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Reaffirming its commitment to strengthening India’s food processing ecosystem, the Government of India has outlined a series of policy measures and financial incentives aimed at supporting micro and small food processing enterprises, particularly at the district level.
The Ministry of Food Processing Industries (MoFPI) has clarified that while it does not directly set up food processing units, it actively incentivises the establishment and expansion of food processing industries, including small-scale units, through multiple central government schemes.
No Data on Decline of Local Units Due to MNC Entry
Responding to concerns around the impact of multinational food processing companies on local enterprises, MoFPI stated that no specific data is available regarding any reduction in the number of local small-scale food processing units following the entry of multinational players. The Ministry emphasised that its policy focus remains on enabling coexistence and growth of domestic micro and small enterprises through structured support mechanisms.
Key Government Schemes Powering Food Processing MSMEs
The government is currently implementing three major schemes to boost the food processing sector:
Pradhan Mantri Kisan SAMPADA Yojana (PMKSY)
Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)
PM Formalisation of Micro Food Processing Enterprises (PMFME)
These schemes are demand-driven and pan-India in nature, applicable across all states including Uttar Pradesh, and are designed to promote infrastructure creation, value addition, branding, and market access for food processing enterprises.
₹2,000 Crore Food Processing Fund Supports Affordable Credit
To further promote organised food processing, the Government of India had instituted the Food Processing Fund (FPF) with a corpus of ₹2,000 crore in NABARD during FY 2014–15. The fund provides affordable credit to entrepreneurs setting up food processing units within designated food parks notified by MoFPI, improving access to long-term financing for MSMEs.
Strong District-Level Impact: Ambedkar Nagar Case Study
Highlighting district-level impact, MoFPI has extended significant financial assistance to entrepreneurs in Ambedkar Nagar district of Uttar Pradesh under the PMFME scheme.
As of 31 October 2025,
551 micro food processing enterprises have been approved
₹45.49 crore has been sanctioned as credit-linked subsidy
This support has enabled local entrepreneurs to formalise operations, upgrade technology, and scale production, contributing to employment generation and rural economic development.
MSMEs at the Core of India’s Food Processing Growth
Through a combination of policy incentives, credit facilitation, and district-focused implementation, the government continues to strengthen the role of MSMEs in India’s food processing value chain. These initiatives align with the broader goals of Atmanirbhar Bharat and Viksit Bharat, positioning small food processors as key drivers of agri-value addition and inclusive growth.