The Indian food processing industry’s growth has reached an all-time high. Current actions taken by the government indicate that the entire gastronomical world has shifted from ‘farm-to-table’ to ‘farm-to-global-factory,’ and barriers to entry are becoming increasingly relaxed.
According to the Ministry of Food Processing Industries (MoFPI)’s Report for the Year 2024-2025, this industry contributes to 8.45% of agricultural GVA, and 7.93% of the manufacturing GVA. Food exports totaled 46.43 billion dollars in FY 2023-2024.
MoFPI is in charge of the Production Linked Incentive scheme, complemented by the Mega Food Parks, and Agro Processing Clusters. Financing for the development of their ecosystems is enabled by these to help entrepreneurs convert the agricultural surplus of the country to high-value export ready food.
Food Processing Sector: Snapshot of Opportunity
Between 2014 and 2023, the food processing sector was able to add 6.55% of GVA, along with 7.22 billion dollars of Foreign Direct Investment (FDI) in the past decade. There are 22.96 lakh registered and 46.57 lakh unregistered workers in this sector.
Fast growth for this industry is highly sought after by many startups given the infrastructure set by the PLISFPI and Food Park facilities. The industry is currently set to face lower risk, and higher competition.
MoFPI’s Production Linked Incentive Scheme (PLISFPI)
What Is PLISFPI
PLISFPI is the scheme which is supported financially by the government and motivates increment by revenue from exports. It focuses on the expansion that is a high increase with a defined value indicators exports. There is innovation and financial support during the globe expansion period of the Startups.
Focus Sectors
- Frozen and chilled ready to eat and ready to cook meals
- Processed fruits and vegetables
- Seafoods and other derivative marine products
- Specialty and other foods including dairy products
- Health and nutraceutical foods
Impacts on Startups
PLISFPI reduces the scaling operations and financial risks which the activities of a startup pose. It also stimulates innovation and branding. For example, a startup with a millet based snack is able to easily access the PLISFPI as entry to the US and EU Markets.
Mega Food Parks: A Growth Catalyst
Concept
Mega Food Parks share a uniform set of facilities including cold storage, a processing unit, a warehouse, and integrated logistics, as well as quality control labs, processing, and overall integrated system.
Advantages for Startups
Startups benefit from the low capital investment on the shared services which raises profits. Improved overall performance from the gained operational efficiency in the supply chain logistics enhances the value added. Along with the clusters of raw materials and buyers, this also enables rapid entry to the market.
The Status
In the states of Punjab, Gujarat, Tamil Nadu, and Maharashtra, the Mega Food Parks are functional and operative. Each is aided with district-level specialization agro-processing clusters. Operational use thirty over are functional and operational.
Agro-Processing Clusters: Localized Capacities
Agro-Processing Clusters are directed towards the One District One Product (ODOP) strategy. For instance:
– Nagpur oranges’ juice and concentrate processing
– Varanasi mango pulp and puree
– Kerala spices oleoresin and essential oil
Startups benefit from very low distance to market, guaranteed raw materials, and sole-supply branding.
Read More: Steps to Start Food Processing Business
New Business Opportunities from PLISFPI and Food Parks
Cereal and Grain Processing
Cereals and grains is an industry wherein India has an export worth USD 10.9 billion. Startups can initiate the production of millet snacks or fortified rice, gluten free flour.
Thereafter, India’s inexpensive Mega Food Parks reduce operational expenses with shared and centralized cold storage and testing labs. Thus, these items can efficiently reach the international and domestic market.
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Processing of Fruits and Vegetables
India has proficiently achieved around USD 1.15 billion in export of fruits and vegetables. Prospective entrepreneurs may diversify into developing dehydrated and freeze-dried fruit products as well as juice concentrates.
Read More: Start your own Micronutrient Fortified Blended Energy Dense Food Manufacturing Business
Moreover, Cold Chain Agro-Processing Clusters Use emerging technologies combined with cold chains to improve quality and ensure longer shelf life, resulting in glossy value-added products for local and export markets. This ultimately uplifts the business prospects for local entrepreneurs at the global level.
Processing of Spices and Oleoresins
India exports spices and oleoresins worth recently estimated around USD 4.7 billion. Startups may choose to address the untapped organic spice oils and nutraceutical extracts market, especially for exports.
These products, manufactured in the cluster-based plants, reduce infrastructure spending while offering stable access to necessary primary materials. The growing global demand for clean label functional spices, and dominantly specialized spice products is fostering the high-end spice market growth.
Processed Dairy and Marine Foods
India exports dairy products at an estimated value of 625 million UDS, and marine products over 7 billion UDS. Target markets for entrepreneurs include value-added products like, lactose free powders, frozen halal seafood, and facilitation of halal frozen meat.
Food Park infrastructure design helps to maximize return on investments while meeting foreign quality standards, hence improving competitiveness in the global market.
Sugar and Sugar Confectionery
The exportation of sugar and sugar confectionery from India netted 3.29 billion USD. New entrepreneurs may wish to focus on specialty confectionery, sugarless sweets, and organic jaggery. Furthermore, the Food Parks provide shared processing and packing, which leads to faster global market access and economies of scale.
Gearing Startups Towards Export-Import Mismatches
India continues to spend huge funds on imports such as,
- Edible oils (USD15b) → Uncle’s Sunflower, Mustard, Soybean oil processing start-up
- Cocoa & chocolate (USD513m) → artisanal chocolate ventures
- Beverages & Vinegar (USD1.5b) → breweries, craft vinegar, and fruit wines
Startups while using Food Parks and PLISFPI focus incentives will be able to import less and save money.
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Success Stories of MSME
- LT Foods (Daawat Rice): LT Foods started off as a small trader of rice, which allowed the company to grow to the global trader it is now. – LT Foods (Daawat Rice): LT Foods started off as a small trader which allowed the company to grow to a global trader.
- Everest & MDH Spices: Family run MSMEs Everest and MDH associates currently both stand tall as billion dollar companies due to the growth of their respective companies. – From humble beginnings as Family run MSME’s, both Everest and MDH Spices currently stand tall as billion dollar companies.
- Paper Boat: In competitive markets, Paper Boat stood out due to successful integration of traditional recipes and appealing attractive modern packaging sophisticated global markets. As a result, Paper Boat’s successful integration of appealing modern attractive sophisticated global packaging with traditional recipes helped competitive markets stand out.
- Key Lesson: The emphasis is on how value addition with proper investment on branding and effortless government aids can bring business success. – The emphasis is on how value addition can bring unprecedented success along with effortless government aids.
How NPCS Can Support You
Niir Project Consultancy Services (NPCS) is dedicated to helping startups and entrepreneurs transform their ideas into successful ventures. To achieve this, we prepare Detailed Project Reports (DPRs) that cover the entire project spectrum.
First, we focus on the techno-process-oriented manufacturing aspects. Next, we provide market research and demand forecasting, followed by process flow charts, product mix and capacity planning, and optimization of machinery and raw materials. Additionally, we include comprehensive financial projections and guidance on contractual agreements.
Moreover, NPCS assists clients in selecting the right projects and identifying untapped subsegments of the market. By leveraging government subsidies and strategic planning, startups can confidently scale their operations into profitable food processing ventures.
Roadmap for Entrepreneurs
Identify opportunity using MoFPI’s Nivesh Bandhu portal
- Choose infrastructure: Mega food parks or Agro-Cluster
- Apply for incentives: PLISFPI, PMKSY, PMFME
- Ensure compliance: FSSAI, HACCP, ISO, and other Export Certifications
- Leverage technology: automation, IoT, AI
- Build brands: develop a have ready to go International quality product from India
NPCS can assist with DPRs and expansion plans.
Find the Best Idea for Yourself With our Startup Selector Tool
Conclusion
A prime example of the multifaceted growth paradigm of India’s Food Processing Sector would be the PLISFPI program specialist incentives.
This program offers PPE risk free opportunities, affordable food parks with first-rate amenities, and rapid infrastructure development for the purpose of scaling operations.
Assuming these conditions were met, new-age processors would be able to maximize competitive business growth on an international level and also be an active participant in bridging the gaps for import and export.
The strengthening of international ties would subsequently enhance the business political brand image in India. Guided with mentorship and practical learning mechanisms provided by NPCS, these entrepreneurs would be fully capable of achieving said competitive independence within the food manufacturing domain.
5 FAQs
What does PLISFPI mean?
PLISFPI is an acronym for Production Linked Incentive Scheme for Food Processing Startups aimed at promoting the sale and export of processed food.
In What Ways Do Mega Food Parks Assist Startups?
They help reduce overhead by providing warehousing and processing facilities and coordinated transportation.
Which Areas Are Most PLISFPI Eligible?
Cereals and grains, fruits and vegetables, spices and oleoresins, dairy and seafood, sugar and confectioneries.
Can These Small Scale Startups Engage In Exporting?
Yes, PLISFPI and Food Parks ease the process of export quality standards and facilitate buyer connections.
In What Manner Can NPCS Assist In The Development Of New Ventures In Food Processing?
NPCS promotes the development of market-ready and export-oriented businesses by providing detailed project reports, customized export-ready market research, and stepwise development plans.
