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    Govt approves investment proposals of 60 processed foods companies under PLI scheme

    Synopsis

    The PLI scheme is part of the Indian government’s announcement of Atmanirbhar Bharat Abhiyan for diverse sectors including processed foods, white goods and pharmaceuticals.

    PLIAgencies
    The allocation is for a five-year period, and includes incentives on a variety of processed foods categories. The PLI scheme for the food processing sector has three broad components. T
    The Centre has approved investment proposals of 60 processed foods companies including Hindustan Unilever, Dabur, ITC, Amul, Nestle, Parle and Britannia under its Production Linked Incentive (PLI) scheme. In all, 91 companies had applied to the Ministry of Food Processing Industries’ invitation for Expression of Interest (EOI) in mid-2021 for availing the scheme, under which the government will offer incentives worth Rs 10,900 crore to the companies on the basis of their investments and sales.

    Approval has been accorded under PLI Scheme for the food processing industry for Category 1, the ministry notified on its website on Monday. Executives said the scheme will help in accelerating domestic growth, aid in creating jobs, expedite significant shift from unbranded to packaged foods, and catalyse exports.

    “The production linked incentive scheme has been crafted to promote domestic manufacturing and would lead to creation of large-scale manufacturing capacity besides promoting job creation in a critical sector like food processing,” said Dabur India chief executive Mohit Malhotra.

    The allocation is for a five-year period, and includes incentives on a variety of processed foods categories. The PLI scheme for the food processing sector has three broad components. The first of these is incentivising manufacturing of ready-to-cook, ready-to-eat, processed fruits and vegetables, marine products and mozzarella cheeses. The scheme also incentivises organic products of small and medium enterprises, and thirdly supports branding and marketing in overseas markets to accelerate emergence of strong Indian brands globally.

    “This is the first time such a scheme which combines incentives on investments and sales has been announced. Not only will this help us fuel growth domestically, it will also help us become more competitive in the exports market,” said RS Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation (GCMMF), owner of India’s largest dairy brand Amul, which sells milk, cheese, butter and ice-cream.

    The PLI scheme is part of the Indian government’s announcement of Atmanirbhar Bharat Abhiyan for diverse sectors including processed foods, white goods and pharmaceuticals.

    The food processing sector has been seeing significant investments over the past three-four quarters as companies anticipate higher demand and consumption revival after severe supply disruptions soon after the outbreak of the Coronavirus pandemic. Nestle has committed fresh investments of Rs 2,600 crore over the next three to four years, while Britannia increased investments from Rs 300 crore to Rs 550 crore in Tamil Nadu.

    Analysts said the incentives are positive for packaged foods companies with gains across the value chain, and benefit manufacturers with economies of scale and consumers who could get more competitive prices.


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