PMFME Scheme 2026: How to Get 35% Capital Subsidy for Food Processing Units
If you are starting or expanding a food manufacturing or packaging business — such as flour mills, spices processing, bakery, oil extraction, fruit pulp, or snacks — the PMFME Scheme offers a massive 35% credit-linked capital subsidy of up to ₹10 Lakh per enterprise.
What is the PMFME Scheme?
The PM Formalisation of Micro food processing Enterprises (PMFME) Scheme is a flagship initiative launched by the Ministry of Food Processing Industries (MoFPI) under the Aatmanirbhar Bharat Abhiyan.
With an outlay of ₹10,000 crore, the scheme aims to enhance the competitiveness of individual micro-enterprises in the unorganized food processing sector, promote formalization, and support Farmer Producer Organizations (FPOs), Self Help Groups (SHGs), and Producer Cooperatives.
---
Key Benefits & Financial Support
1. Credit-Linked Capital Subsidy for Individual Units - **Subsidy Rate:** **35% of the eligible project cost**. - **Maximum Ceiling:** **₹10,00,000 (₹10 Lakh)** per micro-enterprise. - **Beneficiary Contribution:** Minimum **10% of project cost** as own equity. - **Bank Loan:** The balance 55% to 90% is financed via term loans from commercial banks.
2. Seed Capital for SHG Members - **₹40,000 per SHG member** provided as seed capital for working capital requirements and purchase of small tools.
3. Support for Common Infrastructure - FPOs, SHGs, Producer Cooperatives, or State agencies establishing common processing facilities, cold storage, packaging units, or testing labs can receive **35% capital subsidy up to ₹3 Crore**.
4. Branding and Marketing Support - **Up to 50% subsidy** for branding, packaging design, barcode registration, FSSAI compliance, and marketing under state or national brands.
---
One District One Product (ODOP) Focus
The PMFME Scheme adopts the One District One Product (ODOP) approach to reap the benefit of scale in procurement of inputs, common services, and marketing of products.
- ODOP Alignment: Each district across India has an identified perishable food product (e.g., Mango processing in Ratnagiri, Spices in Guntur, Makhana in Darbhanga, Turmeric in Nizamabad).
- Non-ODOP Units: Existing food processing units producing non-ODOP products are also eligible for modernization and expansion subsidies.
---
Eligible Food Processing Activities
A wide range of agro-processing and value-addition activities are covered: - Grain & Pulse Milling: Flour mills, rice processing, besan units, dal mills. - Oil Extraction: Mustard oil, groundnut oil, sesame, and cold-pressed oil expellers. - Fruits & Vegetables: Pickles, jams, sauces, dehydrated fruits, juices, fruit pulp. - Bakery & Confectionery: Bread, biscuits, cakes, cookies, rusks. - Spices & Condiments: Turmeric grinding, chilly powder, spice blends, ginger-garlic paste. - Dairy & Snacks: Paneer, ghee, curd packaging, namkeen, roasted snacks, papad. - Fish & Meat Processing: Packaged frozen meat, dried fish, value-added poultry products.
---
Eligibility Criteria for Individual Micro-Enterprises
- Enterprise Type: Individual proprietorship, partnership, LLP, or private limited enterprise engaged in food processing.
- Investment Limit: Micro-enterprise with plant & machinery investment under ₹2.5 Crore (as per 2026 MSME thresholds).
- Age & Qualification: Applicant must be at least 18 years old. Minimum 8th standard education is preferred for project costs above ₹5 Lakh.
- Ownership: Applicant must possess ownership or registered lease rights to the business premises.
---
How the Subsidy is Credited & Adjusted
Like PMEGP, PMFME operates on a back-ended subsidy mechanism: 1. The sanctioned 35% subsidy amount is released by MoFPI to the lending bank. 2. The bank places the subsidy amount in a Term Deposit Receipt (TDR) in the borrower's name for a period of 3 years. 3. No interest is charged on the loan component equal to the subsidy amount. 4. After 3 years of successful operation and physical verification of the food unit, the subsidy is adjusted against the outstanding term loan principal.
---
How to Apply Online (Step-by-Step)
- Step 1: Visit the official portal pmfme.mofpi.gov.in.
- Step 2: Register as an Applicant with your Aadhaar, PAN, and Mobile Number.
- Step 3: Prepare a Detailed Project Report (DPR) detailing machinery costs, raw material sourcing, and financial projections.
- Step 4: Submit the online application along with quotation of machinery, premises proof, and Udyam Registration.
- Step 5: District Resource Persons (DRP) appointed by the State Nodal Agency assist in vetting your DPR before forwarding to the selected bank branch.
Frequently Asked Questions
Q.What is the maximum subsidy under the PMFME scheme for an individual unit?
Under PMFME, individual food processing units get a 35% credit-linked capital subsidy on eligible project cost, capped at a maximum of ₹10 Lakh.
Q.Is Udyam Registration mandatory for PMFME?
Yes. Having a valid Udyam Registration number is required for micro-enterprises applying for bank loans and capital subsidies under PMFME.
Q.Can new food processing businesses apply or only existing ones?
Both new (greenfield) and existing (brownfield) micro food processing units are eligible for financial support under PMFME, with preference given to ODOP products.
Q.What is the beneficiary contribution under PMFME?
The applicant must contribute a minimum of 10% of the total project cost from their own funds as equity margin.
Want personalised help with this?
Our research desk will guide you through eligibility, documents, and the official application. Free — no fees, no obligation.