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Creation/ Expansion of Food Processing/ PC (Unit Scheme) 

The Ministry of Food Processing Industries (MoFPI) has introduced a scheme to support the setting up of new food processing units and the modernization/expansion of existing ones. This scheme aims to enhance the food processing infrastructure both within Mega Food Parks (MFPs) and Agro-processing Clusters (APCs) as well as in locations outside these designated areas.

Components of the Scheme

  1. Setting Up of New Units:

    • Establishing new food processing facilities (Civil Work).
    • Procuring plant and machinery.
    • Technical civil works.
  2. Modernization/Expansion of Existing Units:

    • Upgrading existing facilities.
    • Adding new processing lines.
    • Enhancing storage, packaging, and quality testing facilities.

Financial Assistance

  • Grant-in-aid:
    • General Areas: 35% of the eligible project cost.
    • North East States, Himalayan States, ITDP Areas, SC/ST Candidates, FPOs, and SHGs: 50% of the eligible project cost.
  • Maximum Grant Ceiling: ₹5 Crores.

Fund Allocation

  • Units inside MFPs/APCs: 60% of total fund allocation.
  • Units outside MFPs/APCs: 40% of total fund allocation.

Eligibility Criteria

  1. New Units:
    • Projects for setting up new food processing units in MFPs/APCs or outside these areas.
    • Open to individual entrepreneurs, companies, cooperatives, FPOs, SHGs, and government agencies.
  2. Modernization/Expansion:
    • Existing units seeking to upgrade their facilities and increase capacity.

Application Process

  1. Submission of Proposal:
    • Detailed project report outlining the project components, cost estimates, and expected outcomes.
    • Documentation of eligibility, including area classification and organizational status (e.g., FPO, SHG).
  2. Approval Process:
    • Proposals reviewed by an expert committee for technical and financial feasibility.
    • Sanctioning of grants based on merit, compliance with guidelines, and availability of funds.

Detailed Cost Breakdown

  1. New Units/Modernization:
    • Example Calculation (Eligible Basic Cost):
      • Project Cost: ₹10 Crores.
      • General Area Grant: ₹3.5 Crores (35% of ₹10 Crores).
      • Difficult Area Grant: ₹5 Crores (50% of ₹10 Crores).
      • Note: Maximum grant is capped at ₹5 Crores.

Implementation Plan

  1. Project Initiation:

    • Preliminary assessment and proposal submission.
    • Approval and sanction of grants.
  2. Infrastructure Development:

    • Establishment of new processing units or modernization of existing ones.
    • Procurement and installation of machinery and technical civil works.
  3. Operational Phase:

    • Commencement of processing activities.
    • Production, storage, and quality testing of processed food products.
  4. Monitoring & Evaluation:

    • Regular review of project progress.
    • Ensuring adherence to the grant utilization guidelines.
    • Periodic auditing and inspection by MoFPI.


The MoFPI scheme for setting up and modernization/expansion of food processing units aims to enhance the infrastructure and capacity of the food processing industry. By providing substantial financial assistance for both new and existing units, the scheme ensures the development of a robust food processing sector, promoting inclusive growth and optimizing fund allocation between MFPs/APCs and other areas.

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