Strengthening India’s Food Processing Ecosystem

Introduction

As the world’s second-largest producer of fruits and vegetables, India is leveraging the Production-Linked Incentive Scheme (PLISFPI) to move beyond raw commodity exports toward high-value integrated global value chains.

Policy Framework

The PLISFPI is a sector-specific manifestation of the broader Production Linked Incentive (PLI) Scheme launched in April 2020.

• • Objective: To boost domestic manufacturing by offering financial incentives based on incremental sales.
  • Alignment: Supports the visions of Atmanirbhar Bharat and Make in India.
  • Scope: Expanded to 14 strategic sectors with a total outlay of ₹1.97 lakh crore, with food processing as a key focus area.

The Integrated Framework

The scheme is structured to address the entire ecosystem from production to global branding:

• • Category I (Major Segments): Focuses on Ready-to-Cook/Ready-to-Eat (RTC/RTE) foods, millet-based products, processed fruits/vegetables, marine products, and mozzarella cheese.
  • Category II (SME Innovation): Incentivizes innovative and organic products, including free-range eggs and poultry products.
  • Category III (Global Branding): Reimburses 50% of branding/marketing expenses abroad (capped at 3% of sales or ₹50 crore/year) to establish strong Indian food brands globally.
  • Millet Push (PLISMBP): A sub-component carved out in FY 2022-23 (₹800 crore outlay) specifically to promote millet-based RTC/RTE products.

Institutional and Incentive Structure

• • Incentive Basis: Based on incremental sales. Applicants must meet minimum sales thresholds in the base year (2019-20).
  • Management Agency: Implemented through IFCI Limited (Project Management Agency).
  • Monitoring: Continuous progress tracking via a web-based MIS and online portal for transparency.

Transformational Impact (As of Feb 2026)

• • Industrial Participation: 165 applications approved across 274 project locations.
  • Incentives Disbursed: ₹2,162.55 crore distributed to beneficiaries.
  • MSME Integration: 69 MSMEs are direct applicants, with another 40 acting as contract manufacturing units.
  • Export Performance: Cumulative export sales of beneficiaries reached ₹89,053.44 crore (April 2021 – September 2025).

Challenges

• • Supply Chain Perishability: While processing capacity has grown by 34 lakh MT, The Hindu reports that cold-chain gaps in “last-mile” connectivity from farm gates to project locations remain a hurdle for smaller MSMEs.
  • Standardization Hurdles: ORF notes that meeting stringent international food safety and phytosanitary standards for Category III (Global Branding) requires significant technical upskilling for indigenous organic producers.
  • Raw Material Price Volatility: PRS Legislative highlights that fluctuations in the prices of key inputs (like marine products or mozzarella milk) can impact the “incremental sales” targets required to trigger incentives.

Way Forward

• • Strengthening Post-Harvest Logistics: Accelerating the integration of PM Kisan SAMPADA Yojana with PLI project locations to reduce wastage.
  • Expanding Global Footprint: Utilizing Category III incentives to position Millet-based products as a premium “superfood” in European and North American markets.
  • Technological Upgradation: Encouraging the adoption of Industry 4.0 (IoT in preservation and traceability) to enhance global competitiveness.

Conclusion

The PLISFPI has successfully converted India’s massive agricultural surplus into a competitive manufacturing advantage by linking incentives directly to growth. The scheme has mobilized nearly ₹9,207 crore in private investment and surpassed employment targets.