Pradhan Mantri Formalisation of Micro Food Processing Enterprises

Pradhan Mantri Formalisation of Micro Food Processing Enterprises is a centrally sponsored scheme run by the Ministry of Food Processing Industries to help small food processing units come into the formal sector. Launched on 29 June 2020 as part of Atmanirbhar Bharat Abhiyan, the scheme gives credit linked subsidy, seed capital and common infrastructure support to micro food businesses across India.

The scheme has been extended and is now set to continue till 30 September 2026. As of 30 June 2026, a total of 74,363 micro food processing enterprises have been formalised under the scheme, with seed capital support sanctioned to over 3.44 lakh rural Self Help Group (SHG) members.

Pradhan Mantri Formalisation of Micro Food Processing Enterprises - Overview

Pradhan Mantri Formalisation of Micro Food Processing Enterprises helps individual micro entrepreneurs, Farmer Producer Organisations (FPOs), producer cooperatives and Self Help Groups upgrade their food processing businesses. The scheme supports existing micro units as well as new units that work under the One District One Product (ODOP) approach.

The scheme works through four main parts: direct support to individual micro enterprises, seed capital and credit help for SHGs and FPOs, common infrastructure such as testing labs and cold storage, and branding and marketing support. It also funds training and research through institutes like NIFTEM and IIFPT.

Pradhan Mantri Formalisation of Micro Food Processing Enterprises has a total outlay of ₹ 10,000 crores for the five year period from 2020-21 to 2025-26. The scheme period has now been extended till 30 September 2026 so that ongoing work can be completed smoothly.

The funding is shared in a 60:40 ratio between the Centre and States, in a 90:10 ratio with North Eastern and Himalayan States, in a 60:40 ratio with Union Territories that have a legislature, and the Centre bears 100% of the cost for other Union Territories.

Benefits

Benefits under Pradhan Mantri Formalisation of Micro Food Processing Enterprises are offered under separate components so that different kinds of food businesses can find suitable support.

Individual Micro Enterprises

Individual micro food processing units receive a credit linked capital subsidy of 35% of the eligible project cost, up to a maximum of ₹ 10,00,000 per unit. The beneficiary contributes at least 10% of the project cost, and the rest is taken as a bank loan.

Support for FPOs and Producer Cooperatives

Eligible FPOs and producer cooperatives receive a 35% grant with credit linkage along with training support. As of 30 June 2026, subsidy worth ₹ 94.37 crore has been approved for 307 FPO-led enterprises under the credit linked subsidy component.

Support for Self Help Groups (SHGs)

SHG members receive seed capital of ₹ 40,000 each for working capital and small tools, with a maximum of ₹ 4 lakh per group. Priority is given to SHGs dealing in One District One Product goods. As of 30 June 2026, seed capital of ₹ 1,166.99 crore has been sanctioned for 3.44 lakh rural SHG members, and subsidy worth ₹ 29.94 crore has been approved for 1,483 SHG-led micro food processing units. SHG members can also apply for the same 35% credit linked grant as independent food processing units.

Common Infrastructure

The scheme funds common facilities such as sorting, grading, warehousing, cold storage, common processing units and incubation centres that smaller units can use on hire. For establishing Common Facility Centres, food processing lines and value chains, the scheme provides 35% financial support up to ₹ 3 crores.

Branding and Marketing Support

Groups of FPOs, SHGs, cooperatives or Special Purpose Vehicles of micro food processing units can get branding and marketing support under the ODOP approach. This includes fully funded marketing training, help with a common brand, packaging and standardisation, and tie ups with retail chains. Up to ₹ 5 lakh is available from the State Nodal Agency for preparing the Detailed Project Report related to marketing and branding.

Eligibility

To apply under Pradhan Mantri Formalisation of Micro Food Processing Enterprises, the following conditions must be met:

• The business should be an existing micro entrepreneur, an FPO, an SHG or a producer cooperative. New units must focus on a One District One Product model.
• The enterprise should be unincorporated and employ fewer than 10 workers.
• The applicant must be at least 18 years old and have passed at least VIII standard.
• Only one person from a family (self, spouse and children) can receive financial help under the scheme.
• The applicant should own the enterprise as a proprietary or partnership firm and must be willing to contribute at least 10% of the total project cost.

For FPOs and cooperatives, a minimum annual turnover of ₹ 1 crore is generally preferred along with around 3 years of experience in the sector.

Exclusions

There are no specific exclusions other than the family limit clause, under which only one person per family can claim the benefit. Units that are incorporated or registered as companies with more than 10 workers do not fall under this scheme.

Application Process

Applications for Pradhan Mantri Formalisation of Micro Food Processing Enterprises are submitted online through the official PMFME portal. The steps are given below.

STEP 1 - Visit the official PMFME portal and click on "Sign Up" to register as a new user. Enter the details as per the Aadhaar card, including the mobile number and email address.

STEP 2 - Use the login details sent to the email and mobile number to log in to the dashboard.

STEP 3 - Select "Apply Online" and fill out the application form, which covers applicant details, enterprise history and financial information. Upload the required documents and submit the application. A confirmation is sent once the application is successfully submitted.

Documents Required

The documents required depend on the type of business applying under the scheme.

• Individual New Enterprises: PAN card, Aadhaar card, address proof such as utility bills or tax receipts, and bank statements for the past 6 months.
• Existing Enterprises: The above documents along with Udyam Registration, trade licences, audited balance sheets for up to 3 years and GST returns.
• FPOs and Cooperatives: Certificate of incorporation, memorandum of association, board resolutions for borrowing, Detailed Project Report and GST details.
• Self Help Groups: Membership list, group saving details and a signed resolution to take the loan.

Important Points to Note

The application process under Pradhan Mantri Formalisation of Micro Food Processing Enterprises is completely free. Do not pay anyone for filling the application or for project handholding. If one bank rejects the application, it can be resubmitted with a different bank through the portal.

References

Official PMFME website of the Ministry of Food Processing Industries

PIB press release on the PMFME scheme

KNN India report on PMFME formalising 74,363 units

FAQ's

What Is Pradhan Mantri Formalisation of Micro Food Processing Enterprises?

It is a centrally sponsored scheme run by the Ministry of Food Processing Industries that helps micro food processing units come into the formal sector with credit linked subsidy, seed capital and technical support. The scheme has an outlay of ₹ 10,000 crores and now runs till 30 September 2026.

What Defines A Micro Enterprise?

A business with an investment in plant and machinery of up to ₹ 1 crore and an annual turnover of up to ₹ 5 crore.

Is There A Limit To The Credit Subsidy?

Yes, an individual can get a 35% subsidy on the project cost, capped at ₹ 10 lakh.

How Much Seed Capital Can An SHG Member Get?

Each eligible SHG member can get ₹ 40,000 as seed capital, with a maximum of ₹ 4 lakh per group for working capital and small tools.

Can I Use Other Government Schemes Alongside This?

Yes, Pradhan Mantri Formalisation of Micro Food Processing Enterprises is designed to work along with other MSME and welfare schemes such as the National Rural Livelihood Mission and PM MUDRA Yojana.

Are There Any Application Fees?

No, the process is completely free. Do not pay anyone to fill the application or for project handholding.