Under the Production Linked Incentive (PLI) plan, the Government of India has sanctioned investment requests from 60 processed food firms, such as Dabur, Hindustan Unilever, ITC, Amul, Parle, Nestle, Britannia, and more.
In total, 91 organizations responded to the Ministry of Food Processing sectors' appeal for Expressions of Interest (EOI) in mid-2021, requesting to participate in the plan, which will see the government provide incentives worth Rs 10,900 crore to enterprises based on their sales and investments.
Recently, the ministry announced on its website that the food processing industry had received permission under the PLI Scheme for Category 1. The strategy, according to executives, will help to accelerate domestic growth, create jobs, boost the transition from unbranded to processed foods, and catalyze exports.
The funding will be distributed over five years and will include incentives for a range of packaged food categories.
The PLI plan for the food processing sector is divided into three parts. The first among these is to encourage the production of ready-to-cook, ready-to-eat packaged vegetables and fruits, as well as seafood and mozzarella cheeses.
The initiative also encourages small and medium-sized businesses to produce organic products, and it promotes marketing and promotional in international markets to help Indian brands gain traction
The PLI scheme is part of the Indian government's Atmanirbhar Bharat Abhiyan, which covers a wide range of industries such as processed foods, white goods, and medicines.
Companies predict stronger demand and consumption resurgence after major supply shortages shortly after the emergence of the Covid-19 pandemic, which has seen major investments in the food manufacturing industry for the past three quarters.
Nestle has promised Rs 2,600 crore in capital spending over the coming three to four years, while Britannia has upped its commitment in Tamil Nadu from Rs 300 crore to Rs 550 crore.
As per analysts, the incentives are good for processed food firms because they help them throughout the value chain. They also benefit producers because of economies of scale, as well as customers because they could obtain better prices.
