Agro-Processing Clusters: To Boost Food Processing Industry

APC Scheme

Agriculture and Food Industry in India

India is an agri-dependent country with agriculture being one of the main pillars of the economy. India is the largest producer of spices, pulses and milk in the world. India is the world’s second-largest producer of fruits, vegetables, rice, wheat, sugarcane and groundnut in the world. India’s rich agricultural raw material availability acts as a base for the food processing industry.

Post-harvest Losses

While India’s performance in agriculture production is encouraging, post-harvest losses in the country are alarming. The approximate loss in the post-harvest period in the products like eggs, fish, meat and milk is 10 to 25%. The post-harvest wastage in the fruits and vegetables segment is around 30-40%.    

One of the main reasons for this vast amount of post-harvest losses in India is the lack of modern infrastructure to store and process perishable food products. This lack of required infrastructure has also emerged as an impediment to the growth of the food processing industry in India. Out of the total agriculture produce in India, a mere 10 is processed which is very less when compared with the US and China.        

Considering the post-harvest losses in the agriculture sector as a serious issue, the government has been taking several measures to minimize the wastage of the agri-commodities in the country. The government recently sanctioned Rs. 1 lakh crore under the Atmanirbhar Bharat scheme to improve the cold storage facilities across the country and minimize the post-harvest losses.   

Agro-processing Clusters

Another such measure is the setting up of agro-processing clusters across the country. The Ministry of Food Processing Industries is implementing the APC Scheme for Creation of Infrastructure for Agro-Processing Clusters under the PMKSY.   

Through the scheme, the government aims to develop modern infrastructure in the designated clusters and encourage entrepreneurs to setup food processing units in the agro-processing clusters. It would help in reducing the wastage of agri-produce and boost the food processing industry in the country.        

Entrepreneurs interested in setting up food processing in these food-processing clusters in India will have access to basic enabling infrastructure and core infrastructure.        

Basic Infrastructure

  • Industrial plots
  • Boundary wall
  • Roads 
  • Drainage
  • Water & electricity supply
  • Effluent treatment plant
  • Parking bay
  • Weigh bridges
  • Common office space

Core Infrastructure

  • Food testing laboratory
  • Cleaning, grading, sorting and packing facilities
  • Steam generation boilers
  • Dry warehouse
  • Cold storage
  • Pre-cooling & ripening chambers
  • IQF
  • Specialized packaging and other common processing facilities

Apart from the required infrastructure, the government also provides a grant-in-aid (Upto 10 crore per project) of 35% of the eligible project cost in general areas and 50% of the eligible project cost in the North East region, ITDP areas and UTs of India.            

The eligible segments for setting up processing units in the agro-processing units include:

  • Fruits & vegetables
  • Milk
  • Meat, poultry and fish
  • Ready to eat, ready to cook, breakfast cereals, snacks and other related food products
  • Flour, pulse and oil mills
  • Spices, coconut and mushroom
  • Wines and hops
  • Food flavours, food additives, colours and oleoresins
  • Rice mills (only in North East states)

As a part of the scheme, the government already sanctioned more than 60 clusters across many states in the country. In Karnataka, there are five agro-processing clusters in Udupi, Chitradurga, Davanagere, Dakshin Kannada and Vijayapura.                   

Register Now

If you are planning to set up a food processing unit in the agro-processing clusters under the agro-processing cluster scheme, kindly register with SolutionBuggy. With our network of verified food consultants, we provide entrepreneurs assistance in setting up the processing unit right from project conceptualization to implementation and administration, including the DPR, government approvals, plant machinery, civil and structural activities, business planning, HR, marketing, etc. under


Any entrepreneur planning to setup food processing industry is eligible for the scheme

Entrepreneurs interested in setting up food processing in these agro-processing clusters will have access to basic enabling infrastructure such as water & electricity supply, office space, etc. and core infrastructure including cold storage, warehouse, packaging facilities, etc.

The government provides a grant-in-aid (Upto 10 crore per project) of 35% of the eligible project cost in general areas and 50% of the eligible project cost in the North East region, ITDP areas and UTs of India.     

The different categories under which entrepreneurs can setup processing units include fruits & vegetables, meat, milk, RTE/RTC foods, grains, mushrooms, spices, food flavours, additives, etc.

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