Guidelines on Production Linked Incentive (PLI) Scheme for Food Processing Industry

PLISFPI aims to provide support and aid to the Applicants engaged in the manufacturing of food products in India and sales of such products

The Indian government recently approved a new Central Sector Scheme - ‘Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)’ with an outlay of INR 10,900 crore. The tenure of the Scheme is six years from Financial Year 2021-22 to Financial Year 2026-27. The objective of this scheme was to support the creation of global food manufacturing champions, promote Indian brands of food products, increase employment opportunities for off-farm jobs, ensure remunerative prices of farm produce, and higher income to farmers.
 
The Scheme has been divided into three broad components:
 
  • The first component relates to incentivizing manufacturing of four major food product segments viz. Ready to Cook/ Ready to Eat (RTC/ RTE) including millet-based foods, Processed Fruits & Vegetables, Marine Products & Mozzarella Cheese.
  • The second component is for incentivizing Innovative/ Organic products of Small and medium-sized enterprises (SMEs) across all the above four food product segments including Free Range - Eggs, Poultry Meat & Egg Products.
  • The third component relates to support for branding and marketing abroad to incentivize the emergence of strong Indian brands 
 
Who all can apply for this scheme?
 
The following entities can apply under this Scheme for incentives or  financial benefits based on the increase in Sales of the eligible products :
 
  • Proprietary Firm or Partnership Firm or Limited Liability Partnership (LLP) or a Company registered in India
  • Co-operatives
  • SME and making an Application for seeking approval for coverage under the Scheme.
  • A Company applying on its own behalf and its subsidiary provided the Applicant company holds more than 50% of the stock of its subsidiary and that none of such subsidiary company is included in any other Applicant company under the Scheme
  • Marketing Federation or Apex level co-operatives applying on behalf of Member Unions or Member co-operatives in the case of cooperatives.
 
 
The types of applicants can be further categorised as follows:
 
  • Applicants, which are large entities, who apply for Incentive based on Sales and Investment Criteria. Applicants under this category could undertake Branding & Marketing activities abroad also and apply for Incentives under the scheme.
  • SMEs Applicants manufacturing innovative/ organic products who apply for PLI Incentive based on Sales.
  • Applicants applying solely for Incentive for undertaking Branding & Marketing activities abroad.
 
 
Coverage of Food Products under Different Food Segment:
 
Under the Scheme, the following four Segments of food products are covered:
 
  • Ready to Eat/ Ready to Cook: RTE/RTC Category covers various processed packaged products ranging from Ready Meals, Soups and Ready Mixes, Ice Cream desserts, Snack bars, Bakery products, Ready to drink products etc. RTE/RTC category excludes agri products/ food commodities like rice, Aata, sugar, pulses, edible oil etc.
 
  • Fruits & Vegetable: This category includes packaged processed products which are Steamed/ Boiled/Frozen/ Dried/ Pickled/ Provisionally Preserved/ processed or preserved through additive and preservatives. However, potato chips are excluded from the scheme.
 
  • Marine products: This category includes fish products (Chilled/ Frozen/ dried/ salted/ brined/ smoked) and Crustacean & Molluscs (Chilled /Frozen /Steamed / Boiled) at normal rate of incentives.
 
  • Mozzarella Cheese: This category includes mozzarella cheese packed in consumer pack/ bulk pack.
 
 
Eligibility criteria under this Scheme:
 
The Scheme aims to provide support and aid to the Applicants engaged in manufacturing of food products in India and sales of such products covered under the target Segments. SME Applicants should engage in such activities for innovative/ organic food products.
 
  • The Applicants must indicate the Product Groups as specified under Coverage of Food Products under Different Food Segment in the Application for coverage under the Scheme. The Application can also include those products which the Applicant is not manufacturing currently but intends to manufacture during the project period. If a selected entity starts manufacturing a new product, covered in the Segment approved for the Applicant, the same could be added later after notifying the same to either Ministry of Food Processing Industries (MOFPI) or Project Management Agency (PMA).
  • The entire chain of manufacturing processes, including primary processing, of the food products of the relevant segment applied for coverage under the Scheme, must take place in India. However, for additives, flavours and edible oils, this condition would not apply.
  • The entire chain of the manufacturing process of food products, starting with raw materials, must be specified in the Application in respect of food products included in the Application and having sales above INR 50 crore per annum.
  • The Applicant should not have been declared as bankrupt or wilful defaulter or defaulter or reported as fraud by any bank or financial institution or non-banking financial company.
  • The Applicant/ Promoters should not appear in the SEBI Debarred List.
 
 
Promotion of Indian Brands Abroad through Branding & Marketing under this Scheme:
 
Investment under this Scheme means expenditure incurred on the installation of new plant & machinery, technical civil work and associated infrastructure Therefore, the incentives under this Scheme are extended for the promotion of only Indian Brands abroad. The intention behind supporting branding is for developing a market for all Indian food products in branded consumer packs.

An indicative list of activities covered under Branding & Marketing includes in-store Branding, Shelf Space Renting, Listing Fee, Electronic/ Social Media and Print Media, outdoor publicity, billboard, commercial advertisement on channels etc. The expenditure to carry all of it does not cover trade discounts, expenditure incurred on distribution, and overseas logistics expenditure.

In order to benefit under this, the entities have to submit a five-year plan or for balance period of the tenure of the scheme (also indicating the activity-wise current level of expenditure on in-store Branding & marketing) in the target markets for availing such assistance. The proposals should clearly indicate the Brand/ food products proposed to be promoted. The Applicant may later also include products that the Applicant has not covered at the Application stage after notifying the same to MoFPI/ PMA.

Applicants will be extended financial incentives at 50% of expenditure on Branding & Marketing abroad subject to a maximum grant of 3% of Sales of food products or INR 50 crore per year, whichever is less. The minimum expenditure for Incentive is INR 5 crore over a period of five years. In such a case, an admissible grant would be INR 2.5 crore.
 
Application Process:
 
Applications will be invited through Expression of Interest (EOI) under this Scheme.
  • The EOI is usually released for Applicants for coverage under Sales-based Incentive and Branding/ Marketing. The selection will be for the entire programme period.
  • The EOI SME Applicants for innovative/ Organic products for Sales-based Incentive is released for Branding & Marketing during each of the first 3 years viz. 2021-22, 2022-23, and 2023- 24 depending upon the availability of fund. The coverage of such Applicants will be for the balance of the programme period.
MoFPI will consider the further release of EOI depending upon the response of different Categories of Applicants and availability of funds. Application Window will be specified in the EOI and no Application would be accepted after the end of the Application window.
 
The applicant is required to submit the Application as per the Application Form prescribed under the Scheme by providing for the following:
 
  • An Applicant must specify his / her own and contract manufacturers’ manufacturing sites which are proposed to be used for sourcing of eligible manufactured products for Sale.
  • An Applicant must submit an undertaking consenting for audit of their manufacturing sites/ offices for verification of information/ data submitted along with the Application.
 
On receipt of an Application in the prescribed format, PMA will conduct an examination as per the checklist. The said examination should be completed within 15 working days from the date of receipt of the original Application window or any subsequent submission of the revised Application if the original filling was returned as incomplete earlier. No original Application will be accepted after the end of the Application window. In case, on the above-mentioned examination, an Application is found to be incomplete, PMA must inform the Applicant accordingly within 15 working days of receipt of the Application. An Applicant must complete an incomplete application within 10 working days of such communication from PMA, failing which the application would be rejected under intimation to the Applicant.
 
Submitting an application Online:
 
  • All applications can be submitted through an online portal maintained by the PMA.
  • Upon successful submission of an Application, PMA will issue a unique Application ID to the Applicant for all future references pertaining to the Scheme.
  • The application can be made on the online portal, which is https://plimofpi.ifciltd.com