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Published on: Jun 24, 2026

Nabard Loan For Food Processing Industry

The NABARD loan was evolved in the year 2014 which provides loans to entrepreneurs setting up food processing businesses in designated food parks through the Budget. The budgetary amount of loan is of around Rs.2000 crores with the guidelines announced by the NABARD. In this article, we look at the operational guidelines of NABARD Food Processing Fund in details and the process for getting a loan from NABARD for the food processing industry.

The guidelines can be accessed below:

 

Background

The Government of India accords top priority for the development of food processing industry in India to reduce food spoilage and control the rising food inflation. The Government has provided subsidies for setting up of food parks in India. The newly introduced food processing fund provides loans at nominal rates for setting up of food processing businesses in the food parks.

Objectives

  • To develop a cluster for the food processing sector in the country
  • To reduce the wastage of agricultural produce
  • To create employment opportunities in rural areas

Eligibility

NABARD loan for food processing is available for a wide range of post-harvest processes resulting in value addition and/or enhanced storage life to the food product. The following food processing activities such as cleaning, grading, waxing, controlled ripening, labelling, packing and packaging, warehousing, canning, freezing, freeze-drying and more are eligible under the scheme. The products of processing/manufacturing undertaken by the units may include:

  • Fruits, vegetables, mushrooms, plantation crops and other horticulture crops
  • Milk and milk products
  • Poultry and meat
  • Fish and other aquatic & marine products
  • Cereals, pulses, oilseeds and oil crops
  • Herbs, medicinal and aromatic plants, forest produce, etc.
  • Consumer food products, such as bakery items, confectionery, snacks, etc.
  • Any other ready-to-eat food/ convenience foods
  • Beverages, non-alcoholic drinks, energy drinks, carbonated drinks, packaged drinking water, soft drinks, etc.
  • Food flavours, food colours, spices, condiments, ingredients, preservatives and any other item which may be required in food processing
  • Nutraceuticals, health foods, health drinks, etc.
  • Any other activity approved by the competent authority for establishment in the designated Food Park

Eligible Entities

NABARD loan for food processing units under this scheme will be provided only for units in designated food parks. Food processing units in the following designated food parks are eligible under this scheme:

  • Food Parks promoted by Ministry of Food Processing Industries (MOFPI), Government of India
  • Mega Food Parks promoted by Ministry of Food Processing Industries (MOFPI), Government of India
  • Food Parks/ exclusive food processing industrial estates promoted by State Governments
  • Designated food processing/ agro-processing/ multi-products SEZs, including de-notified areas of these SEZs
  • Any other area having developed enabling infrastructure and designated as Food Park by Ministry of Food Processing Industries (MOFPI), Government of India
The following types of entities in the above-designated food parks are eligible for NABARD loan:

Term Loan Provided by NABARD

Under the NABARD Food Processing Fund, term loan will be provided by NABARD either directly or in-consortium with other lenders. The term loan will be provided by NABARD at concessional rate of interest for the following:

  • Development/Establishment of all infrastructure required in the designated Food Parks
  • Augmentation/modernization/creation of additional infrastructure in the designated Food Parks
  • Setting up of individual food processing units or any other unit that is established for supporting the operations of the food processing units within the designated Food Parks
  • Modernization of existing processing units in the designated Food Parks resulting in process technology up-gradation, automation, increased efficiency, improvement in product quality, reduction in cost, etc.

For undertaking the above activities, NABARD provides term loan of upto 75% of project cost for corporates, companies, SPVs, joint ventures and individual entrepreneurs. The term loan can be extended with a tenure of upto 7 years at NABARD's Prime Lending Rate (PLR) + Risk Premium. NABARD's present Prime Lending Rate (PLR) is 9.00%. A risk premium of upto 1% will be added on top of the NABARD PLR based on borrower's credit profile. In addition, collateral security will be requested by NABARD for sanctioning of term loan based on the borrower profile.

Documents Needed

  • Registration certificate or Partnership agreement for SPV
  • Auditor's Certificate
  • Profiles of shareholders and Directors
  • PAN & TAN of Special Purpose Vehicle
  • Registered Deed Details
  • State Policy on Food, Agro-processing

For more details, contact: NABARD, Plot C-24, G Block, Bandra Kurla Complex, BKC Road, Bandra East, Mumbai, Maharashtra-400051 Phone: (91) 022-26539895/96/99 The application form for NABARD can be accessed below:

 

To know more about obtaining term loan for business, visit IndiaFilings.com

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Frequently Asked Questions

Common questions about NABARD Loan for Food Processing Industry in India.

The NABARD Food Processing Fund aims to provide loans at concessional rates to entrepreneurs setting up food processing businesses in designated food parks across India. Its key objectives are to develop a cluster for the food processing sector, reduce wastage of agricultural produce, and create employment opportunities in rural areas.
A wide range of post-harvest processes resulting in value addition and/or enhanced storage life of food products are eligible, including cleaning, grading, waxing, controlled ripening, labelling, packing, packaging, warehousing, canning, freezing, freeze-drying, and more. The loan covers processing of fruits, vegetables, milk, poultry, meat, fish, cereals, pulses, oilseeds, herbs, consumer food products, beverages, food ingredients, and nutraceuticals, among others.
The NABARD loan is available only for units in designated food parks, such as those promoted by the Ministry of Food Processing Industries (MOFPI), state governments, and designated agro-processing or multi-product SEZs. Eligible entities include state governments, entities promoted by the Government of India, joint ventures, SPVs, cooperatives, federations of cooperatives, farmers' producer companies, limited companies, private limited companies, and individual entrepreneurs.
NABARD provides a term loan of up to 75% of the project cost for corporates, companies, SPVs, joint ventures, and individual entrepreneurs. The loan tenure can be up to 7 years at NABARD's Prime Lending Rate (PLR) + Risk Premium.
According to the article, NABARD's current Prime Lending Rate (PLR) is 9.00%. A risk premium of up to 1% will be added based on the borrower's credit profile.
Some of the key documents mentioned in the article include registration certificate or partnership agreement for SPV, auditor's certificate, profiles of shareholders and directors, PAN & TAN of the Special Purpose Vehicle (SPV), registered deed details, and the state's policy on food and agro-processing.
The application for the NABARD loan can be submitted at NABARD's office located at Plot C-24, G Block, Bandra Kurla Complex, BKC Road, Bandra East, Mumbai, Maharashtra-400051. The article also provides the phone number for inquiries.
The article mentions that NABARD will request collateral security for sanctioning the term loan based on the borrower's profile, but it does not specify the exact types of collateral security required.
The article does not explicitly state the maximum project cost that NABARD's term loan can cover. It only mentions that the term loan can be provided up to 75% of the project cost.
No, the article does not provide specific examples of designated food parks or SEZs that are eligible for the NABARD loan. It only mentions broad categories such as food parks promoted by MOFPI, state governments, and designated agro-processing or multi-product SEZs.