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Govt. Policies Delivering Impetus on FDI in Food Processing Sector

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The Ministry of Food Processing Industriesis implementing a number of Central Sector Schemes for promotion and development of food processing sector in the country since 12th Plan. 

The major achievements of the Ministry during 2016 are as under:-

Government has allowed 100% FDI for trading including through e-commerce, in respect of food products manufactured or produced in India. 100% FDI is already permitted in manufacturing of food products through automatic route.  This will provide impetus to the foreign investment in food processing sector, benefit farmers immensely and will create vast employment opportunities.

The following additional fiscal concessions have been granted for boosting the investment in the food processing sector :

(a)                Reduction in Excise Duty on Refrigerated Containers from 12.5% to 6%.

(b)               Reduction in Basic Custom Duty on Refrigerated Containers from 10% to 5%.

(c)                5% Basic Customs Duty as presently available under project imports for cold storage, cold room also extended for Cold Chain including pre-cooling unit, pack house, sorting and grading lines and ripening chambers.

Under the Scheme of Mega Food Parks:

(a)                The Indus Mega Food Park, Khargone (Madhya Pradesh); Jharkhand         Mega Food Park Ranchi (Jharkhand), and Jangipur Bengal Mega Food Park, Murshidabad(West Bengal) were made operational and inaugurated.


(b)               Foundation Stone of Punjab Agro Industries Corporation (PAIC) Mega Food Park Project in Ludhiana was laid.

(c)                As such, 8 Mega Food Parks have been made operational so far.


(d)               A Mega Food Park is likely to benefit about 25000-30000 farmers apart from creating employment for 5000-6000 persons, especially in rural         areas.


(e)                The Mega Food Park projects at Satara (Maharashtra), Ajmer (Rajasthan), Rayagada (Odisha) and Agartala (Tripura) are at advanced stage for operationalisation by the end of current financial year.


(f)                NABARD has sanctioned term loan of Rs. 427.69 Crore to 10 Mega Food Park projects and 2 processing units under ‘Food Processing Fund’ of Rs. 2000 Crore and out of this an amount of Rs. 81.10 Crore has been disbursed.The Ministry has notified 157 designated food parks in different States for the purpose of availing affordable credit from special fund with NABARD.


Under the Scheme of Integrated Cold Chain and Value Addition Infrastructure:

(a)                20 projects have been operationalised in 2016.  With their operationalisation, Ministry has created an additional capacity of 0.63 lakh metric tonnes of cold storage, 15 metric tonnes per hour of individual Quick Freezing (IQF), 10.65 lakh litres per day of Milk of processing/ storage and 99 reefer vans during 2016.


(b)               During last two and half years, 54 Integrated Cold Chain projects have been made operational taking the total number of Cold Chain projects to 91. The Ministry has so far assisted 135 Cold Chain projects having a capacity of 3.67 lakh metric tones of cold storage, 94.29 metric tones per hour of individual Quick Freezing (IQF) 37.93 lakh litres per day of Milk processing/ storage and 549 reefer vans.


(c)                The guidelines of Scheme have been revised on the basis of feedback and experience of this Ministry to make them investor friendly.

(d)               On an average, each cold chain project benefits to around 500 farmers        in fruits and vegetables sector and around 5000 farmers in dairy sector and creates employment for 100 persons.


Ministry has invited EOIs to fill up vacant slots of Mega Food parks and Cold Chain projects.  The Ministry has received 54 proposals against 8 vacant slots of Mega Food Parks and 308 proposals for 100 Cold Chain projects which stand testimony to the increasing interest of the investors in this sector.

Under the Scheme of Setting up/ Modernization of Abattoirs, one project at Panji(Goa) has been operationalised.

During the year, 10 Food Testing Labs have been completed.

FSSAI has simplified product approval:

(a)          approved a large number of new Additives harmonized with the International Codex Standards.


(b)          notified an amendment to the regulations as a result of which non-standardized food products called proprietary foods (except novel food and nutra-ceuticals) that use ingredients and additives approved in the regulations will no longer require product approval. This has provided considerable relief to the industry.


A web-based on-line system has been operationalised for processing claims for release of grants-in-aid under the Schemes of Mega Food Parks and the Integrated Cold Chain and Value Addition Infrastructure.

The National Institute of Food Technology, Entrepreneurship and Management (NIFTEM) at Kundli, Sonepat, Haryana and Indian Institute of Crop Processing Technology (IICPT) at Thanjavur, Tamil Nadu are being developed by the Government as the Centres of Excellence. The pass-outs of these institutes have got 100% placements.

The Ministry is also taking steps to implement a new scheme namely Scheme for Agro-Marine produce Processing and Development of Agro-clusters (SAMPADA) for overall development of food processing sector, for providing enabling infrastructure, expanding processing and preservation capacities, controlled temperature logistics and backward and forward linkages, with an allocation of Rs.6000 Crore for a period co-terminus with 14th Finance Commission.

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