PM Formalisation of Micro Food Processing Enterprises
Funded, but no order confirms it is still open: Union Expenditure Budget 2026-27 (Feb 2026, Demand No. 45 (Ministry of Food Processing Industries), item 9 Prime Minister Formalisation of Micro Food Processing Enterprises Scheme (PM FME), BE 2026-27 ₹1700.00 crore; Notes item 9)
A bank-loan-linked subsidy for small food processing units, SHGs, FPOs and cooperatives, mainly for the district’s One District One Product.
- Lead benefit
- 35%of the cost, at most
- Components
- 7each read from the document
- Who can apply
- 9kinds of applicant
- Closing date
- Seasonalsee “When to apply”
What it pays
35% of the eligible project cost, up to ₹10 lakh per unit, with a bank loan.
What the document says, word for word
You put in at least 10% yourself; the rest is a bank loan. Land cost is not counted (rented work-shed rent for up to 3 years can be). The unit must be unincorporated, employ fewer than 10 workers, and only one person per family can claim (para 4.2). New units are supported only for the district’s ODOP product (para 2.5).
“Individual micro food processing units would be provided credit-linked capital subsidy @35% of the eligible project cost with a maximum ceiling of Rs.10.0 lakh per unit. Beneficiary contribution should be minimum of 10% of the project cost with balance being loan from Bank.”Seed capital of ₹40,000 per SHG member for working capital and small tools, as a loan from your SHG federation.
What the document says, word for word
Only SHG members already doing food processing are eligible (para 5.3.6). To the member this is a loan, not a grant, so we show no rupee gain.
“Seed capital @ Rs40,000/- per member of SHG for working capital and purchase of small tools would be provided under the scheme;”35% credit-linked grant for FPOs, producer cooperatives and SHG federations.
What the document says, word for word
An FPO or cooperative needs a turnover of at least ₹1 crore, a project no larger than that turnover, and 10% of the cost from its own funds (para 5.2.2). A grant above ₹10 lakh needs MoFPI approval (para 6.3.1(iii)).
“Grant @35% with credit linkage;”35% credit-linked grant for common infrastructure — farm-gate sorting, grading, assaying, warehouse or cold store, a common processing facility for the ODOP product, or an incubation centre.
What the document says, word for word
The facility must also be open to other units and the public on hire for a substantial part of its capacity (para 6.1). Send a DPR to the State Nodal Agency; a grant above ₹10 lakh needs MoFPI approval, and the grant is paid after the bank sanctions the loan (para 6.3.1).
“Support for common infrastructure would be provided to FPOs, SHGs, cooperatives, any Government agency or private enterprises. … Credit linked grant would be available @ 35%. Maximum limit of grant in such cases would be as prescribed.”Up to ₹50,000 for an FPO, SHG or cooperative to get its project report (DPR) prepared for common infrastructure or capital investment.
What the document says, word for word
The guideline prints ₹50,000 per case; we never show more than what the DPR actually costs you.
“Assistance of Rs. 50,000/- per case would be provided to FPOs/SHGs/ Cooperatives for preparation of DPR;”50% of the cost of a common brand, packaging, marketing tie-ups and quality control for an ODOP product, for groups of FPOs, SHGs or cooperatives.
What the document says, word for word
The product must be the district’s ODOP, with a turnover of at least ₹5 crore, sold to consumers in retail packs (para 7.5.1). The proposal is prepared through the State Nodal Agency, which decides whether the brand is district, regional or state level (para 7.3); marketing training is fully funded (para 7.2(i)). No support for opening retail outlets.
“Support for branding and marketing would be limited to 50% of the total expenditure. Maximum limit of grant in such cases would be as prescribed. No support would be provided for opening retail outlets under the scheme.”Free training — entrepreneurship, FSSAI, GST and hygiene, and product-specific training on your machines — plus a district resource person to help with the DPR, bank loan and approvals.
What the document says, word for word
General modules are online; product training is held in the district, often at RSETI, in short weekly modules (para 8.3.4).
“Training support would be provided to individual units and groups that are being provided support for capital investment. In addition, training support would also be provided to other existing units and groups in the districts that are processing ODOP products. … Component of training and capacity building would be fully funded under the Scheme;”How much can I claim?
Enter project cost to see the figure.
You put in at least 10% yourself; the rest is a bank loan. Land cost is not counted (rented work-shed rent for up to 3 years can be). The unit must be unincorporated, employ fewer than 10 workers, and only one person per family can claim (para 4.2). New units are supported only for the district’s ODOP product (para 2.5).
Who can apply
- Other farmer
- Small or marginal farmer
- SC farmer
- ST farmer
- Woman farmer
- Agri entrepreneur
- Self-help group
- FPO
- Cooperative
Papers you need
- Basic KYC of the applicant (para 13.7)
- Lease or ownership documents of the land for the unit or machinery (para 13.7)
- Registrations and Government clearances (para 13.7)
- For an existing unit using power: electricity bill (para 4.2(ii))
- Proof of at least Class VIII pass (para 4.2(vii))
How to apply
- Apply at the district level — applications are taken on an ongoing basis — or through the district Resource Person (para 4.3.2).
- The Resource Person checks your unit; the District Level Committee interviews you (para 4.3.3).
- If recommended, the Resource Person helps you prepare a project report (DPR), which goes to the bank for a loan (para 4.3.5).
- After the bank sanctions the loan, the subsidy is placed in a mirror account in your name and adjusted against the loan after three years if the account stays regular (para 13.3, 13.4).
Applying is free. Never pay anyone to apply for you.
When to apply
Applications are invited at district level on an ongoing basis (para 4.3.2).
Combining with other schemes
The documents do not say whether this can be combined with other schemes. Ask the implementing office before you count on both.