Production Linked Incentive (PLI) – Food Processing

PLI Scheme - Overview

Government of India (GOI) has approved a new Central Sector Scheme – “Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)” for implementation during 2021-22 to 2026-27 with an outlay of Rs. 10,900 crore.

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 being implemented by Ministry of Food Processing Industries (MoFPI). The tenure of the scheme is six years from Financial Year 2021-22 to Financial Year 2026-27. Support under the scheme shall be provided only to the Applicants engaged in manufacturing of food products in India & sales of such products covered under the target Segments. All eligible Applicants shall be ranked on the basis of marks obtained in the evaluation criteria as given on the followed slides. The scheme has three broad components as below:-

vCategory I – The first component relates to incentivizing 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.

vCategory II – The second component is for incentivizing Innovative/ Organic products of SMEs across all the above four food product segments including Free Range – Eggs, Poultry Meat & Egg Products.

vCategory III – The third component relates to support for branding and marketing abroad to incentivize the emergence of strong Indian brands.

Category I :Food Products Segments (Eligibility | Incentive)

Under the Scheme, the following four Segments of food products are covered:

Segments	Minimum Sales of All Food Products in 2019-20 (Rs Crore)	Minimum Investment (Rs Crore)	CAGR(%)
RTE / RTC	500	100	10%
Processed Fruits & Vegetables	250	50	10%
Marine	600	75	5%
Mozzarella Cheese	150	20 MTPD Plant – Rs 23Cr	15%

Per the Scheme, rates of Incentives on Incremental Sales:

Year	RTE/RTC	Processed Fruits & Vegetables	Marine	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%

For selection of applicants on ‘Sales & Investment Criteria’ is based on combined score Total Sales (Domestic & Exports) in 2019-20 of food products, export sales, minimum CAGR in sales over the base year and committed investment. Base Year for calculation of Incremental Sales and Incentive payable would be the value of Sales of the Applicant in FY 2019-20 for the first 4 years. For 5th & 6th years, the base year would shift to FY 2021-22 & FY 2022-23 respectively.

Category II: Innovative / Organic Products (Eligibility | Incentive)

Under the Scheme, the following are covered under this category:

I.Udyog Aadhar/ Udyami Registered;

II.Achieved Minimum Sales of Rs 1 crore during 2019-20 for each of the innovative/ organic products proposed to be incentivized;

III.Applicant for Organic Product shall be registered with APEDA for the organic product proposed to be incentivized.

For applicants of Innovative Products selection is based on-

üSale of Product sought to be promoted in 2019-20.

üCAGR in Sale of Products sought to be promoted for 3 years (2016-17 to 2019- 20).

üInvestment made in the last 3 years (2017-18 to 2019-20).

üAvailability of funds for investment in Production & Marketing (Own fund, Loan, tied up from Private equity, Venture Capital, Angel Investors).

üAssessment of Innovativeness/ novelty of products, patent on the product, USP, Recognition if any, Special Characteristics, Business plan, export potential, scalability, share of own manufacturing in total Sales.

For applicants of Organic Products selection is based on-

üSale of Product sought to be promoted in 2019-20.

üCAGR in Sale Products to be promoted for 3 years (2016-17 to 2019-20).

üInvestment made in the last 3 years (2017-18 to 2019-20).

üAvailability of funds (tied up from Private equity, Venture Capital, Angel Investors) for investment in Production & Marketing.

üAssessment of the USP, level of product development, Business plan, export potential, scalability, share of own manufacturing of product in total Sales.

Category – III: Branding & Marketing (Eligibility | Incentive)

Under the Scheme, the following are covered under this category:

I.Only Indian Brands are covered for selling food products completely manufactured in India;

II.Branding & Marketing shall be undertaken either by the Applicant directly or through its subsidiary or any other Agency.

vAn indicative list of activities covered under Branding & Marketing are in-store Branding, Shelf Space Renting, Listing Fee, Electronic/ Social Media and Print Media, outdoor publicity, billboard, commercial advertisement on channels etc.

For applicants of Category – III selection is based on-

üSale* of Food Products of Brand/s sought to be promoted in 2019-20.

üCAGR in Sale* of Products of Brand/s sought to be promoted for 3 years (2016- 17 to 2019-20).

üBranding Expenditure 3 years (2017-18 to 2019-20) for both Domestic and Export.

üLevel of recognition of the Brand in India, level of value addition, Strategy and plan for production, Sales, exports and branding of products in domestic and export markets.

NOTE:

* Sale of own brand “branded food products” to the exclusion of unbranded food products.

* If a Category-I Applicant wants to avail of the grant for Branding & Marketing abroad, it has two options. Applicant could apply for Branding & Marketing under both Categories I & III. If such an Applicant is selected in Category-I, the application in Category- III would become infructuous. If tha applicant is not selected in Category-I, the application under Category-III would be considered.