Why This Matters to You as an NRI
India wants to become a global food processing hub, and the government has put serious money behind that ambition. Three interconnected programs now offer NRIs a compelling entry point into food processing and cold chain infrastructure: the PLI Scheme for Food Processing Industry (PLISFPI), the Integrated Cold Chain and Value Addition Infrastructure (ICCVAI) scheme under PMKSY, and Operation Greens. Together, these programs create a layered incentive structure that rewards manufacturing, reduces post harvest losses, and builds farm to fork supply chains.
Whether you want to set up a mozzarella cheese plant, invest in IoT enabled cold storage, or back a ready to eat foods company, this guide walks you through the rules, the numbers, and the practical steps.
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The PLI Scheme for Food Processing Industry
What It Does
The PLISFPI, administered by the Ministry of Food Processing Industries (MoFPI), provides financial incentives based on incremental sales over a base year. The goal is straightforward: encourage companies to manufacture food products in India, scale up processing capacity, create jobs, and grow exports.
Key Numbers (as of December 2025)
| Parameter | Detail | |---|---| | Total scheme outlay | Rs 10,900 crore | | Incentive rate | 4 to 6 percent on incremental sales | | Incentive period | FY 2021-22 to FY 2026-27 | | Applications approved | 168 | | Cumulative investment by approved applicants | Rs 9,207 crore | | Incentives disbursed to date | Rs 2,714.79 crore | | Additional processing capacity created | 35 lakh metric tonnes per annum | | Jobs generated (direct and indirect) | 3.39 lakh | | Export CAGR of approved products (FY 2019-20 to FY 2024-25) | 13.23 percent | | MSMEs approved | 69 | | Cooperatives approved | 2 | | Innovative food products approved | 2 | | Organic sector applicants approved | 13 |
Eligible Product Categories
The scheme covers ready to eat and ready to cook foods, marine products, processed fruits and vegetables, mozzarella cheese, organic foods, and other segments specified by MoFPI. Recent initiatives include a millets processing focus launched in 2023 to support nutritious food production.
Core Eligibility Rules
1. You must register an Indian company or LLP to participate. NRIs cannot claim incentives directly; the Indian entity receives all benefits. 2. The entire manufacturing chain, from primary processing to final product, must happen in India. You cannot import semi finished goods and simply package them here. 3. Companies must meet minimum cumulative investment thresholds in plant, machinery, and equipment. Exact thresholds vary by category and company size. 4. Audited financial statements, PAN, GST registration, and a detailed business plan with sales targets are mandatory for application. 5. Incentives get disbursed annually based on incremental sales over the base year. Missing sales thresholds in any year can lead to incentive forfeiture for that year. 6. Audits of sales and investment figures are mandatory. You must maintain audit ready records for MoFPI verification. 7. Applications are submitted online via the MoFPI portal at mofpi.gov.in. Claims are processed post sales verification.
How NRIs Can Participate
You can invest 100 percent through the automatic FDI route in food processing. No prior government approval is needed, except for specific restricted sectors like tea plantation. You participate through an Indian entity, meaning a company or LLP incorporated in India. The entity registers on the PLISFPI portal at mofpi.gov.in, tracks incremental sales, and files claims.
Profits and dividends flow back to you under FEMA regulations without special restrictions. The scheme does not impose any NRI specific curbs. Ensure your Indian entity maintains proper documentation of FDI inflows through authorized dealer banks and files Form FC GPR with the RBI within 30 days of share allotment.
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Cold Chain Infrastructure Under PMKSY
The ICCVAI Scheme
Launched originally in 2008 and restructured in 2017, the Integrated Cold Chain and Value Addition Infrastructure scheme provides capital grants for building end to end cold chain projects. Think packhouses at the farm gate, primary processing centers, cold storage facilities, reefer transport vehicles, distribution hubs, and even irradiation units.
Grant Structure
| Scenario | Grant as Percentage of Project Cost | |---|---| | General category | Up to 35 percent | | Northeast and hill areas, SC/ST entrepreneurs | Up to 50 percent | | Maximum grant per cold chain or APC project | Rs 10 crore | | Maximum grant for Operation Greens integrated projects | Rs 15 crore |
Progress as of January 2026
| Metric | Number | |---|---| | Cold chain projects sanctioned | 401 | | Cold chain projects operational | 302 | | Mega Food Parks sanctioned | 41 | | Mega Food Parks operational | 25 | | Preservation capacity created | 25.52 lakh metric tonnes | | Processing capacity created | 114.66 lakh metric tonnes | | Cold storages created under PMKSY | 690 units with 51.85 lakh MT capacity | | Reefer vehicles created | 1,768 | | Jobs generated | 1,74,600 | | Multi product irradiation units approved | 16 (9 operational) | | Aid released for irradiation | Rs 112.99 crore |
July 2025 Budget Expansion
In July 2025, the PMKSY outlay increased by Rs 1,920 crore to a total of Rs 6,520 crore, valid through March 2026. This expansion includes Rs 1,000 crore earmarked specifically for 50 new irradiation units with a combined capacity of 20 to 30 lakh metric tonnes. This signals the government's serious commitment to reducing India's 20 to 40 percent post harvest losses on perishables.
Mandatory Project Design Rule
Every cold chain project must link farm level infrastructure (FLI) to a distribution hub (DH). You cannot build a standalone cold storage warehouse in a city and claim the grant. The government wants integrated chains that start at the farm gate. This adds complexity and cost compared to standalone warehouse projects, but the grant structure helps offset these expenses.
Who Can Apply
Entrepreneurs, cooperatives, Farmer Producer Organizations (FPOs), MSMEs, public sector undertakings, and self help groups all qualify. NRIs invest through Indian entities and apply via the PMKSY portal. The same FDI rules apply: 100 percent automatic route for food processing and cold chain infrastructure.
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PMKSY Achievements: The Broader Picture
A Lok Sabha annexure from 2025 provides the consolidated numbers across all PMKSY components. The program supports agro processing clusters, standalone cold chain projects, integrated projects, and Operation Greens initiatives. It covers primary processing, value addition, and farm to fork linkages for perishables.
The cold chain infrastructure created under PMKSY directly reduces logistics costs. Currently, only 12 to 13 percent of India's agricultural produce gets processed, leaving significant room for NRI backed ventures to capture value in high potential export segments like fresh produce to the Middle East.
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The Investment Angle: What NRI Investors Should Watch
Listed Companies and Market Impact
These government programs directly benefit several categories of Indian listed companies that NRIs already track:
Food processing companies that qualify for PLI incentives see a 4 to 6 percent boost to their bottom line on incremental sales. If you hold shares in listed food processors, check whether they have registered under PLISFPI. The 13.23 percent export CAGR signals strong tailwinds for companies with international distribution. As of December 2025, food processing has generated 42 percent of all PLI employment despite accounting for only 8 to 9 percent of total PLI subsidies, indicating strong job creation efficiency.
Cold chain and logistics companies benefit from the grant structure. Companies building reefer fleets, cold storage networks, or integrated supply chains can offset 35 to 50 percent of capital costs through government grants, improving return on equity. With 302 cold chain projects now operational and 25 Mega Food Parks in operation, the infrastructure buildout is moving from announcement to execution.
Agri tech firms offering IoT monitoring, temperature tracking, and supply chain software find a growing customer base as 401 cold chain projects come online and 50 new irradiation units get commissioned.
FMCG and dairy companies expanding into ready to eat foods, processed fruits and vegetables, marine products, and mozzarella cheese can layer PLI incentives on top of organic growth.
Broader PLI Performance Context
Across all 14 PLI sectors, the scheme has attracted Rs 2.16 lakh crore in investments and generated Rs 20.41 lakh crore in incremental production and sales as of December 2025, creating 14.39 lakh jobs. Food processing's strong performance within this ecosystem underscores the sector's strategic importance.
Private Placement and Direct Investment Opportunities
Beyond listed equities, NRIs can explore:
1. Direct FDI into food processing units through the automatic route (100 percent foreign ownership allowed). Prepare a detailed business plan with production targets, secure land and environmental clearances, and register with GST and FSSAI before applying. 2. Joint ventures with Indian promoters who hold PLISFPI approvals, sharing the incentive benefits. This approach reduces execution risk and leverages local expertise. 3. NABARD linked financing for rural cold chain projects, where the grant covers a significant chunk of capital expenditure and NABARD provides debt at favorable terms. 4. InvITs and REITs that hold warehousing and cold storage assets, though NRIs should verify whether specific trusts include food grade cold chain assets.
Risk Factors to Keep in Mind
1. Sales threshold risk: PLI incentives require hitting minimum incremental sales each year. A shortfall means forfeiture of that year's incentive. Market downturns or supply disruptions can cause misses. 2. Operationalization delays: Of 401 approved cold chain projects, only 302 were operational as of January 2026. Delays in land acquisition, construction, or clearances can push timelines. Budget for 18 to 24 month execution cycles. 3. Mandatory FLI to DH linkage: Cold chain grants require farm level infrastructure connected to distribution hubs. This adds complexity and cost compared to standalone warehouse projects. 4. Audit and compliance burden: Both PLI and PMKSY grants require detailed documentation, audits, and portal based tracking. Factor in compliance costs and hire experienced auditors familiar with government scheme requirements. 5. Scheme sunset: PLI incentives run through FY 2026-27. PMKSY expanded funding runs through March 2026. Check MoFPI for extensions or successor schemes before committing capital. 6. Processing capacity utilization: While 35 lakh MT of new capacity has been created, actual utilization depends on market demand and export competitiveness. Conduct thorough market research before investing.
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Practical Steps for NRIs
If You Want PLI Incentives
1. Incorporate an Indian company or LLP. Ensure you have proper FDI documentation and file Form FC GPR with the RBI within 30 days. 2. Prepare a detailed business plan with production targets, sales projections, and investment breakdown. 3. Register on the PLISFPI portal at mofpi.gov.in with your company's incorporation certificate, PAN, GST registration, and audited financials. 4. Ensure the entire manufacturing chain operates in India, including primary processing. 5. Meet the minimum cumulative investment threshold in plant, machinery, and equipment (thresholds vary by category; check the latest MoFPI notification). 6. Obtain FSSAI compliance for all food products before commencing production. 7. Track incremental sales meticulously against the base year and file annual claims with supporting audited statements. 8. Maintain audit ready records for MoFPI verification and be prepared for government inspections.
If You Want Cold Chain Grants
1. Prepare a Detailed Project Report (DPR) covering farm level infrastructure through distribution hub. Ensure the DPR meets PMKSY technical specifications. 2. Secure land documents and environmental clearances (including forest clearance if applicable). 3. Obtain FSSAI registration for any processing or storage components. 4. Apply through the PMKSY portal with all required documentation. 5. Budget for the 50 to 65 percent of project cost that the grant does not cover. Arrange financing through NABARD or commercial banks. 6. Plan for 18 to 24 month execution timelines and factor in contingencies.
FEMA and Repatriation
Profits, dividends, and capital gains from your Indian food processing or cold chain entity can be repatriated under FEMA regulations. No special NRI restrictions apply to these sectors. Ensure your Indian entity maintains proper documentation of FDI inflows through authorized dealer banks. File Form FC GPR with the RBI within 30 days of receiving FDI. Repatriation of profits requires payment of applicable Indian income taxes. Consult a FEMA specialist to structure your investment for clean repatriation and to understand your country of residence's tax treaty benefits with India.
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How These Programs Connect
Think of these three programs as layers of the same strategy:
| Layer | Program | What It Does | |---|---|---| | Manufacturing incentive | PLISFPI (PLI) | Pays you 4 to 6 percent on incremental sales for making food products in India | | Infrastructure grant | ICCVAI under PMKSY | Covers 35 to 50 percent of capital cost for cold chain from farm to retail | | Market linkage | Operation Greens | Provides up to Rs 15 crore for integrated projects connecting farmers to markets |
An NRI investor can potentially access all three: build a cold chain with PMKSY grants, set up a food processing unit that qualifies for PLI incentives, and link farmers to markets through Operation Greens. The combined effect significantly improves project economics. For example, a cold chain project with a Rs 20 crore capital cost could receive Rs 7 crore in grants (35 percent), reducing the equity requirement. A food processing unit using that cold chain could then claim PLI incentives on incremental sales, further improving returns.
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Key Dates and Timelines
| Item | Date or Period | |---|---| | PLI incentive period | FY 2021-22 to FY 2026-27 | | PMKSY expanded funding | July 2025 to March 2026 | | PMKSY overall tenure | 2017 onward, extended to 2026 | | PLI approvals reported | As of December 2025 | | Cold chain progress reported | As of January 2026 | | PMKSY budget increase | July 2025 | | Typical cold chain project execution | 18 to 24 months |
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Bottom Line
India's food processing and cold chain sector offers NRIs a rare combination: 100 percent automatic FDI access, direct government grants covering up to half the capital cost, and production linked incentives that reward sales growth for five years. The total government commitment across PLISFPI and PMKSY exceeds Rs 17,000 crore. With 35 lakh MT of new processing capacity, 51.85 lakh MT of cold storage, and exports growing at over 13 percent annually, the sector has moved well past the announcement stage into measurable execution.
As of December 2025, Rs 9,207 crore in cumulative investments have been committed by 168 approved PLI applicants, and Rs 2,714.79 crore in incentives have been disbursed. This demonstrates that the scheme is delivering real capital deployment and cash returns, not just policy promises. The 302 operational cold chain projects out of 401 sanctioned show that infrastructure is coming online at scale.
Start by exploring the MoFPI portal, connecting with Indian partners who hold existing approvals, and consulting a FEMA specialist to structure your investment for clean repatriation. The window for PLI incentives runs through FY 2026-27, so timing matters. Given the strong execution track record and the breadth of opportunities across food processing, cold chain, and agri tech, this represents a compelling entry point for NRI capital seeking both government backed incentives and long term sectoral growth.