Food Processing

  • India offers the largest diversified production base and has a growing food industry. India is1
    • World’s largest milk-producing nation
    • World’s largest producer, consumer and exporter of spices
    • World’s second-largest producer of food grains, fruits and vegetables.
    • India is a Second-largest producers of Wheat
  • The total geographical area of India is 328.7 mn ha and the Gross Cropped Area is 198.4 mn ha with a cropping intensity of 142%.2
  • Total 390.68 LMT wheat procured against the last year corresponding purchase of 344.94 LMT.
  • An investor facilitation portal known as Nivesh Bandhu, developed by the Ministry of Food Processing Industries is in place to assist investors in investment decisions. 3
  • The export of essential commodities has registered substantial growth, with the export of non-basmati rice increasing by 105.20%, sugar by 60.75%, wheat by 356.86%, vegetable oils by 216.11%, pulses by 27.33% and other cereals by 154.68% during the period from April to November 2020 as compared to the corresponding period of the previous year.
  • The Ministry of Food Processing Industries, Government of India has notified 253 designated food parks in different states for the purpose of availing affordable credit from a special fund with NABARD. 3
  • NABARD has already sanctioned a term loan of about INR 490 cr to 11 Mega Food Park projects as of March 2019. 3
  • Loans to food & agro-based processing units & cold chains have been classified under agriculture activities for Priority Sector Lending (PSL). 3
  • Ministry has approved 23 Cold Chain projects, 3 Agro-Processing Clusters, 22 Food Processing Units in Uttar Pradesh under PMKSY. 
  • Fertilizers production increased by 2.7 per cent in January 2021 over January 2020. Its cumulative index increased by 3.0 per cent from April to January 2020-21.
  • The production of oilseeds has increased from 27.51 mn tonnes in 2014-15 to 37.31 mn tonnes in 2020-21.
Reasons to Invest
  • In addition to the rich resources, India has the sixth-largest food and grocery market globally and the country can provide a perfect blend of traditional and hygienic food, processed and packaged according to modern technology. 4
  • The Food processing industry in India is indigenous because simple home-based techniques such as fermentation have resulted in the creation of worldwide acknowledgement of Indian pickles, papads, chutneys and murabba.
  • The Gross Cropped Area stands at 198.4 mn ha and the reported net sown area is 140.1 mn ha while the total geographical area of the country is 328.7 mn ha, as per the land use statistics 2014-15. 5
  • Benefiting from such a geographical advantage, India is the largest producer of milk, bananas, mangoes, guavas, papaya, ginger, okra, pulses, wheat, tea and sugarcane. 6 
  • World Food India, a mega food event that took place in November 2017, brought together more than 75,000 visitors from 61 countries, resulting in 8,000 B2B meetings over a span of three days. It helped India showcase itself as a preferred investment destination, with MoU’s worth about USD 14 Bn signed by domestic & foreign investors. 7
  • Nivesh Bandhu brings together Central and State Government policies and incentives provided for the food processing sector. It is a one-stop platform for all stakeholders of the industry, including farmers, processors, traders, and logistics operators. To further help an investor make strategic decisions, the portal also includes a Food Map that can help investors find various project locations. 8
  • 55 crore beneficiaries in May and about 2.6 crore beneficiaries in June received the free food grains under PMGKAY.
  • 15.30 LMT free food grains lifted by 31 States/UTs for distribution under Pradhan Mantri Garib Kalyan Yojana -IV
  • Agriculture plays a vital role in India’s economy. 54.6% of the total workforce in the country is engaged in agricultural and allied sector activities (Census 2011) and accounts for 16.5% of the country’s Gross Value Added (GVA) for the year 2019-20 (at current prices).31
  • QCI in collaboration with DPIIT organized Udyog Manthan in Food Processing Industry to draw in best practices and experiences of sector and industry.
Recent Announcements

19th July 2021: APEDA with Basmati Export Development Foundation organizes awareness creation programme for the basmati rice growers.

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15th July 2021: APEDA in collaboration with India embassy and the importer LuLu group, today organised a mango promotion programme in Dubai for varieties from northern India.

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14th July 2021: Cabinet approves Revising and Realigning various components of Department of Animal Husbandry & Dairying Schemes and Special livestock package for leveraging the investment of INR 54,618 cr.

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12th July 2021: APEDA inks MoU with NAFED for strengthening export linkage of Farmer Cooperatives & FPOs

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12th July 2021: Union Agriculture Minister Shri Narendra Singh Tomar addresses a webinar on 40th foundation day of National Bank For Agriculture And Rural Development showed the progress of small and medium farmers is the main aim of the government.

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  • India’s export of Organic food products rose by 51% in terms of value (USD mn), to USD 1,040 mn (INR 7,078 cr) during the financial year 2020-21 compared to the previous fiscal (2019-20).
  • In 2020-21, the wheat exports from India witnessed a significant growth of 808 % to INR 4034 cr from INR 444 cr reported in the previous fiscal.
  • In the Food Processing Sector, the number of registered units/ factories is 37,839 and investment in fixed capital is USD 28.17 Bn. 10
  • FDI inflows in the food processing sector increase from USD 628.24 mn in 2018-19 to USD 904.7 mn in 2019-20.
  • The Food Processing Industry in India stands as one of the major employment-intensive industries, constituting 13.75% of the employment in all manufacturing factories registered under the Factories Act 1948. The total number of persons engaged in the food processing sector is 17,72,259. 10
  • The value of processed food exports stood at USD 35.3 Bn during the year 2018-19. 11
  • Indian exports of essential agricultural products have registered an increase of 38.00%, during the period April 2020 – January 2021.49
  • The Indian Railways have introduced ‘KISAN RAIL’ service, under which trains with multi commodities primarily enable farmers and producers to move their agricultural produce from rural areas to major towns and cities. So far, the Indian Railways have operated 157 Kisan Rail services on 18 routes for transportation of fruits, vegetables and other perishables.
Growth Drivers
  • Union Minister Shri Hardeep Puri has stated that the budget of the Department of Agriculture & Farmers’ Welfare has gone up more than six times in the past six years. This sector employs nearly 42 per cent of our total population and contributes 16 per cent to the GDP while experiencing a year-on-year growth rate of 2 per cent.38
  • The exports of Agri commodities showed a sharp increase of 23.24% during March - June 2020 witnessing an export of INR. 25,552.7 Cr against the export of INR. 20,734.8 Cr during the same period in 2019.39 
  • The foodgrains production during 2019-20 was 296.65 MMT and horticulture production was 319.57 MMT.41
  • Under the Ministry of Food Processing Industries, 284 State-wise proposals approved under the Scheme of Creation / Expansion of Food Processing & Preservation Capacities (CEFPPC) of Pradhan Mantri Kisan Sampada Yojana (PMKSY).
  • Sector Policy Scheme for extending financial assistance to project proponents for enhancement of their ethanol distillation capacity.
  • Ministry in pursuance of sub-clause (c) of clause 22 of the Fertilizer (Inorganic, organic or mixed) (Control) Order, authorizes the manufacturers of City Compost to sell City Compost in bulk directly to farmers.42
  • Cabinet approved the Minimum Support Price of Copra for the 2021 season as INR 10,335 per quintal from INR 9,960 per quintal in 2020.43 
  • To boost the agricultural economy, to reduce dependence on imported fossil fuel, to save foreign exchange on account of crude oil import bill & to reduce the air pollution, the Government has fixed a target of 10% blending of fuel-grade ethanol with petrol by 2022 & 20% blending by 2025.
FDI Policy
  • 100% FDI is permitted under the automatic route in the Food and Processing industry in India. 12
  • 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. 12
  • The cumulative FDI equity inflow in the Food Processing industry is USD 10,374.16 mn during the period from April 2000 to March 2021. This constitutes 1.96% of the total FDI inflow received across sectors.26


Read more about Foreign Direct Investment Policy in India >

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.

Financial Outlay- INR 10,900 cr

For more details on PLI Schemes, Click Here

Sector Policy
  • Food Processing is recognized as a Special Focus Sector in the National Manufacturing Policy. 13
  • Food and agro-based processing units can avail loans under Priority Sector Lending. 14 It will ensure a greater flow of credit to entrepreneurs for setting up food processing units and attract investment in the industry.
  • Government has set up a special fund called "Food Processing Fund" of approximately USD 265 Mn in National Bank for Agriculture and Rural Development (NABARD) for extending affordable credit to designated food parks and the individual food processing units in the designated food parks. 15
  • Ministry of Food Processing Industries is also keen on developing an integrated and comprehensive National Food Processing Policy, for which a draft has already been circulated among the stakeholders to receive suggestions and recommendations. 16 It aims to build India’s National Food Grid and National Cold Chain Grid apart from the retail markets at every nook and corner of the country.
  • Ministry of Food Processing Industries (MoFPI) provides a host of financial assistance to food processing companies in India, under the umbrella scheme of Pradhan Mantri Kisan Sampada Yojna (PMKSY). The following schemes are included under PMKSY: 17
    • Mega Food Parks
    • Integrated Cold Chain and Value Addition Infrastructure
    • Creation/ Expansion of Food Processing/ Preservation Capacities (Unit Scheme)
    • Infrastructure for Agro-processing Clusters
    • Creation of Backward and Forward Linkages
    • Food Safety and Quality Assurance Infrastructure
    • Human Resources and Institutions
    • Operation Greens
  • The Union Cabinet of India has announced a new central sector scheme of Agriculture Infrastructure Fund. Under the scheme, INR 1 lakh cr will be provided by banks and financial institutions to feasible projects for post-harvest management infrastructure and community farming assets. The financial support will be in the form of medium - long term debt financing facility and all loans under this financing facility will have interest subvention of 3% per annum up to a limit of INR 2 cr. 18
  • The Cabinet Committee on Economic Affairs of the Government of India has approved the setting up of Animal Husbandry Infrastructure Development Fund (AHIDF). AHIDF will incentivize investments in infrastructure for dairy and meat processing and value addition infrastructure and establishment of animal feed plant in the private sector. Farmer Producer Organizations (FPOs), MSMEs, Section 8 companies, private companies and individual entrepreneurs with a minimum 10% margin money will be the eligible beneficiaries of the scheme. The remaining 90% would be the loan component which will be provided by scheduled banks. A total amount of INR 15000 cr. has been approved for the Animal Husbandry Infrastructure Development Fund (AHIDF). 21

Animal Husbandry Infrastructure Development Fund (AHIDF): 21

  • The Cabinet Committee on Economic Affairs of the Government of India has approved the setting up of Animal Husbandry Infrastructure Development Fund (AHIDF). AHIDF will incentivize investments in infrastructure for dairy and meat processing and value addition infrastructure and establishment of animal feed plant in the private sector. 
  • Farmer Producer Organizations (FPOs), MSMEs, Section 8 companies, private companies and individual entrepreneurs with a minimum 10% margin money will be the eligible beneficiaries of the scheme. The remaining 90% would be the loan component which will be provided by scheduled banks.
  • A total amount of INR 15000 cr. has been approved for the Animal Husbandry Infrastructure Development Fund (AHIDF).

The Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 27

  • This act creates an ecosystem where the farmers and traders enjoy the freedom of choice relating to the sale and purchase of farmers’ produce.
  • This act facilitates remunerative prices through competitive alternative trading channels.
  • The main aim of this act is to promote efficient, transparent and barrier-free inter-State and intra-State trade and commerce of farmers’ products
  • In order to support section 17 of the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020, Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Rules, 2020 came into force on 22 October 2020.28

Operation Green (Top to Total)

  • Ministry of Food Processing Industries (MoFPI) as a part of Aatmanirbhar Bharat Abhiyan extended the Operation Greens Scheme from Tomato, Onion and Potato (TOP) to all fruits & vegetables (TOTAL) for a period of six months on a pilot basis. The objective of the intervention is to protect the growers of fruits and vegetables from making distress sales.29
  • In a Budget speech for 2021-2022, Government has announced the expansion of the scope of “Operation Greens scheme” from Tomato, Onion & Potato (TOP) to 22 perishable products, so as to boost value addition in agriculture and allied products and their exports.
  • 6th Amended Scheme Guideline for Short term Intervention under Operation Greens TOP to TOTAL.35
  • Subsidy for transportation of all fruits & vegetables via any type of train service by Indian Railway under Operation Greens - TOP to TOTAL 

PM Kisan Samman Nidhi41

  • Hon'ble PM, Shri Narendra Modi released the 7th instalment of financial benefit under PM Kisan Samman Nidhi to establish Indian agricultural markets in the world.37
  • More than 1,10,000 cr rupees have been released so far and 10.59 cr farmer families have been benefitted.
  • PM Shri Narendra Modi released 8th instalment of financial benefit of INR 2,06,67,75,66,000 to 9,50,67,601 beneficiary farmers under PM-KISAN scheme.

Crop Insurance Scheme

  • The Pradhan Mantri Fasal Bima Yojana (PMFBY) successfully completes 5 Years of operations on 13th January 2021. The Scheme benefits farmers who face crop losses due to various reasons.

Micro Irrigation Fund

  • Micro Irrigation Fund with a corpus of INR 5,000 cr was created with NABARD during 2018-19 with an objective to facilitate the States in mobilizing the resources and to provide top-up/additional incentives to farmers for incentivising micro-irrigation beyond the provisions available under PMKSY-PDMC.

Pradhan Mantri Kisan Maan Dhan Yojana46

  • Pradhan Mantri Kisan Maan Dhan Yojna (PMKMY) Scheme aims to provide a social security net for the Small and Marginal Farmers (SMF) by way of pension, as they have minimal or no savings to sustain their livelihood during their old age and to support them in the event of the consequent loss of livelihood.

Pradhan Mantri Kisan Sampada Yojana (PMKSY)

  • The overall growth and development of food processing sector, mostly through private sector participation.
  • Under the component schemes, MoFPI provides credit linked financial assistance (capital subsidy) in the form of grants-in-aid to entrepreneurs for setting up of food processing / preservation industries with farm level infrastructure like primary processing facilities, collection centers etc.
  • Till July 2021, 792 projects out of a total of 818 projects have been approved for setting up food processing Industries by the private sector with approved Grants in Aid of INR 5,791.71 cr.
Financial Support

Agriculture Infrastructure Fund (AIF)40

  • Agriculture Infrastructure Fund (AIF) was launched on 9th August 2020. The aim of the fund is to provide medium to long term debt financing for investment in viable projects for post-harvest management Infrastructure and community farming assets through interest subvention and financial support. 
  • The scheme shall be in effect for 10 years i.e. from FY 2020 to FY 2029.
  • As of date, 3,064 projects of Primary Agricultural Credit Societies worth a loan amount of INR 1,565 cr have been sanctioned by NABARD to 3,064 PACs under the scheme. 

Highlights of 2020-21 (First Advance Estimates) 44     

  • Total Horticulture production in 2020-21 is estimated to be 326.58 mn tonne, an increase of about 5.81 mn tonnes (an increase of 1.81%) over 2019-20.
  • An increase in production of Fruits, Vegetables, Aromatics & Medicinal Plants and Plantation Crops, while a decrease in Spices and Flowers over the previous year, is envisaged.
  • The Fruits production is estimated to be 103.23 mn tonne compared to 102.03 mn tonne in 2019-20.
  • The production of Vegetables is estimated to be 193.61 mn tonne, compared to 188.91 mn tonne in 2019-20.
  • Onion production is estimated to be 26.29 mn tonne, compared to 26.09 mn tonne in 2019-20.
  • Potato production is estimated to be 53.11 mn tonne, against the production of 48.56 mn tonne in 2019-20.

Production-Linked Incentive (PLI) Scheme47

  • PLI Scheme for Food Processing Industry was approved by the Cabinet on 31.3.2021 for implementation during 2021-22 to 2026-27 with an outlay of INR 10,900 cr.
  • Products - Ready to Eat / Ready to Cook (RTE/ RTC) Marine Products Fruits & Vegetables Mozzarella Cheese Innovative & Organic Food Products including free-range poultry egg & meat
  • The scheme is meant for Indian companies and subsidiaries of MNCs operating in India with minimum sales of food products manufactured in India.
  • The objective of the scheme is to support the creation of global food manufacturing champions; support Indian brands of value-added food products in the international markets; increase employment opportunities for off-farm jobs and ensuring remunerative prices of farm produce and higher income to farmers.
  • Under PLI Scheme for Food Processing Industries issued an EOI from prospective beneficiaries and total of 165 applicants registered and activated for submission of application.
  • No company will get more than 25% of the total budget for the segment and no company will get less than 5% of the segment outlay.48
Investment Opportunities


  • Fruits and vegetables: preserved, candied, glazed and crystallized fruits and vegetables, juices, jams, jellies, purees, soups, powders, dehydrated vegetables, flakes, shreds and ready-to-eat curries.
  • Food preservation by fermentation: wine, beer, vinegar, yeast preparation, alcoholic beverages. Beverages: fruit-based, cereal-based.
  • Dairy: liquid milk, curd, flavored yogurt, processed cheese, cottage cheese, Swiss cheese, blue cheese, ice cream, milk-based sweets.
  • Food additives and nutraceuticals.
  • Confectionery and bakery: cookies and crackers, biscuits, bread, cakes and frozen dough.
  • Meat and poultry: eggs, egg powder, cut meats, sausages and other value-added products. Fish, seafood and fish processing – processing and freezing units.
  • Grain processing – oil milling sector, rice, pulse milling and flour milling sectors.
  • Food preservation and packaging: metal cans, aseptic packs.
  • Food processing equipment: canning, dairy and food processing, specialty processing, packaging, frozen food/refrigeration and thermo-processing.
  • Consumer food: packaged food, aerated soft drinks and packaged drinking water. Spice pastes.
  • Supply chain infrastructure – this niche has investment potential in food processing infrastructure, the government’s focus is on supply chain related infrastructures like cold storage, abattoirs and food parks.
  • The establishment of food parks – a unique opportunity for entrepreneurs, including foreign investors to enter in the Food Processing industry in India.
  • One District One Focus Product (ODOFP) programme cover products of agriculture and allied sectors for 728 districts of the country.


Explore projects to invest in Food Processing sector >

Foreign Investors
  • Kraft (USA)
  • Mars (USA)
  • Nestle (Switzerland)
  • McCain (Canada)
  • Danone (France)
  • Ferrero (Italy)
  • Del Monte (USA)
  • Kagome (Japan)
  • Kelloggs (USA)
  • Pepsi (USA)
  • Unilever (United Kingdom)
  • Perfetti (Italy)
  • Cargill (USA)
  • Coca Cola (USA)
  • Hershey (USA)
  • Metro Cash & Carry (Germany)
  • Walmart (US)
  • Yakult (Japan)
  • Amazon (USA)
Key Achievements
  • Ministry has accorded final approval to 38 Mega Food Parks and in-principle approval to 3 Mega Food Parks in the country.
  • 291 chain projects have been approved. Out of these, 193 colds are completed and 98 are under development as of 30th April 2020. 23
  • A dedicated Investors' Portal and mobile application called 'Nivesh Bandhu' has been launched. 24 
  • MoUs signed between the Government of India and the United Nations' World Food Programme for cooperation during 2019 – 2023. 25
  • NITI AAYOG along with National Informatics Centre (NIC) understood the comparative study of the Data Governance Quality Index(DHQI) of 72 Central Ministries/Departments. In this survey, the Ministry of Food Processing came 1st among the other ministries. 30
  • Under the PM FME Scheme, out of INR 15 cr allocated by the Ministry of Finance, INR 89.48 cr was released to 30 states/YTs and INR 5 cr each for NIFTEM and IIFPT. 30
  • On 29th June 2021, PMFME Scheme is implemented in 35 States and Union Territories. More than 9000 individual beneficiaries have registered on the portal, out of which more than 3500 applications have been successfully submitted under the scheme.
  • Under the cold chain projects, 206 projects have reported completion and started commercial operations.33
  • Department of Financial Services under the Ministry of Finance to provides INR 2 lakh cr Concessional credit boost to 2.5 cr farmers through Kisan Credit Cards.34
  •  ODOP proposals received from 5 states/UTs, viz Andaman and Nicobar Island, Chhattisgarh, Jammu and Kashmir, Meghalaya and Telangana are under consideration for approval.36 
  • New Education Policy will be helpful in making the agricultural sector more prosperous and employment-oriented.
  • National e-Governance Plan in Agriculture (NeGPA) is launched towards the Mission of Digital Agriculture. This scheme aims to achieve rapid development in Indian Agriculture Sector through the use of Information & Communication Technology (ICT).
  • MoFPI has sanctioned 37 Mega Food Parks (MFPs) and given in-principle approval for 2 MFPs in the country.
  1. Nivesh Bandhu, Investor Portal,
  2. Annual Report 2018-19, Department of Agriculture, Cooperation & Farmers Welfare, Ministry Of Agriculture & Farmers Welfare,
  3. Annual Report 2018-19, Ministry of Food Processing Industries,
  4. Nivesh Bandhu, Investor Portal,
  5. Annual Report 2018-19, Department of Agriculture, Cooperation & Farmers Welfare, Ministry Of Agriculture & Farmers Welfare,
  6. Nivesh Bandhu, Investor Portal,
  7. World Food India – 2019, Consulate General of India,
  8. Nivesh Bandhu, Investor Portal,
  9. Annual Report 2018-19, Ministry of Food Processing Industries,
  10. “Annual Survey of Industries Vol I 2017-18”, National Sample Survey Office – Industrial Statistics Wing, Ministry of Statistics and Programme Implementation,
  11. Annual Report 2018-19, Ministry of Food Processing Industries,
  12. Consolidated FDI Policy,
  13. National Manufacturing Policy, DPIIT,
  14. Press Release, Ministry of Food Processing Industries,
  15. Loans For Food Parks And Food Processing Units In Designated Food Parks, NABARD,
  16. Draft National Food Processing Policy, Ministry of Food Processing Industries,
  17. About PMKSY Scheme, Ministry of Food Processing Industries,
  18. Cabinet approves Central Sector Scheme  of financing   facility under   'Agriculture Infrastructure Fund', PIB,
  19. Expenditure Budget - Ministry of Food Processing Industries, India Budget,
  20. Expenditure Budget - Central Sector Schemes, India Budget,
  21. Cabinet approves establishment of Animal Husbandry Infrastructure Development Fund, PIB,
  22. State/UT-wise details of Mega Food Park projects as of 27.02.2020, Ministry of Food Processing Industries,
  23. Consolidated list of State-wise 291 Approved Cold Chain Projects as on 30.04.2020, Ministry of Food Processing Industries,
  24. Nivesh Bandhu, Investor Portal,
  25. Signing of MOU between the Government of India and the United Nations' World Food Programme for cooperation during 2019 – 2023, Department Of Agriculture, Cooperation & Farmers Welfare, Ministry of Agriculture & Farmers' Welfare,
  26. Factsheet on FDI - April 2000 to March 2021Department for Promotion of Industry and Internal Trade,
  27. Ministry Notice,
  28. Ministry Notice,
  32. PIB Release,
  34. PIB Release,
  37. PIB Release,
  38. PIB Release,
  39. PIB Release,
  40. Year-End Review 2020 of Ministry of Agriculture & Farmer Welfare,
  41. PIB Release,
  43. PIB Release,
  44. PIB Release,
  45. PIB Release,
  46. PIB Release,
  47. PIB Release,

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