Government Supports Small Food Processing Units Across India

The Government of India is actively supporting the growth of small and micro food processing units across the country through several central schemes. The Ministry of Food Processing Industries (MoFPI) has clarified that it does not directly set up food processing industries but provides financial incentives and policy support to encourage entrepreneurs, especially at the grassroots level.

MoFPI has stated that it does not have specific data on whether the number of local small scale food processing units has reduced after the entry of multinational companies. However, the ministry continues to focus on strengthening domestic enterprises through targeted schemes and financial assistance.

Key Schemes Promoting Food Processing Enterprises

The government is promoting food processing units through three major schemes:

• Pradhan Mantri Kisan SAMPADA Yojana (PMKSY)
• Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)
• Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME)

These schemes are demand-driven and are implemented across all states, including Uttar Pradesh, based on project proposals received from entrepreneurs.

Strong Support for Micro Units Under PMFME

Under the PMFME scheme, the ministry has approved 551 micro food processing enterprises in the Ambedkar Nagar district of Uttar Pradesh alone. These units have received credit linked subsidies worth ₹45.49 crore up to October 31, 2025. The scheme supports small businesses involved in food processing, preservation, packaging, and value addition, helping them move from informal to formal operations.

To further support organised food processing, the Government has set up a Food Processing Fund (FPF) with a total corpus of ₹2,000 crore under NABARD. Established in 2014–15, the fund provides affordable loans for setting up food processing units in government-notified food parks, reducing financial barriers for entrepreneurs.

Boost to Local Economy and Employment

These government initiatives aim to:

• Generate rural and semi urban employment
• Add value to agricultural produce
• Improve food quality and safety
• Encourage local entrepreneurship

By supporting micro and small food processing enterprises, the government is strengthening local supply chains and contributing to India’s long-term goal of expanding the processed food sector.

The information was shared by the Minister of State for Food Processing Industries, Shri Ravneet Singh, in a written reply in the Lok Sabha. The ministry reaffirmed its commitment to building a strong, inclusive, and sustainable food processing ecosystem across the country.

Official Notification 

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