India’s food processing project industry is one of the most rapidly expanding sectors, playing a vital role in the economy while providing great opportunities for employment, trade, and investment. Understanding its value, the Ministry of Food Processing Industries (MoFPI) has created a comprehensive system of funding, infrastructure subsidies, and support grants to invest in different segments of food processing.
In this article, I outline the potential advantages offered by MoFPI, including the grants provided and how to achieve optimal results with them, especially for entrepreneurs or startups wishing to establish a food processing project unit in India.
Food Processing Project: A High-Growth Sector in India
As stated in the MoFPI Annual Report 2023–24, the food processing project sector of India:
- Contributes 7.66% to manufacturing GVA and 8.45% to agriculture GVA
- Logged 20.68 lakh workers in registered units and 51.11 lakh in unorganized enterprises
- Achieved agri-food exports of USD 46.43 billion in 2023–24
- Keeps growing at 5.63% p.a., which is higher than the agriculture sector’s 4.46%
This progress is supported by government-sponsored initiatives such as PMKSY and PMFME that are centered around capital subsidy funding and grant subsidized aid.
Related: Launch Your Profitable Food Processing Business
What Types of Grants Does MoFPI Offer?
Infrastructure creation, value addition, R&D, and enterprise development are some of the focus areas from which MoFPI grants can be obtained, stemming from structural scheme development.
Important Grant Schemes
| Name of the Scheme | Goals of Primary Activities | Maximum Grant Limit |
| Mega Food Parks | 35% of the eligible project cost | ₹50 crore |
| Integrated Cold Chain & Value Addition | Cold storage, reefer vans, ripening chambers | ₹10 crores |
| Agro Processing Clusters | Aggregation and primary processing infrastructure | ₹10 crores |
| Backward & Forward Linkages | Connection with farmers and markets | ₹5 crores |
| Food Testing Laboratories | Ensuring safety and quality of food | ₹5 crores |
| R&D Projects | Innovations in food technology | ₹2 crores |
| PMFME Scheme | Credit-linked subsidy for micro food units | 35% of eligible project cost |
MoFPI Grants Allocation – Scheme-Wise Overview (2023–2024)
Following the report from MoFPI, the table highlighted below shows grant allocation from major schemes.
| Scheme | Allocation ₹ Crore |
| Mega Food Parks | 1,750 |
| Cold Chain Projects | 1,850 |
| Agro Processing Clusters | 960 |
| Backward & Forward Linkages | 870 |
| Food Testing Labs | 260 |
| R&D Projects | 180 |
| Others (Including PMFME, SLTI) | 630 |
(Source: MoFPI Annual Report 2023–24)
Eligibility Criteria for Receiving Grants from MoFPI
To receive MoFPI grant support, you must meet the following:
| Criteria | Requirement |
| Legal Entity | Registered company/LLP/co-operative society/trust |
| Land Requirement | Owned or long-term leased land for infrastructure setup |
| DPR (Detailed Project Report) | Must contain technical, financial, and market analysis |
| Promoter Contribution | Usually 25-40% of the total project cost |
| Bank Term Loan | Proof of financial closure via a term loan |
| Compliance | FSSAI, pollution, and building regulations compliance |
Related: How PM Kisan SAMPADA Yojana Is Fueling India’s Agro-Industrial Revolution
Step-by-Step Process to Apply for MoFPI Grants
1. Identify the Relevant Scheme
Select a scheme that corresponds with your business model, either a cold storage facility, a processing unit, or a testing laboratory.
2. Prepare a Detailed Project Report (DPR)
A Detailed Project Report should include:
- Market research along with demand estimates
- Availability of raw materials
- Financial forecasts
- Process flow diagrams and layout designs
- Assessment of environmental impact
Tip: NPCS prepares certified Market Survey cum Techno-Economic Feasibility Reports containing manufacturing processes, raw material planning, plant layout, and finances. NPCS assists in evaluating the feasibility of food processing projects.
3. Obtain Land and Financial Closure
Secure a lease or purchase agreement for the land, as well as a term loan from the bank. Both the loan and land documents are required to obtain MoFPI grant support.
4. Submit Online Application
You can submit an application using MoFPI’s Scheme Management System. Make sure to have electronic copies of:
- DPR
- Term loan letter
- Land documents
- Company incorporation certificate
5. Evaluation by Project Management Agency (PMA)
The PMA performs a technical and financial feasibility assessment.
6. Approval by Inter-Ministerial Approval Committee (IMAC)
Upon clearing, the project is approved for grant-in-aid which is usually released in multiple payments as specified.
Common Projects That Are Eligible for Grants
| Kind of Project | Funding Components |
| Cold Chain Units | Pre-cooling, cold storage, and reefer vans |
| Processing Plants | Machinery along with civil works and automation |
| Mega Food Parks | Common infrastructure, research and development laboratories, roads |
| Agro Clusters | Sorting, grading, packaging, and storage facilities |
| Ripening Chambers | Controlled ethylene gas chambers for ripening |
| Food Testing Labs | Chemical and microbiological analysis equipment |
Top States for MoFPI Funded Projects
| State | Focus Area | Reason to Invest |
| Maharashtra | Cold chains and fruit processing | Excellent connectivity for logistics and exports |
| Andhra Pradesh | Marine, mango, and dairy industries | Proactive policies along with coastal advantage |
| Punjab | Dairy alongside wheat and vegetable clusters | Rich agricultural base along with infrastructure |
| Tamil Nadu | Ready-to-eat (RTE) foods, beverages, and bakery goods | Skilled working population and industrial zones |
| Uttar Pradesh | Mango, dairy, and processed foods | Access to the northern Indian markets |
Important Government Schemes for New Companies
| Scheme | What is Provided |
| PM Kisan SAMPADA Yojana | Infrastructure grants for cold chains, food parks, and clusters |
| PMFME Scheme | 35% capital subsidy alongside micro unit capacity building |
| PLIS for Food Processing | Sales-linked incentives for RTE, marine, dairy products, and millets |
| ODOP Initiative | Backward linkage grant for funding local produce processing |
Questions That Are Frequently Asked
Q1: Is it possible for a startup to apply for MoFPI grants?
As long as the startup is a registered entity and meets other eligibility requirements, they can apply.
Q2: What’s the maximum subsidy I can receive?
A maximum of ₹50 crore for Mega Food Parks and ₹10 crore for Cold Chain or Agro Clusters.
Q3: Am I eligible for assistance with preparing a Detailed Project Report (DPR)?
Yes, NPCS specializes in preparing DPRs along with projected financials and bespoke business plans tailored for grants.
Q4: What is the turnaround time for getting an approval?
Usually 3 to 6 months, but it varies based on the scheme and how complete the documentation is.
NPCS’s Intervention in Your Food Processing Project
At Niir Project Consultancy Services (NPCS), we offer support in areas such as:
- Conducting Market Surveys and Preparing Techno-Economic Feasibility Reports
- Analysis of Manufacturing Processes, Raw Materials, Equipment Layout, and Finances
- Budgetary Assistance with feasibility studies and securing grants, subsidies, and funding
From mango processing units in Andhra Pradesh to spice value-addition plants in Kerala, NPCS is committed to getting your project off the ground.
Check our Food processing videos for more information
Conclusion: Get Capital Grants Before 2025 Ends
The food processing sector is open for business in India and capital subsidy is your launchpad. Now is the time to establish a sustainable, profitable enterprise that pays dividends well into the future.
The initiatives of MoFPI go further than just providing financial assistance; they are aimed at creating and nurturing long-term food value chains which are sustainable and benefit the farmers, the agro-based industry, and the consumers throughout the world.
Take the first step. Invest professionally your efforts. Make aimed submissions.
