Renu Suresh

Expert

Published on: Jun 24, 2026

Revised Guidelines Of Scheme For Creation Or Expansion Of Food Processing Units

The Ministry of Food Processing Industries on 8th June 2022 has published the revised guidelines of the Scheme for Creation or Expansion of Food Processing Units. The revised guidelines will apply to new applications received against Expression of Interest (EOI). The present article briefs the scheme in detail.

Objectives of the Scheme

The primary objective of the Scheme for Creation or Expansion of Food Processing Units is listed as follows:

Create new processing & preservation units
Expansion of existing food processing units
Increasing the level of food processing
Increase value addition
Reducing food loss
Increase in farmer’s income

Eligible sectors

The following food processing sectors are qualified to get financial assistance under the Scheme for Creation or Expansion of Food Processing Units :

Fruits and vegetable processing units
Milk Processing units.
Meat, poultry, and fish processing units.
Ready-to-eat/ready-to-cook food products, Snacks, bakery, breakfast cereals, and other food products, including nutritional health foods
Grains or pulses, oilseed milling, and processing units based on the latest technology.
Modern Rice milling
Other Agri-Horti products include spices, coconut, soybean, mushroom processing, honey processing, etc.
Fruits or Honey based wines.
Natural Food flavors, food additives, food extracts and colors, oleoresins, guar gum, cocoa products, etc.
Manufacturing jaggery from sugarcane and value-added products from jaggery except sugar mills
Any other sectors that make food products fit for human consumption
Carbonated drinks/beverages containing fruit juice/pulp

Non- Eligible sectors

The activities related to the manufacture of aerated water, packaged drinking water, and carbonated drinks will not be qualified for financial assistance under the Scheme.
Also, the Sugar Mills and farming activities such as dairy farming, poultry farming, mushroom farming, hatcheries, etc., are not eligible under the scheme.

Eligible Processing Activities

The list of processing activities that are covered under the Scheme for Creation or Expansion of Food Processing Units is given below:

Sorting, grading, washing, peeling, cutting, sizing
Blanching, crushing, extraction, pulping
Drying, de-husking, splitting, depending, de-hulling, deseeding, color sorting, pulverization, extrusion, freeze-drying or dehydration, frying, etc
Pasteurization, homogenization, evaporation, concentration, etc
Packaging equipment like canning, aseptic packaging, vacuum packaging, bottling, edible packaging, labeling, any other specialized packaging, etc
Preservation activities such as pickling, chemical preservation, fermentation, or any other specialized facility are required.
Individual Quick Freezing (IQF), plate freezing, blast freezing, quick spiral freezing, etc
Controlled temperature transport like coolers, refrigerated, insulated, and ventilated transport
All other processing, preservation, storage, transport facilities, etc. to increase food products.
Firefighting equipment and insect repellents

Eligible Entities for Scheme for Creation or Expansion of Food Processing Units

Any organization or an individual; engaged in or that plans to engage in the creation/expansion/modernization of food processing and preservation capacities would be eligible for financial assistance under the Scheme for Creation or Expansion of Food Processing Units. Note: Proposal received from the Scheduled Caste/Scheduled tribe holding at least51% of stake in the entity will be treated as SC/ST proposals.

Eligible Location of Project

The proposal under the scheme will be considered both inside and Mega Food Parks / Agro-processing clusters and anywhere outside Mega Food Parks / Agro-processing clusters.

60% of the fund will be allocated to units inside the MFPs/APCs
40% of the fund will be allocated to units inside the MFPs/APCs

Eligibility Criteria

The eligibility criteria to apply for the Scheme for Creation or Expansion of Food Processing Units are explained in detail below:

The companied net worth of the applicant shall not be less than 1.5times of grants-in-aid sought under the scheme.
In-principle/term loan sanction letter (inter alia indicating whether the proposal is for expansion /up-gradation or a fresh proposal from the bank is mandatory
Term loan from the bank for an amount not less than 20% of the total project cost in respect of proposal from General areas.
In case of proposals from difficult areas or proposals from SC/St or Farmer Producer Organization or Self-Help Groups, the term loan amount shall not be less than 10% of the total project cost.
A detailed Appraisal not from the bank-specific to the proposal is also mandatory
Only one application will be accepted from an entity against the expression of interest issued under the scheme
Infusion of equity of at least 20% of the total project cost for proposal from General areas
Minimum eligible project cost will be Rs.3 crore for proposal in General areas and Rs.1 Crore in case of a proposal from difficult areas and SC/ST proposal

Note:

Expansion /up-gradation of the existing facility will not be allowed
No second proposal from an entity or promoters of an entity who have grants in aid under this scheme will be allowed.
Entities/promoters of entities that have availed financial assistance under another scheme of the ministry will be eligible for grants-in-aid only after two years from the date of commercial operation of the previous project.

Pattern of Assistance

The assistance provided under the Scheme for Creation or Expansion of Food Processing Units is as follows: Grants-in-aid will be at 35% of eligible project cost for projects in General Areas and 50% of eligible project cost for projects in difficult areas as well as for projects of SC/ST, FPOs, and SGHs subject to a Maximum of Rs.5 Crore. The grants in aid will be released in three equal installments.

Application Fee

The entities applying for financial assistance are required to submit a non-refundable fee of Rs.20, 000 through a demand draft, provided that the non-refundable fee shall be Rs, 15,000 for applications from SC/ST.

Documents Required

The documents required for the Scheme for Creation or Expansion of Food Processing Units is as follows:

Detailed Project Report (DPR) indicating the financial profile of the entity, domain expertise available with the entity, raw material availability,
CA/statutory auditor certificate prepared by the stator provision read with condition
CA/statutory auditor certificate
In-principle /final term loan sanction from a Bank
A detailed appraisal note, specific to the scheme from a scheduled commercial bank
Certificate of incorporation/registration, Memorandum, and Article of Association, Bye-laws of the society / co-operative / Self Help Group, Registered partnership deed, PAN, TAN
Bio-data /background/experience of the entity relevant to the scheme
Annual Reports, and audited financial statements of accounts for the last two years
Details of land along with relevant documents
Proof of submission of requisite fee
Quotations from original Equipment Manufacturer in respect of Plant & Machinery and equipment for the proposed project
Correspondences for possible forward or backward linkages.

Application Procedure for Scheme for Creation or Expansion of Food Processing Units

The application for the Scheme for Creation or Expansion of Food Processing Units shall be submitted online on the SAMPADA portal of the MoFPI.

The proposal will be invited by MoFPI through the Expression of Interest that will be valid for 45 days.
The ministry will constitute a Technical Committee and Project Approval Committee for scrutiny of proposals received against EOI.
The proposal found prima facie eligible will be evaluated inter-alia based on technical parameters as well as assessment criteria.
A proposal will have to obtain a minimum of 60 marks to become eligible for consideration of grants-in-aid

Note: The maximum mark will be 45 for an applicant belonging to SC/ST.

The ministry will issue an approval letter for successful application giving, inter-alia details of the project, total project cost, eligible project cost, approved grants-in-aid, completion schedule of the approved project, and other relevant details.
Once the acceptance letter and affidavit are provided, the applicant will be called Project Implementing Agency as (PIA).

Click here to get the official document of the Ministry of Food Processing Industries (MOFPI).

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Frequently Asked Questions

Common questions about Food Processing Units Scheme Guidelines by MoFPI.

The primary objective of the scheme is to create new food processing units, expand existing units, increase the level of food processing and value addition, reduce food loss, and increase farmers' income.

The eligible sectors include fruits and vegetable processing, milk processing, meat, poultry, and fish processing, ready-to-eat/cook food products, snacks, bakery items, grains or pulses processing, rice milling, processing of agri-horti products like spices, coconut, soybean, mushroom, honey, and manufacturing value-added products from jaggery, among others.

Yes, the manufacture of aerated water, packaged drinking water, carbonated drinks, and sugar mills are not eligible for financial assistance under this scheme. Additionally, farming activities like dairy farming, poultry farming, mushroom farming, and hatcheries are also not eligible.

The scheme covers a wide range of processing activities, including sorting, grading, washing, peeling, cutting, blanching, crushing, extraction, pulping, drying, de-husking, splitting, pasteurization, homogenization, evaporation, concentration, packaging, preservation activities, freezing, controlled temperature transport, and other facilities to increase the shelf life of food products.

Any organization or individual engaged in or planning to engage in the creation, expansion, or modernization of food processing and preservation capacities would be eligible to apply for financial assistance under this scheme.

The scheme provides grants-in-aid at 35% of the eligible project cost for projects in general areas and 50% of the eligible project cost for projects in difficult areas, as well as for projects by SC/ST, Farmer Producer Organizations, and Self-Help Groups, subject to a maximum of Rs. 5 crore.

Yes, the minimum eligible project cost is Rs. 3 crore for proposals in general areas and Rs. 1 crore for proposals from difficult areas and SC/ST proposals.

The required documents include a Detailed Project Report, CA/statutory auditor certificate, in-principle/final term loan sanction from a bank, a detailed appraisal note from a scheduled commercial bank, certificate of incorporation/registration, annual reports, audited financial statements, land documents, quotations for plant and machinery, and proof of application fee payment.

Applications for the scheme must be submitted online on the SAMPADA portal of the Ministry of Food Processing Industries (MoFPI) during the Expression of Interest (EOI) period announced by the ministry.

Yes, no second proposal from an entity or promoters of an entity that have received grants-in-aid under this scheme will be allowed. Additionally, entities that have availed financial assistance under another MoFPI scheme will be eligible for grants-in-aid only after two years from the date of commercial operation of the previous project.