Food Processing is an economic concept and an industry often recognized as a 'sunrise sector' in India, which involves transforming raw agricultural, dairy, animal husbandry, or fish products into food suitable for consumption, storage, or cooking, thereby adding commercial value. This process is broadly categorized into Primary (like rice milling), Secondary (converting wheat into flour), and Tertiary (creating ready-to-eat/heat foods).
While traditional techniques like pickling and sun-drying are centuries old, the modern industry gained momentum after the establishment of the Ministry of Food Processing Industry (MoFPI) in 1988. The sector was accelerated by economic liberalization in the 1990s, which allowed 100% Foreign Direct Investment (FDI) under the automatic route. The core problem it addresses is reducing post-harvest losses, which were estimated by NITI Aayog to be close to ₹90,000 crore annually, and ensuring remunerative prices for farmers.
The mechanism is primarily driven by the MoFPI through the umbrella scheme, Pradhan Mantri Kisan Sampada Yojana (PMKSY), which aims to create modern infrastructure and efficient supply chains. PMKSY includes sub-schemes like Mega Food Parks and Integrated Cold Chain, Value Addition and Preservation Infrastructure. The entire sector is regulated by the Food Safety and Standards Authority of India (FSSAI), established under the Food Safety and Standards Act, 2006.
Recently, the government introduced the Production Linked Incentive (PLI) Scheme for Food Processing Industry (PLISFPI) for 2021-22 to 2026-27 with an outlay of ₹10,900 crore to promote global food manufacturing champions. Additionally, the Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme, launched on June 29, 2020, provides a credit-linked subsidy of 35% (up to ₹10 lakh) to formalize micro-enterprises.