days.
What is the definition of 'Investment' for the purpose of this scheme?
Investment refers to the expenditure incurred on setting up new plant and machinery, technical civil work, and associated infrastructure. Non-creditable taxes and duties are also included in this expenditure.
Do I need to provide any security after my application is approved?
Yes, after approval, you will need to submit a performance bank guarantee. This guarantee should be equal to 3% of your committed investment and must be submitted within two weeks of receiving the approval letter.
Which specific food product segments are covered under the scheme?
The scheme covers Ready-to-Cook/Ready-to-Eat (including millet-based foods), Processed Fruits & Vegetables, Marine Products, and Mozzarella Cheese. It also supports innovative/organic products by SMEs.
Where can I find detailed eligibility criteria and sales/investment figures?
All detailed eligibility criteria, including minimum sales and investment figures for different categories and segments, are provided in the scheme's official guidelines, specifically in Appendix A and Appendix B.
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