Lok Sabha Question No. 1104 (UNSTARRED), answered on 2026-02-05
Subject: FDI Clearances and Facilitation for Food Processing Projects
Ministry: FOOD PROCESSING INDUSTRIES
Asked by: Shri Azad Kirti Jha

## GOVERNMENT OF INDIA

## MINISTRY OF FOOD PROCESSING INDUSTRIES

## LOK SABHA UNSTARRED QUESTION NO. 1104

ANSWERED ON 05 TH  FEBRUARY, 2026

## FDI CLEARANCES AND FACILITATION FOR FOOD PROCESSING PROJECTS

## 1104. SHRI AZAD KIRTI JHA:

Will the Minister of FOOD PROCESSING INDUSTRIES be pleased to state:

- (a) whether the Government has taken action on the recommendations of the 2025 Report of  the  Departmentally  related  Parliamentary  Standing  Committee  on  Agriculture, Animal  Husbandry  and  Food  Processing,  particularly  regarding  expediting  FDI clearances and facilitation for food processing projects in States such as West Bengal and if so, the details thereof;
- (b) the  reasons  for  low  utilisation  of  the  Special  Food  Processing  Fund  managed  by National Bank for Agriculture and Rural Development (NABARD) and the steps taken by the Government to improve fund disbursal and project execution; and
- (c) the  measures  adopted  by  the  Government  to  resolve  delays  in  subsidy  release  and achieve  annual  targets  under  the  PM  Formalisation  of  Micro  Food  Processing Enterprises (PMFME) scheme in West Bengal?

## ANSWER

## THE MINISTER OF STATE FOR FOOD PROCESSING INDUSTRIES (SHRI RAVNEET SINGH)

(a): The Ministry of Food Processing Industries (MoFPI) has submitted the action taken on the recommendations of the 2025 report of the Department related Parliamentary Standing Committee on Agriculture, Animal Husbandry and Food Processing to the Lok Sabha Secretariat of Standing Committee on Agriculture, Animal Husbandry and Food Processing Branch. Further, MoFPI has taken note of the Committee's recommendations of strengthened mechanisms for expeditious FDI processing and investment facilitation in the food processing sector including the state of West Bengal. The Ministry has informed the Committee that all FDI proposals in the food-processing sector are being processed in accordance with the defined Standard Operating Procedure (SOP) issued by the Department for Promotion of Industry and Internal Trade (DPIIT). The SOP clearly prescribes  the  timelines  and  stages  for  examination,  inter-ministerial  consultations,  and  final approval of proposals. The Ministry has been adhering to these timelines to ensure expeditious processing  of  FDI  proposals  and  to  maintain  transparency  and  predictability  in  the  approval process.

(b): A  Special  Fund  with  a  corpus  of  ₹2,000  crore  for  providing  affordable  credit  for establishing Designated Food Parks (DFPs) and setting up of food processing units therein was announced by the Government of India in July, 2014. Some of the major issues in implementation of Special Food Processing Fund (SFPF) are as below:

- i. Although there are about 325 Designated Food Parks (DFPs) notified by the MoFPI, majority of them were established or had availed term loan (wholly or partly) before the  FPF  was  set  up  in  National  Bank  for  Agriculture  and  Rural  Development (NABARD). Further, Mega Food Park (MFP) scheme was discontinued by MoFPI w.e.f 01.04.2021.
- ii. The pace of setting up of individual food processing units in Mega Food Park (MFPs) / Agro Processing Cluster (APCs) is also slow as majority of MFPs took a longer time in being operational.
- iii. As per the RBI instructions regarding the operationalization of Food Processing Fund (FPF),  NABARD is required to  repay  the  FPF  deposits  to  Scheduled  Commercial Banks  in  7  years  inclusive  of  a  moratorium  period  of  2  years.  However,  the  past experience under FPF and also the operational status of MFP / APC has shown that establishment of Agro Processing Clusters (APCS), MFPs, etc. require more gestation / moratorium period i.e. 3 to 5 years. Thus, the shorter gestation period / moratorium period under FPF also acted as an impediment for utilization of corpus under FPF.
- iv. Issues  like  lack  of  last  mile  connectivity,  location  of  Primary  Processing  Clusters (PPC)  at far  off  places  from  Central  Processing  Centre  (CPC)  and  lack  of synchronization of core and enabling infrastructure in MFP/APC for the individual units are also some of the reasons.

The steps being taken by NABARD to improve fund disbursal and project execution are as below:

- i. Investor meets are being conducted by NABARD regularly to raise awareness about the fund among various stakeholders.
- ii. NABARD  has  entered into a Memorandum  of Understanding (MoU) with Commercial Banks to provide working capital funding to the units sanctioned under FPF to facilitate timely availability of working capital.

(c): The  Pradhan  Mantri  Formalisation  of  Micro  Food  Processing  Enterprises  (PMFME) Scheme of MoFPI aims to enhance the competitiveness of existing individual micro-enterprises in the unorganized segment of the food processing industry and promote formalization of the sector. Under the Scheme, Ministry conducts regular review meetings with all the State Governments and lending banks including West Bengal to resolve the issues in scheme implementation. The issues are also raised at the Department of Financial Services (DFS) level and in the State Level Bankers Committee (SLBC) meetings. As of December 2025, total subsidy released under PMFME in the state of West Bengal is Rs.60.76 crore to the 8,334 net enterprises including micro enterprises and SHG members.

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