Production Linked Incentive (PLI) Scheme for Food Processing Industry

The scheme "Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)" has been launched by the Ministry of Food Processing Industries, Government of India. The objective of the scheme is 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 is implemented by the Ministry of Food Processing Industries through a Project Management Agency (PMA) for application processing, verification, and disbursement. The tenure of the Scheme is six years from Financial Year 2021-22 to Financial Year 2026-27. The Incentive payable for a particular year will be due for payment in the following year. The Incentive payable for 2026-27 will be due for payment in 2027-28.

Components:

• The objectives are sought to be achieved through the introduction of a Production Linked Incentive (PLI) Scheme. The scheme has three broad components.
• The first component relates to incentivising the 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 incentivising Innovative/ Organic products of 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 incentivise the emergence of strong Indian brands.

Incentive:

1. Investment shall mean expenditure incurred on the installation of new plant & machinery, technical civil work and associated infrastructure by the Applicant and its contract manufacturers. All non-creditable taxes and duties are included in expenditure.
2. The incentive is calculated as: Incremental Sales × Applicable Rate of Incentive.1. The applicable incentive rates vary across segments and years:

• Ready-to-Cook/Ready-to-Eat and Processed Fruits & Vegetables: 10% in initial years, gradually reducing to 8%.
• Marine Products: 6% to 4% (10% for value-added marine products).
• Mozzarella Cheese: 10% to 4%.

1. The incentive is payable from the year of selection till the end of the scheme period.
2. The applicant must achieve the minimum Compound Annual Growth Rate (CAGR) in sales to be eligible for the incentive.

Branding and Marketing:

1. Financial support is provided for the promotion of Indian brands in international markets.
2. The scheme provides 50% reimbursement of expenditure incurred on branding and marketing activities.
3. The support is subject to a maximum of 3% of sales of food products or ₹50,00,00,000/- per year, whichever is lower.
4. The minimum eligible expenditure for claiming the incentive is ₹5,00,00,000/- over a period of 5 years.
5. Eligible activities include in-store branding, shelf space renting, listing fees, media advertising, and promotional campaigns.

Coverage of Multiple Food Segments:

1. Incentives are provided for manufacturing and sales in the following segments:

• Ready-to-Cook / Ready-to-Eat food products (including millet-based products)
• Processed Fruits and Vegetables
• Marine Products
• Mozzarella Cheese
• Innovative and Organic products of SMEs

1. Support under the scheme shall be provided only to the Applicants engaged in the manufacturing of food products in India & sales of such products covered under the target Segments. SME Applicants should engage in such activities for innovative/ organic food products.
2. Eligibility criteria, in terms of total Sales of food products and Minimum Investment for different Categories of Applicants, are given in Appendix A. An applicant shall have a total sale of food products above the minimum sales given in Appendix A in the Base Year. For the purpose of minimum sales, here the food products mean any food product sold in consumer packs including the food products included in the four segments given in Appendix B. An applicant shall agree to undertake a minimum investment as given in Appendix A. However, if more applicants are there than the number to be selected finally in a segment, then the selection criteria include committed investment that the selected company proposes to make by the end of the year 2022-23. The committed investment shall be greater than the Minimum investment given in Appendix A.1. Product Groups/ Products covered under different Segments for selection of Applicants are given in Appendix B.1. The Applicants shall indicate the Segment and the Product Groups in that Segment in the Application for coverage under the Scheme.
3. The Applicant may also include those products that the Applicant is not currently manufacturing 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 MOFPI/ PMA.
4. The entire chain of manufacturing processes, including primary processing, of the food products of the relevant segment applied for coverage under the scheme shall take place in India. However, for additives, flavours and edible oils, this condition would not apply
5. The entire chain of manufacturing process of food products, starting for raw materials, shall be specified in the Application in respect of food products included in the Application and having sales above Rs 50 crore per annum.
6. Applicants are eligible to apply for one or more Segments under Category I. However, such Applicants will be required to make separate Applications for each of the product segments and meet minimum Sales and investment criteria for each of the Segments applied for.
7. 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 nonbanking financial company. The Applicant/ Promoters should not appear in the SEBI Debarred List.

Note:

• Category I: Applicants are large entities that apply for incentives based on Sales and Investment Criteria. Applicants under this category could undertake Branding & Marketing activities abroad also and apply for Incentives under the scheme.- Category II: SMEs Applicants manufacturing innovative/ organic products who apply for PLI Incentive based on Sales.- Category III: Applicants applying solely for the incentive for undertaking Branding & Marketing activities abroad.

Online

Step 1: The application will be invited through an Expression of Interest (EOI) released by the Ministry of Food Processing Industries.
Step 2: The applicant should check the EOI for details such as the application window, eligibility, and categories. No application will be accepted after the end of the application window.
Step 3: The applicant should visit the online portal: https://plimofpi.ifciltd.com.
Step 4: The applicant should fill in the application in the prescribed format as per Annexure-1 on the portal.
Step 5: The applicant should specify details of their own and the contract manufacturers’ manufacturing sites proposed for sourcing eligible products.
Step 6: The applicant should upload all required documents and submit an undertaking (as per Annexure-7Consenting to the audit of manufacturing sites/offices.
Step 7: The applicant should pay the non-refundable application fee:

• ₹1,00,000/- for Category-I applicants
• ₹10,000/- for Category-II applicants
• ₹10,000/- (SMEs) and ₹50,000/- (other applicants) under Category-III

Step 8: After submission, a unique Application ID will be generated by the Project Management Agency (PMA) for future reference.
Step 9: The PMA will conduct a preliminary examination of the application as per Annexure-2 within 15 working days of receipt.
Step 10: If the application is found incomplete, the applicant will be informed within 15 working days, and the applicant must rectify the deficiencies within 10 working days, failing which the application will be rejected.
Step 11: The application will be processed by PMA and recommended to the Ministry of Food Processing Industries (MoFPI) for approval.
Step 12: All applications will be finalised within 90 days from the closure of the application window, subject to completeness of documents.
Step 13: After approval, the PMA will issue an approval letter within 5 working days, specifying details such as product segment, base year sales, projected incremental sales, incentive rates, committed investment, and production schedule.
Step 14: The selected applicant must submit a performance bank guarantee of 3% of the committed investment within 2 weeks of approval.