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Q: The food processing industry has great potential for value addition, leading to high growth and profits. In this context, discuss ‘Production Linked             Incentive Scheme for Food Processing Industry (PLISFPI).                                                                                                                (10 Marks, 250 Words)

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Food processing industry (FPI) refers to the sector involved in transforming raw agricultural products into processed food items through various techniques such as cooking, preserving, packaging, etc. The food processing industry (FPI) has the potential to enhance the value of farm output, generate employment, boost exports, and strengthen the domestic supply chain.


India’s FPI currently accounts for 32% of the country’s total food market; contributes more than 8% of Gross Value Added (GVA) in both manufacturing and agriculture; and 13% of India’s exports. But the country still processes less than 10% of its agricultural output. According to NITI Aayog, India loses more than 30% of the produce from farm gate due to inadequate cold chain and processing infrastructure.


Opportunities in the Food Processing Sector in India:

  • Strong domestic demand: Increased disposable income, changing lifestyle, varying nutritional needs and food habits.
  • Supply side advantages: High level of agricultural production – large livestock base, wide variety of crops, inland water bodies and a long coastline for fishing – gives a variety of inputs.
  • Export opportunities: Proximity to key export destinations, greater integration with the global economy.
  • Employment Generation: It provides direct and indirect employment opportunities because it acts as a bridge between Agriculture and Manufacturing.
  • Reduce malnutrition: Processed foods when fortified with vitamins and minerals can reduce the nutritional gap in the population.


At present, as majority of food processing takes place in unorganized sector, Indian brands are seen as unhygienic and there is predominance of primary processing. Therefore, a much-needed thrust is required to boost the food processing sector.


To utilize the opportunities, present both at domestic and international markets, the Government came up with a ‘Production Linked Incentive Scheme for Food Processing Industry (PLISFPI).’


Benefits of the PLISFPI Scheme for the Food Processing Industries:


  • Supports food manufacturing entities with expansion of processing capacities and their emergence as strong Indian brands.
  • Looking for creation of global food manufacturing champions.
  • Promotes visibility and acceptance of selected brands in international markets.
  • Will increase employment opportunities of off-farm jobs.
  • Ensure remunerative prices of farm produce and higher income for farmers.



Addressing bureaucratic hurdles, improving laws, upgrading hygiene practices, and increasing awareness about the benefits of processed food items are necessary for the food processing industry’s growth. The government also came up with Pradhan Mantri Kisan Sampada Yojana to create and upgrade food processing infrastructure.