PMFME Scheme: 35% Subsidy up to ₹10 Lakh for Micro Food Processing Units
The PM Formalisation of Micro Food Processing Enterprises scheme pays 35% of project cost up to ₹10 lakh. Who qualifies, how to apply, and where the scheme stands after 30 September 2026.
In this article
The Pradhan Mantri Formalisation of Micro Food Processing Enterprises (PMFME) scheme supports small food businesses — flour and spice mills, pickle and papad makers, bakeries, dairy, meat and fish processors — to upgrade and formalise. For many units it is the difference between a home operation and a registered enterprise with a bank line.
Where the scheme stands (checked 28 September 2026): PMFME was approved to 2025-26 and then extended only to 30 September 2026. A five-year continuation for 2026-31 was proposed by the Ministry in August 2026, with talk of a higher subsidy ceiling, but nothing had been approved when we checked. Confirm on the portal that your State Nodal Agency is accepting applications before you prepare one.
What you get
- 35% credit-linked capital subsidy on the eligible project cost, up to ₹10 lakh per unit.
- Seed capital of ₹40,000 per self-help-group member for working capital and small tools.
- Support for branding, marketing and common infrastructure for FPOs, SHGs and producer co-operatives.
Who can apply
- Micro food-processing units — individuals, proprietorships, partnerships, FPOs, SHGs and producer co-operatives.
- You contribute at least 10% of the project cost; the rest is a bank loan.
- Existing individual units can be upgraded for any product. New units and group units are supported for the district's One District One Product (ODOP) — check your district's ODOP on the portal before you plan a new unit.
How to apply
- Register and apply online on the PMFME portal (pmfme.mofpi.gov.in).
- A District Resource Person helps prepare the project report and the bank loan application — free of charge to you.
- The bank appraises and sanctions the loan.
- The subsidy is released into the loan account once the loan is sanctioned, and stays locked for the scheme's lock-in period.
What makes a PMFME application succeed
- A realistic project report. Capacity, raw-material sourcing and sales assumptions that a bank officer finds believable. Our DPR Builder produces a bank-format draft you can refine with the District Resource Person.
- Registrations in place. FSSAI registration or licence, Udyam registration and, where turnover requires it, GST.
- Clean quotations. Every machine in the project cost should have a supplier quotation attached.
Can it be combined with other schemes?
A PMFME loan can be backed by a credit guarantee so collateral is not always needed, and MUDRA may suit smaller units. State food-processing policies (Haryana has a separate agri and food-processing policy) may offer more — but check the rule on combining a central and a State capital subsidy for the same machinery before assuming both.
Check your eligibility or talk to us about your food-processing project.
Frequently asked questions
Is PMFME open for new applications now?
PMFME ran to 2025-26 and was then extended only up to 30 September 2026. In August 2026 the Ministry of Food Processing Industries proposed continuing it for 2026-31, possibly with a higher subsidy ceiling, but no renewal had been approved when this article was last checked. Confirm on the PMFME portal that applications are open before you start.
Can a new unit apply, or only existing ones?
Both, with a difference: existing individual units can be upgraded for any product, while new units and group units (FPOs, SHGs, co-operatives) are supported for the district's One District One Product.
How much do I have to put in myself?
At least 10% of the project cost. The rest comes as a bank loan, and the 35% subsidy (up to ₹10 lakh) is released into the loan account once the loan is sanctioned.
Sources
This article is general information for Indian MSMEs, not advice on your specific case. Scheme terms, tax rates and due dates change; the sources above were checked when the article was written or last updated. Speak to a professional before acting on it.
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