Govt okays PLI in food processing

The scheme is aimed at helping farmers get better prices and also at reducing farm produce wastage

Suneera Tandon, Utpal Bhaskar
Updated1 Apr 2021
The  <span class='webrupee'>₹</span>10,900 crore scheme will over six years through 2026-27.
The ₹10,900 crore scheme will over six years through 2026-27.(MINT_PRINT)

India on Wednesday approved a 10,900 crore-production linked incentive (PLI) scheme for its food processing industry, aimed at helping farmers earn better prices and reduce crop wastage.

The scheme, which will run over six years through 2026-27, was approved by the Union cabinet headed by Prime Minister Narendra Modi.The government said the scheme will create jobs for 250,000 people and attract investments from global and domestic companies in the food processing sector. It will also help expand the food processing capacity to generate processed food output worth 33,494 crore by 2026-27, the government said.

An expression of interest (EoI) will be floated by April-end, seeking applicants to commit to a minimum level of investments and sales. Increases in sales will be rewarded through the release of this subsidy, which may vary across segments. “The objectives of the scheme are to support food manufacturing entities with stipulated minimum sales and willing to make minimum stipulated investment for expansion of processing capacity and branding abroad to incentivize emergence of strong Indian brands,” the government said in a note.

Some of the products identified for providing support are ready-to-cook and ready-to-eat foods, processed fruits and vegetables, marine products and mozzarella cheese.

Sanjiv Puri, chairman, ITC Ltd, said the scheme will be a “game changer in boosting food processing investments, agri-exports, farmer incomes and in building Indian brands for the global market. We compliment the Hon’ble Prime Minister for the vision and the government for spearheading this transformative step forward.”

ITC makes a range of packaged and processed foods including packaged flour, noodles, juices and chips.

Other FMCG firms said they will study the scheme and plan investments accordingly. “Nestlé India welcomes the cabinet approval. We will study the details and accordingly decide on next step,” the maker of Maggi Noodles said.

India’s largest dairy cooperative that sells products under the Amul brand said it is awaiting further details to start exporting buffalo mozzarella cheese.

“We have developed the product (buffalo mozzarella cheese). We will shortly launch it in the domestic market and then go for the international market,” said R.S. Sodhi, managing director, Gujarat Co-operative Milk Marketing Federation.

Hindustan Unilever Ltd (HUL) said it will assist in making the scheme a success. “Less than 10% of food grown in India is processed, compared to 40% in South-East Asia. We hope PLI increases value addition in food sector,” said Sudhir Sitapati, executive director, foods and refreshment, HUL.

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