Introduction to PLI Subsidy for Food Processing Industry
The PLI Subsidy for Food Processing Industry is one of India’s most powerful government incentives that reimburses companies based on incremental sales of eligible processed food products. Introduced under the Ministry of Food Processing Industries (MoFPI), the scheme aims to boost innovation, value addition, exports, and create globally competitive food brands.
Businesses receive two benefits:
- Subsidy (incentive) on incremental sales
- Branding & Marketing Grant for promoting products in international markets
The official PLI Scheme for Food Processing Industry clearly states that incentives are linked to sales growth, investment commitment, and performance verification. The incentive is not “project-based” — it is earned only after achieving incremental revenue over a base year.
What Is PLI Subsidy for Food Processing Industry?
The PLI Subsidy is a financial incentive under the Production Linked Incentive food processing scheme, rewarding companies for actual growth in business.
The more you sell, the more subsidy you receive.
Eligible product segments under the scheme:
Eligible Category | Segment Examples |
Ready-to-Eat (RTE) / Ready-to-Cook (RTC) | Snacks, convenience food, bakery items |
Processed Fruits & Vegetables | Dehydrated fruits, jam, puree, vegetable products |
Marine Products | Frozen seafood, value-added fish products |
Mozzarella Cheese | High-demand commercial production |
These product categories are defined in the government guidelines and qualify for incentive claim submission.
Who Can Claim PLI Subsidy?
PLI Eligibility Criteria for Food Processing
To apply under the PLI Scheme for Food Processing Industry, companies must fulfill specific eligibility criteria.
Basic PLI eligibility criteria food processing include:
- The company must operate in one of the eligible product segments.
- Company must demonstrate incremental sales and incremental investment.
- Therefore, every applicant must commit a minimum investment as declared during the application process.
- Financial statements should be audited and traceable.
- Must not have defaulted on government dues.
This scheme evaluates real performance, not future projections.
Applicant Categories Under the Scheme
Category | Segments / Requirements | Minimum Sales in FY 2019-20 (₹ Crore) | Minimum Investment (₹ Crore) |
Category-I | RTE / RTC (Ready-to-Eat / Ready-to-Cook) | 500 | 100 |
Processed Fruits & Vegetables | 250 | 50 | |
Marine Products | 600 | 75 | |
Mozzarella Cheese | 150 | 10 MTPD Plant – ₹23 Cr | |
Category-II | (i) Must be Udyog Aadhaar / Udyami registered.(ii) In addition, the company must have achieved ₹1 crore minimum sales during 2019-20 for each innovative or organic product.(iii) Applicants for organic products must be registered with APEDA. | — | — |
Category-III | (i) Only Indian brands selling food products manufactured in India are covered.(ii) Branding & marketing to be undertaken by the applicant or authorized agency. | — | — |
Finraja Consultancy Pvt. Ltd. provides complete guidance for businesses under Category-I, II, and III to qualify for government food processing and branding subsidies. From eligibility checks and DPR preparation to online application submission, Finraja ensures smooth subsidy approval for MSMEs, startups, and large enterprises.
To support inclusivity, the government has also created SME-specific incentives, ensuring that smaller manufacturers can benefit from the scheme as well.
Committed Investment Under PLI
Why This Requirement Exists
A critical requirement during application, therefore, is the Committed Investment under PLI.
Committed investment means:
Specifically, the applicant must declare how much money will be invested in plant & machinery, technology, equipment, or quality improvement.
Once this amount is submitted, the company must prove:
Funds were utilized
Assets were purchased
They align with scheme objectives
However, this declared amount cannot be changed later, and incorrect declarations may lead to disqualification or delayed subsidy approval.
PLI Subsidy Amount & Incentive Rates
The subsidy is calculated on incremental sales, meaning:
Subsidy = Incremental Sales × Incentive Rate
General structure (as per official guideline model):
Year | Incentive Rate (Example-based) |
Year 1 | Highest rate (boost to initial expansion) |
Year 2–4 | Gradually decreasing |
Final Year | Lowest rate |
This declining model motivates companies to maximize sales early.
Rates of Incentives on Incremental Sales (Year-wise % Subsidy)
| Year | RTE / RTC | Processed Fruits & Vegetables | Marine Products* | Mozzarella Cheese |
|---|---|---|---|---|
| 2021–22 | 10% | 10% | 6% | 10% |
| 2022–23 | 10% | 10% | 6% | 10% |
| 2023–24 | 10% | 10% | 6% | 10% |
| 2024–25 | 10% | 10% | 6% | 8% |
| 2025–26 | 9% | 9% | 5% | 6% |
| 2026–27 | 8% | 8% | 4% | 4% |
Key point:
Consequently, the incentive percentage varies for each category, but higher incremental sales lead to higher subsidy.
Branding & Marketing Grant under PLI Scheme
A Unique Benefit Most Companies Miss
The Branding & Marketing Grant PLI Scheme reimburses up to 50% of international branding & marketing expenses.
Eligible promotional expenses include:
- Trade fairs & expos abroad
- Advertising in foreign markets
- Launching products in overseas retail markets
- Digital marketing / distribution-related expenses internationally
This helps companies convert Indian food brands into global export-ready brands.
Why Businesses Prefer Consultancy Assistance
Consultants save time and reduce risk by:
- Assessing eligibility before application
- Preparing financial projections for incremental sales
- Ensuring investment trail matches committed investment
- Preparing bank guarantee, CA certificates, & reporting formats
- Coordinating with PMA until subsidy is released
Finraja Consultancy ensure that companies don’t lose subsidy due to procedural mistakes.
Businesses should focus on manufacturing and sales growth —
the subsidy paperwork should be handled by professionals.
FAQ
Q1. What is PLI Subsidy for Food Processing Industry?
A performance-based incentive scheme that reimburses companies based on incremental sales.
Q2. Can SMEs apply for PLI subsidy?
Yes. Category-II is designed specifically for SMEs and emerging food brands.
Q3. Are branding and marketing costs covered under the PLI Scheme?
Yes, under the Branding & Marketing Grant, up to 50% of international promotional expenses are reimbursed.
Q4. Is this subsidy automatically given once applied?
No. Subsidy is released only after achieving incremental sales and proper documentation.
Conclusion
As a result, if your company qualifies, the PLI subsidy can significantly improve your ROI, reduce financial burden, and accelerate expansion — but only when the application and documentation are flawless.
Call us now: +91 9373114747 or visit finraja.com/contact for quick assistance.
