Strengthening India’s Food Processing Ecosystem

Source:  PIB

Subject:   Food processing

Context: The Ministry of Food Processing Industries has reported that the Production-Linked Incentive Scheme (PLISFPI) has significantly outperformed its targets, creating 3.39 lakh jobs against a goal of 2.5 lakh by 2026.

About Strengthening India’s Food Processing Ecosystem:

What it is?

• The Food Processing Industry (FPI) acts as a high-value link between agriculture and manufacturing. It involves the transformation of raw agricultural, dairy, or marine produce into edible products through various techniques, thereby increasing shelf-life, reducing wastage, and enhancing the economic value of the produce.

Data and Statistics on Indian FPI:

• Economic Contribution: The Gross Value Added (GVA) of the sector rose from ₹1.34 lakh crore in 2014-15 to ₹2.24 lakh crore in 2023-24.
• Export Growth: The share of processed food in total agricultural exports increased from 13.7% to 20.4% over the last decade.
• Capacity Expansion: Processing and preservation capacity has increased by 34 lakh MT per annum as of February 2026.
• Investment Mobilization: Beneficiaries under the PLI scheme have reported private investments amounting to ₹9,207 crore.
• Global Footprint: Cumulative export sales of PLISFPI beneficiaries reached ₹89,053.44 crore between April 2021 and September 2025.

Opportunities in the Indian FPI:

• Raw Material Abundance: India is the world’s second-largest producer of fruits and vegetables, providing a massive resource base for processing hubs.
• Growing Consumer Base: Rapid urbanization and changing lifestyles have spiked demand for Ready-to-Eat (RTE) and Ready-to-Cook (RTC) segments.
• Global Health Trends: The rising global interest in millets and organic products provides India a niche market to export traditional and innovative superfoods.
• Supply Chain Integration: There is a vast opportunity to integrate Indian MSMEs into global value chains, particularly in segments like marine products and mozzarella cheese.
• Technological Adoption: Transitioning to advanced food preservation technologies (like IQF or Retort packaging) can drastically reduce India’s high post-harvest losses.

Initiatives Taken So Far:

• PLISFPI (2021-2027): A ₹10,900 crore scheme incentivizing incremental sales and supporting global branding of Indian food products.
• PLISMBP: A dedicated ₹800 crore sub-component carved out to promote millet-based products and value addition.
• MSME Integration: Approved 69 MSMEs and 40 contract manufacturing units under the PLI framework to foster inclusive growth.
• Branding Support: The government reimburses 50% of branding and marketing expenses abroad to help Indian brands go global.

Challenges Associated:

• Infrastructure Gaps: Inadequate cold chain facilities and last-mile connectivity still result in significant perishable wastage.
• Standardization Issues: Meeting stringent international phytosanitary and quality standards remains a hurdle for many small-scale processors.
• Fragmented Supply Chain: The presence of multiple intermediaries between the farm gate and the processor often increases costs and reduces efficiency.
• Limited MSME Credit: Despite government support, many small units struggle with high capital costs for upgrading to advanced technology.
• Low Processing Level: Currently, India processes only a small fraction of its total produce compared to developed nations, indicating an under-utilized capacity.

Way Ahead:

• Incentivizing Ancillaries: Moving toward PLI 2.0 to support ancillary industries like specialized chemicals, gases, and packaging materials.
• R&D and Innovation: Strengthening the focus on Category II products (Organic/Innovative) to capture high-value health-conscious markets.
• Digitization of Logistics: Implementing real-time monitoring of food project progress via web-based MIS to ensure timely execution.
• Aggressive Global Branding: Utilizing the Category III incentives to establish Indian Food as a premium, safe, and sustainable global brand.
• Skill Development: Training the rural workforce to operate advanced production lines, ensuring that the 3.39 lakh jobs created are high-skill and sustainable.

Conclusion:

The Production-Linked Incentive Scheme has successfully transitioned India’s food processing sector from a fragmented landscape to a globally competitive ecosystem. By bridging the gap between agriculture and industry, the scheme ensures that Make in India also feeds the world while empowering millions of local farmers and MSMEs. Progress in this sector is the key to achieving a truly resilient and inclusive Viksit Bharat by 2047.