Food Processing Industry (FPI) Subsidy Rate in Tamil Nadu

Updated on June 19, 2025 02:53:20 PM

The FPI Subsidy in Tamil Nadu is instituted by the Ministry of Food Processing Industries (MoFPI) of Government of India to expand business in the Food Processing Industry of the state. Any new business that is started in the food processing industry is eligible for FPI subsidy in Tamil Nadu and receives reimbursement based on investments made over equipment, establishment, transport and more.

The FPI subsidy in Tamil Nadu aims to expand business, provide job opportunities to locals and more for the economic growth of the state. In the following article, you will learn about the FPI subsidy in Tamil Nadu as well as its benefits that will support the businesses in the state.

The FPI Subsidy in Tamil Nadu is an initiative implemented by the Ministry of Food Processing Industry (MoFPI) to boost the economic growth of the state and attract investments. The FPI Subsidy in Tamil Nadu has several benefits such as generating jobs, reducing business expenses, expanding business operations beyond local regions, and encouraging entrepreneurship for further development of the Food Processing Industry in the state. The FPI subsidy in Tamil Nadu provides several benefits to the businesses engaged in the Food Processing Industry of the state that are mentioned below.

1. Encouraging Entrepreneurship: The FPI subsidy in Tamil Nadu makes it easier to start up new businesses and helps to create a more lively and varied local economy.
2. Job Creation: The FPI subsidy in Tamil Nadu provides job opportunities to locals and increases employment, raising the living standards of locals.
3. Market Expansion: Local businesses can utilize the FPI subsidy in Tamil Nadu to expand the markets beyond their region and compete in bigger regions.
4. Economic Development: The FPI subsidy in Tamil Nadu has a positive impact on the local economy as it supports businesses to improve the import and export of goods.
5. Cost Reduction: The FPI subsidy in Tamil Nadu lowers transport costs for businesses and makes it sustainable and cost-efficient for both businesses and consumers.

Under the Food Processing Industry (FPI) subsidy in Tamil Nadu, the maximum subsidy amount is granted to ensure that the scheme aids in prevention of exploitation or unfairness of the intermediary. The subsidy rate in Tamil Nadu is categorized under 8 programs which are:

• Power/Electricity Subsidy

  Power/Electricity Subsidy

  Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  20% on power consumption charges	Not Specified	For 36 months from Date of Commencement of Production or date of power connection, whichever is later

• Capital Subsidy

  Capital Subsidy

  Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  Capital Cost Subsidy	25% of Capital cost	Subsidy of Rs 30 lakhs. Only one, whichever is lower. Industries adopting Zero Effluent or Wastewater Discharge, Clean Development Mechanism, and Emissions Trading Mechanism will be given a higher amount of subsidy.
  Generator Subsidy	25% of the cost of generator up to 125 KVA capacity	Subject to a maximum of Rs 1.50 lakhs. Eligible to micro, small, and medium manufacturing enterprises set up anywhere in the State.
  Capital Subsidy on Plant and Machinery	5% capital subsidy on the value of eligible plant and machinery	Subject to a maximum of Rs 3 lakhs. Not Specified.

• Integrated Cold Chain and Value Addition Infrastructure (Ongoing)

  Integrated Cold Chain and Value Addition Infrastructure (Ongoing)

  Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  35% of the total cost of plant and machinery and technical civil works in General areas and 50% for NE region and difficult areas	Subject to a maximum of Rs.10 Crore per project	For Storage infrastructure including pack houses, precooling units, ripening chamber and transport infrastructure
  50% of the total cost of plant and machinery and technical civil works in General areas and 75% for NE region and difficult areas		For Value addition and processing infrastructure including frozen storage/deep freezers associated and integral to the processing

• Creation/ Expansion of Food Processing and Preservation Capacities

  Creation/ Expansion of Food Processing and Preservation Capacities

  Maximum Subsidy Rate	Maximum Subsidy Amount
  35% of the cost of plant and machinery and technical civil works in General areas and 50% for NE region and difficult areas	Subject to a maximum of Rs 5 crore per project

• Infrastructure for Agro Processing Clusters

  Infrastructure for Agro Processing Clusters

  Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  35% of eligible project cost in general areas and 50% in NE region	Subject to a maximum of Rs 10 crore per project	Basic Enabling Infrastructure: Development of industrial plots, boundary wall, roads, drainage, water supply, electricity supply including power backup, effluent treatment plant, parking bay, weigh bridges, common office space, and more.

• Creation of Backward and Forward Linkages

  Creation of Backward and Forward Linkages

  Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  35% of eligible project cost in general areas and 50% in NE region	Subject maximum of Rs 5 crore per project	Minimum processing facilities at farm level
  		Distribution hub and retail outlets
  		Mobile pre-cooling trucks and reefer trucks

• Promotional Activities, Advertisements, Publicity, Studies & Surveys

  Promotional Activities, Advertisements, Publicity, Studies & Surveys

  Maximum Subsidy Rate	Maximum Subsidy Amount
  50% of the cost of the event	Maximum Rs 5 lakh

• Skill Development for Infrastructure for Skill Training Centers

  Skill Development for Infrastructure for Skill Training Centers

  Maximum Subsidy Rate	Maximum Subsidy Amount	Limitations
  50% of the cost of plant and machinery	Subject to maximum of Rs 15 lakh per training module	Limited to two training modules per training center

The aim of the FPI subsidy in Tamil Nadu is to improve the economy and the financial standing of local businessmen. The following are the features of FPI subsidy in Tamil Nadu:

• Simple Disbursement of Loan: When no revenue is being generated at the start of the project implementation, during the 'moratorium' period, interest charged on the portion of the loan that has been paid out is calculated using simple interest. Compound interest is applied once the moratorium period is over, although the interest diminishes over time.
• Frequent Disbursement of Loans: The loan and FPI subsidy in Tamil Nadu will be disbursed in phases over 3-5 years with intervals of 3-6 months to match the implementation period.
• Improve in Prospect Buyer: Various types of benefits are offered to potential buyers such as individuals, food processing industries (FPI), exporters, etc., to be effective facilitators.