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Meeting with
Ministry of Agriculture, Forestry and
Fisheries (MAFF),
Government of Japan
8th February, 2016. TOKYO
AGENDA1. Food Processing Industry in India
2. Imports of Agricultural Products in Japan
3. Advantage Andhra Pradesh
4. Exports - Compliance for Japan
5. Policy Initiatives in Andhra Pradesh for Promoting Food Processing Sector
6. New Initiatives
7. Govt. of India 2016 Budget
8. Govt. of India Incentives for Food Processing Sector
Presented By
Shri. M Girija Shankar, IAS
Secretary to Industries & Commerce
(Food Processing, Mines & Geology)
Government of Andhra Pradesh
Food Processing Industry in India
4
Food Processing Industry in India
ADVANTAGE INDIA
2nd Largest Arable Land in the World (Million Hcts)
Largest Cattle Population in the World
Climatic Diversity Allows For Year Round Supply
Leading Producer of Milk, Pulses, Bananas, Tea, Wheat, Mangoes
Immense potential for Food Processing – Only 2.2% of total food output is processed at present
Food Processing Sector Annual Average Growth
Rate 8.4%
Expected to grow at 15% in next 5 years
As of 2016, Food Sector is
valued at $267 Billion,
Food Processing sector is
worth $101 Billion
Total exports of Processed Foods grew
at 21.3% CAGR in the last decade.
42 sanctioned Mega
Food Parks, 60 Agri export zones in the
Country
Particulars UnitsGlobalRank *
Arable Land 157.4 Mill. Hcts. 2
Area Under Irrigation
66.8 Mill. Hcts. 1
Cattle 210 Million 1
*Year 2012
5
Food Processing Industry in India
India was the sixth largest exporter worldwide in 2013
6
12th Five Year Plan – Focus Areas
Infrastructure Development Scheme
Quality Assurance, HACCP & R&D and
Promotional Activities
Strengthening of Institutions
Mega Food Parks
Cold Chain, Value Addition and Infra preservation
Setting up/Modernisation of Abattoirs
National Institute of Food Tech. Entrepreneurship &
Management
Indian Institute of Crop Processing Technology
Indian Grape Processing Board
Quality Assurance Scheme
Research & Development
National Meat & Poultry Processing Board
A special fund of INR 2000 Crore (USD 300
Million) to NABARD for Agro Processing units iedesignated food parks
Imports Of Agricultural Products in Japan
8
Japan - Agricultural Products Imports (Global)
Source: UNCOMTRADE, as reported by the Importing countries (updated as on 30-September-2015)
108515034
1907580
12121881
4805759
1540503
1008343
683253
14692257
102669
973023135
3015
350211449382968266
OTHER MEAT
MAIZE
OTHER PROCESSED FRUITS & VEGETABLES
BUFFALO MEAT
ALCOHOLIC BEVERAGES
MISCELLANEOUS PREPARATIONS
PROCESSED MEAT
WHEAT
OTHER FRESH FRUITS
POULTRY PRODUCTS
OTHER FRESH VEGETABLES
DAIRY PRODUCTS
CEREAL PREPARATIONS
COCOA PRODUCTS
JAGGERY & CONFECTIONERY
OTHER CEREALS
FLORICULTURE
RICE
DRIED & PRESERVED VEGETABLES
ANIMAL CASINGS
ALBUMIN( Eggs & Milk)
PULSES
FRUITS & VEGETABLES SEEDS
WALNUTS
FRESH ONIONS
SHEEP/GOAT MEAT
CASEIN
FRESH GRAPES
NATURAL HONEY
GROUNDNUTS
GUARGUM
FRESH MANGOES
CUCUMBER AND GHERKINS( PREPD. & PRESVD)
MILLED PRODUCTS
Quantity in ‘000 MT
Exports - Compliance for Japan
AP CONFORMITY TO JAPAN QUALITY CONTROL COMPLIANCE
QC Standards for Marine & Aqua ProductsResidue Control Programmes
National Residue Control Plan (NRCP) Group A - Substances having anabolic effect and unauthorized substances:Group B - Veterinary drugs and Environmental contaminants:Monitoring of Pesticide Residues at National Level (MPRNL Monitoring of Cadmium content in Cephalopods Monitoring of radio nuclides in fishes Testing of commercial samples Testing of Ethoxyquin
QC Standards & Phyto Sanitary Requirements for export of Mango to Japan At Orchards LevelPre-harvest orchard survey for determining right stage of harvest of fruitsPesticide residue analysis through an accredited laboratory. Harvesting/Marking of Fruit CratesExport by Sea – half maturity stageFor Air Shipment – Full maturityTransport of mangoes to packinghouse facilityAt Packinghouse LevelApproval & Certification of Vapour Heat Treatment (VHT) Facility. Sealed and stamped by PPQS with marking “Cleared by PQ India for Japan”
10
ALBUMIN( Eggs & Milk ), 163
BASMATI RICE, 110
BUFFALO MEAT, 3446
COCOA PRODUCTS, 575
CUCUMBER AND GHERKINS( PREPD. & PRESVD), 10991
DAIRY PRODUCTS, 239
DRIED & PRESERVED VEGETABLES, 53
FLORICULTURE, 1378
FRESH GRAPES, 51
FRESH MANGOES, 949
FRESH ONIONS, 507
FRUITS & VEGETABLES SEEDS, 734
GROUNDNUTS, 20
GUARGUM, 15
JAGGERY & CONFECTIONERY, 2800
MANGO PULP, 4213
MILLED PRODUCTS, 763
MISCELLANEOUS PREPARATIONS, 16136
OTHER CEREALS, 34796
OTHER FRESH FRUITS, 1796
OTHER PROCESSED FRUITS & VEGETABLES, 3562
POULTRY PRODUCTS, 5203
PULSES, 334
A.P. AGRICULTURAL COMMODITIES EXPORTS 2014-15
Total Exports 42,35,965 MT
To JAPAN364 MT (0.009%)
11
255.71
16.06
56
32.65
3.56
0.14
364.12
POULTRY PRODUCTS
FRUITS & VEGETABLES…
OTHER CEREALS
CEREAL PREPARATIONS
MAIZE
OTHER PROCESSED FRUITS…
TOTAL
0 100 200 300 400
MAIZE, 1178940
CEREAL PREPARATIONS,
62498
NON BASMATI RICE, 2753800
WHEAT, 151890
A.P. AQUA EXPORTS 2014-15
12
357505
309434
124947
82353
70544
69569
31404
5488
1051243
78772
Fr. Shrimp
Fr.Fin Fish
Others
Fr.Cuttlefish
Dried items
Fr. Squid
Chilled items
Live items
Total
JAPAN
Qty in MT
Fr. Shrimp Fr.Fin Fish Others Fr.Cuttlefish Dried items Fr. Squid Chilled items Live items Total JAPAN
Advantage Andhra Pradesh
Andhra Pradesh-Leading Agricultural State of India
Contributes 27.59 % to state’s GSDP (constant prices)
in 2014-5
Forward Looking Farming Community
Popularly known as the ‘Rice Bowl of India’ owing to the
large amount of rice grown
8.45 million hectares of net cultivable area with strong F&V,
pulse, coconut and livestock products base.
Leading state in horticulture produce with nearly 2 million
hectare (Ha) under different fruit crops
Largest producer of fruits, eggs and aqua products
in India
63% of state’s population employed in agriculture
and related activities 14
15
AP-Attracting investments across the supply chain
Agriculture
Horticulture
Dairy & Poultry
1679 Units
1301 Units
315 Units
Sectors # Units
Over 3000+ Food Processing Units, 2 Mega Food
Parks, Multiple Agri Export Zones & Cold Chain
Facilities
Agriculture Snapshot of AP
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
2 1.93Anatapur Chittoor,Kadapa
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
1 2.73Chittoor, Krishna
Vizianagaram
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
1 1.35E. Godavari, Anantapur,
Kadapa
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
1 0.35Anantapur,
Kadapa, Prakasam
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
1 2.73Anantapur,
Kadapa, Prakasam
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
2 5.3W. Godavari,
Guntur, Kurnool
16
17
Agriculture Snapshot of AP
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
2 0.56Srikakulam,
Vizag, E. Godavari
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
1 1.55
Kurnool, Chittoor,
Anantapur,Kadapa
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
1 0.11 Guntur
18
Agriculture Snapshot of AP
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
2 0.79Prakasam, Chittoor, Krishna
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
1 1273
E. & W. Godavari, Krishna, Chittoor
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
3 18.16Prakasam,Chittoor, Krishna
Rank In IndiaProduction in AP (Mill.
MTs)Key Districts
1 2.01
E. & W. Godavari, Krishna,
Prakasam
19
District Profile (1/13)
20
District Profile (2/13)
21
District Profile (3/13)
22
District Profile (4/13)
23
District Profile (5/13)
24
District Profile (6/13)
25
District Profile (7/13)
26
District Profile (8/13)
27
District Profile (9/13)
28
District Profile (10/13)
29
District Profile (11/13)
30
District Profile (12/13)
31
District Profile (13/13)
32
Robust Infrastructure and Ample Skilled Labour
Large base of skilled manpower
Over 120 polytechnics
225 engineering colleges
35 pharmacy institutions
Strong diaspora active in the sector
Good road network
4 major ports
4 active airports
24 X 7 power
10 lakh acres land bank
VCIC and CBIC
ROBUST
INFRASTRUCTURE
SKILLED
LABOUR
33
Power, Land & Connectivity
Power • 1st state in South India to offer 24X7 power to industry
• Capacity Addition from 9,600 MW to 17,000 MW by 2019 through solar, wind, thermal
• Massive Strengthening of electricity grid
• 3.5 GW of Solar Power capacity being added
Land • Existing land bank of 300,000 acres, adding further 700,000 acres, total planned land bank of 1
million acres
• GIS enabled online Land Bank information
• Affordable land rates and land given on 99-years lease
• Scope for developing industrial parks on PPP basis
Connectivity • Ports – 6 under operation, 6 under development and 5 planned
• Airports – 6 existing, 1 mega Aerotropolis and 5 no-frills airports to be developed
• Road Network – 45,000 km (4,423 km of National Highways)
• Railway - 7,040 track km of network
• Inland Water Transport - 888 km National Waterway
34
Conducive Business Environment
2ndRank amongst Indian States
(World Bank Study for DIPP, Govt. of India,
September 2015)
EASE OF DOING BUSINESS
COUNTRY
DESKS FOR
STRATEGIC
PARTNERS
APPROVALS
IN 21 DAYS
SINGLE DESK PORTAL
(identified as ‘Best
Practice’ by World
Bank)
INVESTMENT
FACILITATION
OFFICERS
INVESTMENT
TRACKER
State Rank (Score)
Gujarat 1 (71.14%)
Andhra Pradesh 2 (70.12%)
Jharkhand 3 (63.09%)
Chhattisgarh 4 (62.45%)
Madhya Pradesh 5 (62.00%)
35
Recent Investment Commitments by Major Food Processing Companies
Home to PepsiCo's biggest manufacturing unit in the country,
Expected to benefit 32,000 mango farmers.
Ultra Mega Food Parks being set up by leaders like Jain Irrigation
to boost agro processing
Britannia Industries Ltd. has set up a biscuit manufacturing facility
in Kuppam, Chittoor.
MAJOR PLAYERS
IN AP
Policy Initiatives in Andhra Pradesh
for Promoting Food Processing
Sector
37
AP Food Processing Policy 2015-2020
OBJECTIVES
Make Andhra Pradesh one of the most preferred destinations for food processing industries
Develop commodity-based clusters to enable a focused and planned approach to developing the food processing industry
Identify and bridge existing infrastructure gaps affecting the industry
Promote innovation, research & development in the industry and ensure continuous technology up gradation.
Develop Andhra Pradesh as an Innovation Society of global repute
Undertake capacity building and enhance competitiveness of food processing industry in both domestic and international
markets.
Attract new investments worth Rs 5,000 Crore (USD 770 Million) in the sector by 2020
Create 50,000 additional employment opportunities in the sector by 2020
TARGETS
38
Highlights of AP Food Processing Policy 2015-20
98
VAT/CST/SGST Concession 76
5Power Tariff Subsidy4
Skill Development3Investment Subsidy2
Interest Subvention1
Marketing Assistance
Transport and Export Incentives
Research & Development
Quality certification/Patent registration
10 All permissions and clearances in 21 days under Single Desk Policy
Schemes Under A.P. Food Processing Policy 2015 – 20
40
Schemes Under A.P. Food Processing Policy 2015 - 20
Mega Food Parks
Integrated Food
Parks
New Food
Processing Units
Eligible Maximum Grant 50% of the Project Cost
Limited to Rs 50 Crs. (USD 7.7 Million)
Land Required - 50 Acres
Eligible Maximum Grant 50% of the Project Cost
Limited to Rs 20 Crs. (USD 3 Million)
Land Required - 30 Acres
Eligibility 25% of the Project Cost limited to Rs.5 Cr (USD 770K)
includes Plant & Machinery & Technical Civil Works
• Interest Subsidy 5 Years from COD @ 7% limited to Rs.2 Cr (USD 300K)
41
Schemes Under A.P. Food Processing Policy 2015 - 20
Cold Chain Units
Primary
Processing Units /
Collection Centers
Upgradation /
Modernization of
existing FP Units
Eligible Maximum Grant 35% of the Project Cost
Limited to Rs 5 Crs. (USD 770K)
• Interest Subsidy 5 Years from COD @ 7% limited to Rs.2 Cr (USD 300K)
Eligible Maximum Grant 50% of the Project Cost
Limited to Rs 2.5 Crs. (USD 380K)
Interest Subsidy 5 Years from COD @ 7% limited to Rs.1 Cr (USD 150K)
Eligibility 25% of the new / upgraded equipment cost
limited to Rs.1 Cr (USD 150K)
42
Schemes Under A.P. Food Processing Policy 2015 - 20
Modernization of
Abattoirs
Reefer Vehicles /
Mobile -
Pre Cooling Vans
Setting up of
Testing Labs
Eligible Maximum Grant Rs 15 Crs. (USD 2.4 Million)
Maximum eligible grant is 50 % of Plant & Machinery
and Technical Civil Work
Eligible Maximum Grant Rs 10 lakhs (USD 15,400) per vehicle.
Eligibility 50 % of cost of the reefer vehicle
Rs 5 Crs. (USD 770K) for NABL approved labs
Rs 5 lakhs (USD 7,700) for existing Food Processing units
Eligibility 50 percent of the project cost
43
Schemes Under A.P. Food Processing Policy 2015 - 20
Units for Processing of Waste Produced in FP Units
Eligible Maximum Grant Rs 2 Crs. (USD 300K)
Maximum eligible grant is 50 % of Plant & Machinery
and Technical Civil Work
• The Objective of the scheme is to ensure proper utilization of the waster
generated by the food processing unit in the clusters, primarily organic
residue of the processed raw material.
Incentives Under A.P. Food Processing Policy 2015 – 20
45
Incentives Under A.P. Food Processing Policy 2015 – 20
Land Conversion
Charges & Stamp
Duty Exemptions
Food Processing will be declared as Public Utility
under Industrial Disputes Act 1947
GoAP shall facilitate land clearance under Single Desk Policy
GoAP will reimburse the Non-Agriculture Land Assessment (NALA)
tax as applicable for conversion of land
for setting up Food Processing units
100% reimbursement of stamp duty and
transfer duty on purchase or lease of land/shed/buildings.
Ease of Doing
Business
46
Incentives Under A.P. Food Processing Policy 2015 – 20
Interest Subsidy
7% per annum on term loan taken for fixed capital investment, for a period of
5 years from commencement of operations, up to Rs. 2 Crore (USD 300K)
7% per annum on term loan taken for PPCs and PCCs
for a period of 5 years from commencement of
operations, up to Rs. 1 Crore (USD 150K)
25% of project cost (includes P&M, technical civil works), up to Rs 5
Crore (USD 750K) for new units
25% of new/upgraded equipment cost, limited to Rs 1 Crore (USD
150K) for technology upgradation
50% for setting up Primary Processing Centers (PPCs) and Primary
Collection Centers (PCCs) limited to Rs 2.50 Crore (USD 375K)
35% for setting up cold chain for agriculture/horticulture/dairy/meat
produce, up to a Rs 5 Crore (USD 750K)
Capital Subsidy
47
Incentives Under A.P. Food Processing Policy 2015 – 20
Tax Concession
Power tariff subsidy will be at Rs 1.5 per unit (USD 0.02 per unit)
Electricity duty exemption for self use from captive power plants
FPI will continue to be seasonal industry
under the regulation of APERC
Net VAT/CST/SGST reimbursement:
100% for micro and small enterprises for 5 years
75% for medium enterprises for 7 years
50% for large enterprises
Power Subsidy
48
Incentives Under A.P. Food Processing Policy 2015 – 20
100% exemption of APMC cess/ fees for a maximum period of 10
years in procurement of agriculture / horticulture produce
directly from farmers.
This will be applicable to both new and existing Food Processing Units.
APMC Cess/fees
Marketing Assistance
Reimbursement of 50% of cost of participation (maximum of 10
MSME units per year) for participating in international trade fairs, with a
ceiling of Rs 5 Lakh per unit per annum (USD 7,700 per unit per annum)
Reimbursement of 75% of space rent with a ceiling of Rs 2 Lakh per
year (USD 3,000 per year) (maximum of 10 MSME units) for setting up
stalls to extend their business interests in exhibitions and
conferences.
49
Incentives Under A.P. Food Processing Policy 2015 – 20
Skill Development Initiatives
GoAP will encourage setting up of training centers in commodity based
clusters
GoAP will reimburse 50% of cost involved in skilling local manpower
limited to Rs 5000 per person
Transportation and Export Incentives
Reimbursement of 30% of road transport charges till inland container
depot (ICD)/port for export of perishable goods with a ceiling of Rs 5
Lakh (USD 7,700) per annum per unit for a period of 3 years from date
of commercial production
50
Incentives as per policy
Quality Certification / Patent Registration
Reimbursement of 50% of cost of certifications up to Rs 5 Lakh
(USD 7,700) per unit
Reimbursement expenditure incurred in obtaining patents for food
processing units / cold chain projects to the extent of Rs 10 lakh
(USD 15,000) per patent
The Single Desk Bureau (Bureau) will be chaired by the Commissioner ofIndustries and shall comprise of Head of Departments (HoDs)
This Bureau shall be supported by a robust IT application for tracking andmonitoring of all industrial clearances.
The members of the Bureau shall ensure that department-specificclearances are provided within stipulated timelines.
The Commissioner of Industries will be authorized to issue specificclearances should the concerned department not provide clearance afterfollowing due process within stipulated time.
51
Single Desk Policy 2015-20
Return
The Single Desk Policy aims to create a conducive ecosystem to provide all clearances required to setup industry within 21 working days
52
Single Desk Policy (SDP) 2015-20 - Salient Features
• For starting an industry, a subset of 24 different clearances may be
required.
– 13 approvals / clearances are necessary in the Pre-establishment stage
– 11 approvals / clearances are necessary in the Pre-operation stage
• Measures to simplify process and procedures under SDP
• Grievance appeal system
Spot Approvals
Deemed Approvals
based on self certification
Assignment of Inspection to
Private Technical Experts
Parallel Processing of
Clearances
Streamlined Process
53
Existing and Upcoming Focus Mega Food Parks
• Srini Food Park at Chittoor
• Multi product Food Park
• Commercial production started
• Mango, Tomato, papaya, Basil, Pomegranate, coconut, noodles
are processed :Project cost INR 150 Cr. (USD 23 Million)
• Godavari Aqua Mega Food Park at Bhimavaram
• Aqua produce processing Food Park.
• Under construction: Project cost INR 300 Cr.
(USD 46 Million)
• Krishna Mega Food park at Agiripalli
• Multi product Food Park
• Construction to start : Project cost INR 350 Cr.
(USD 53 Million)
• Spices Park at Guntur
• Spices Processing &
export
• Ultra Mega Food Park at
Kurnool
• Project cost INR 380 Cr
(USD 58 Million)
54
Future Potential for Food Parks in AP
Cashew, Mango Pineapple
Coconut, Maize, Banana
Vegetables, Mango, Guava, Eggs
Spices, Maize
Aqua, Lime, Lemon, Orange
Banana, Papaya, Onion
Mango, Tomato, Papaya, Milk,
Eggs
Pomegranate, Papaya,
Banana & Sweet Orange
New Initiatives
New Initiatives – Smart Agribusiness Platforms
• Smart Agribusiness Platforms Network of Andhra Pradesh (SAPNAP)
• 13 District level Incubators to be established and 7 Value chain Pilots to beimplemented in Phase-I
• ‘Farm-to-Fork’ value chains to be mapped and developed for existing andpotential crops/ commodities / products.
• Incubators to have Office / Lab spaces, trial fields, common facilities, pilotequipment and start up ecosystem to help new enterprises take off.
Crop /Commodity
Cluster (Farmers, Crops,
Progressive Farmers)
Thematic Incubators Platforms
Skill Development
& Acceleration
Programs
Value Chains • Mango (Fresh & Processed)• Coconut• Chili• Tomato• Tuna• Shrimp
56
Thematic Incubators• Food Business Incubator• Seed Technology Incubator• Agri-Biotech Incubator• Crop Specific Incubators• Dairy & Fodder Incubator• Aquaculture Incubator
Thematic Platforms• GAP Centers• Food Systems Coalitions• ICT based Smart extension
57
New Initiative - Farmer Producer Organisations
A Pathway to Link Farmers to Value Chains -
A larger strategy to increase the income of small and marginal farmers.
1. Government of Andhra Pradesh is set launch 1000 FPOs covering One Million
Farmers to empower farmers with technical, marketing and institutional management
know how to collectively leverage production & marketing strength.
2. The FPOs aim at reducing the complexity for the farmer and to ensure continuous and
efficient supply to the value chain.
FPOs
Financial & Technical (Credit, Savings,
Insurance, Extensions)
Training & Networking (HRD, Policy
advocacy, etc.)
Marketing Linkages (Contract farming
etc.)
Input Supply (Seed, Fertilizer,
machinery)
Crop/Commodity/Product
Specific FPOS
Value ChainsProduction Clusters
Industry Partnerships
Incentives for Horticulture Sector
Keeping in mind, the vast potential in horticulture sector for both fresh and processed fruits & vegetables, GoAP is giving special emphasis and the following schemes and incentives are in operation
58
Mission for Integrated Development of Horticulture (MIDH)
Rashtriya Krishi Vikas Yojana (RKVY)
Prime Minister Krishi Sinchayee Yojana (PMKSY)
National Mission on Oil Seeds and Oil Palm (NMOOP)
Special State Plan for Development Initiatives in Horticulture
Government of AP enabling implementation of the programs in
cluster approach for holistic development of Horticulture Value Chains
Quality Seed / planting materialPre & Post-harvest handling
Primary ProcessingOn Farm Value Addition
Quality CertificationsMarketing (FPOs)
Incentives for Horticulture Sector
IPM/INM/ICM/Gap Certification Programs are under implementation to meet the quality
parameters and standards of the importing countries.
Greenhouse
Cultivation
High Density
Production
Certification
Programs
59
Special programs for quality and productivity enhancement are under implementation
for vegetables and flowers under protected cultivation (Greenhouse Cultivation).
High density/Ultra high density/meadow orcharding technologies are being
promoted for higher productivity, quality and to minimize pre and post harvest
losses.
Incentives for Fisheries Sector
60
Incentives on Purchase
of Land, lease of
Land/Shed/Buildings
Capital Subsidy /
Financial Assistance
o Aquaculture processing units will be incentivized by providing 100% stamp duty exemption
in land registration/lease of land/, mortgage deed/Bank documentation/ Hypothecation etc.
o For shrimp processing units including cold chain maintenance, subsidy of 50% inclusive
of land cost with upper ceiling limit of Rs.5 crores.
o For fish processing / filleting units including cold chain, land cost etc., subsidy of 50%
with upper ceiling limit of Rs. 7 crores (USD 1 Million)
o For purchase of Reefer vans, a subsidy of 50% with maximum of Rs. 10.00 Lakhs (USD
15,000) per vehicle will be provided from 2016-17 onwards
o Financial assistance will be extended for farm mechanization like pumps and aerators
with 50% subsidy. Solar pumps, solar lights and solar based aerators will be given on
60% subsidy to the prawn and shrimp farms up to maximum of 2 ha per farmer per
annum .
o Interest subvention of 6% will be provided on bank loan subject to maximum of Rs.2.5
Crores (USD 390K) for 5 year period to aqua processing units, ice plants and cold
storages.
o Interest subvention of 6% per annum up to a maximum of Rs.2.00 Crores (USD 310K)
will be provided to the Fish Feed Manufacturing units only for Five Years.
Interest Subsidy
Incentives for Fisheries Sector
61
Power and Water
Subsidy
o Power subsidy to fish/prawn/shrimp processing unit and ice plants from the date of
commencement of commercial production and will be on par with industrial policy from
2016-17.
o Power will be supplied to Shrimp and Prawn culture farms at Rs.3.75 ps/ unit for a
maximum of 2 hectares per aqua-farmers/ shrimp farmers from the year 2016-17
Other Incentives
o Cold storage at ports/ Fishing harbours with subsidy will be permitted on par with industrial
policy.
o Financial assistance of 50 % for establishing Water and soil analysis labs with a unit cost
of maximum of Rs.10.00 lakhs (USD 15,000).
o Financial assistance of 40 % for establishing Quality control / Antibiotic residue testing
labs with a unit cost of maximum of Rs. 2 crore (USD 310K).
o Incentives to be provided to feed manufacturing units, aerator manufacturing, fish
processing equipment on par with industrial policy.
Government of India 2016 Budget Snapshot
63
Govt of India 2016 Budget Highlights
Allocation for Agriculture and Farmers’ welfare is 35,984 crore (USD 5.5 Billion)
‘Pradhan Mantri Krishi Sinchai Yojana’ to be implemented in mission mode. 2.85Million hectares will be brought under irrigation.
Implementation of 89 irrigation projects under AIBP.
A dedicated Long Term Irrigation Fund will be created in NABARD with an initial corpusof about INR 20,000 Crore (USD 3.1 Billion)
Programme for sustainable management of ground water resources, costing INR6,000 Crore (USD 923 Million) will be implemented
500,000 farm ponds and dug wells in rain fed areas and 1,000,000 compost pitsfor production of organic manure will be taken up under MGNREGA
Soil Health Card scheme will cover all 140 Million farm holdings by March 2017.
64
Govt of India 2016 Budget Highlights
2,000 model retail outlets of Fertilizer companies will be provided with soil and seed testingfacilities during the next three years
Promote organic farming through ‘Parmparagat Krishi Vikas Yojana’ and 'Organic Value ChainDevelopment in North East Region'.
Unified Agricultural Marketing ePlatform to provide a common e-market platform for wholesalemarkets
Allocation under Pradhan Mantri Gram Sadak Yojana increased to INR 19,000 Crore (USD2.9 Billion). Will connect remaining 65,000 eligible habitations by 2019.
To reduce the burden of loan repayment on farmers, a provision of INR 15,000 Crore (USD2.3 Billion) has been made in the BE 2016-17 towards interest subvention.
Allocation under Prime Minister Fasal Bima Yojana INR 5,500 Crore (USD 846 Million).
INR 850 crore (USD 130 Million) for four dairying projects - ‘Pashudhan Sanjivani’, ‘NakulSwasthya Patra’, ‘E-Pashudhan Haat’ and National Genomic Centre for indigenous breeds
Government of India Policy & Incentives
for Food Processing Sector
Govt of India Policy on Foreign Direct Investment (FDI)
• Foreign Direct Investment (FDI) is permissible for all the processed food
products up to 100% on automatic route except for items reserved for Micro
and Small Enterprises (MSEs).
• FDI in MSEs (MSMED, Act 2006) will be subject to the sectoral caps, entryroutes and other relevant sectoral caps, entry routes and other relevantsectoral regulations.
• The export obligation would be applicable from the date of commencement ofcommercial production and in accordance with the provisions of section 11 ofthe Industries (Development & Regulation) Act, 1951.
• Government of India has declared Agriculture and Food Processing a PrioritySector and encouraging Private Participants and PPPs.
66
GOI Incentives for Food Processing
Sectors Products Incentive
Dairy & Horticulture Milk, Milk Products, Vegetables, Nuts and Fruits (Fresh &
Dried)
Nil Duty
Dairy & Horticulture Processed Fruits and Vegetables, Soya Milk
Drinks, Flavored Milk of animal origin
Merit rate of 2% without CENVAT
or 6% with CENVAT
Cold Storage All refrigeration machineries and Parts used
for installation of cold storage, cold room or
refrigerated vehicle, for the preservation,
storage, transport or processing of agricultural,
apiary, horticultural, dairy, poultry
• Pasturing, drying, evaporating, etc. machinery
used in Dairy sector
Nil Duty
A&H Fisheries Machinery for the preparation of meat, poultry,
fruits, nuts or vegetables and on presses,
crushers and similar machinery used in the
manufacture of wine, cider, fruit juices or
similar beverages and packing machinery
Reduction from 10% to 6%
Incentives from GOI are in addition to GoAP incentives
Central Excise duty
67
GOI Incentives for Food Processing
Sectors Products Incentive
Horticulture • Construction, Erection, Commissioning or installation of original works
pertaining to postharvest storage infrastructure for agricultural produce
including Cold storages for such purposes
• Mechanized Food grain handling system, machinery or equipment for
units processing agricultural produce as food stuff excluding alcoholic
beverages
• Services of Loading, unloading, packing, storage or warehousing of
agricultural produce
• Services of pre-conditioning, pre-cooling, ripening, waxing, retail packing,
labeling of fruits and vegetables
• Services by way of transportation by rail or a vessel and by a goods
transport agency used for transportation of agricultural produce and food
stuff including flours, rice, pulses, tea, coffee, jaggery, sugar, milk, milk
products, salt and edible oil, excluding alcoholic beverages
Nil Tax
Incentives from GOI are in addition to GoAP incentives
Service Tax
68
GOI Incentives for Food Processing
Income Tax
Sectors Products Incentive
Horticulture
(Cold Chain
Infrastructure)
• Setting up and operating a cold chain facility
• Setting up and operating warehousing facility for storage of
agricultural produce
• Bee-keeping and production of honey and beeswax
• Setting up and operating a warehousing facility for storage of
sugar
100% deduction in
Expenditure (This deduction is
allowed only for the investment
made in the previous year and
prior to commencement of its
operations.)
• New units engaged in processing, preservations and packaging
of fruits or vegetables, meat & meat product, poultry, marine or
dairy products
100% tax exemption for
the first 5 years’ of
operation, and after that, t the
rate of 25% of the profits being
exempted from tax; 30% in case
of a company
Incentives from GOI are in addition to GoAP incentives 69
Nodal Contact Points
AP Food Processing Society (APFPS)
2nd Floor, AP Khadi and Village Industries Board Building,
Humayun Nagar, Masab Tank Road,
Hyderabad – 500028, India
Telephone: +91 40-23392202 Fax: +91 40-23395655
www.apfps.com
M.Girija Shankar, IASSecretary to Industries &
Commerce, Food Processing, Mines & Geology
Y.S.PrasadChief Executive OfficerAndhra Pradesh Food
Processing Society
Abdul Rahman IlyasAdvisor – AgribusinessIndustries & Commerce
(FP)
Y.Vidya SankarOSD – Food ProcessingIndustries & Commerce
(APIIC)
Thank you
Annexure I: Pre-establishment Stage Approvals/ Clearances
Annexure I: Pre-establishment Stage Approvals/ Clearances
Annexure II: Pre-operation Stage Approvals/ Clearances
Annexure II: Pre-operation Stage Approvals/ Clearances