Uttar Pradesh Food Processing Industry Policy 2023 Capital Subsidy

What is the Uttar Pradesh Food Processing Industry Policy 2023?

Uttar Pradesh Food Processing Industry Policy 2023 is the state's incentive framework for turning farm produce into processed food inside Uttar Pradesh. The nodal agency named on the Invest UP portal is the Horticulture Department, working through the Directorate of Horticulture and Food Processing, with Invest UP and the Nivesh Mitra single window portal handling applications and clearances.

Uttar Pradesh is India's largest producer of several horticultural crops, and the policy is built around the gap between what the state grows and what it processes. Its core instrument is a capital subsidy of 35 percent on plant, machinery and technical civil work, capped at Rs 5 crore, backed by land, mandi, stamp duty and cold chain concessions that reduce the cost of setting up a unit.

The policy replaced the Uttar Pradesh Food Processing Industry Policy 2017 and its revisions. Invest UP has since published implementation guidelines, most recently updated in October 2025.

Who is eligible for the Uttar Pradesh Food Processing Industry Policy 2023?

Who can claim incentives:

• New food processing industries (FPIs) set up anywhere in Uttar Pradesh.
• Existing food processing units undertaking expansion, modernisation or upgradation.
• Promoters of cold chain, value addition and frozen storage infrastructure.
• Agro processing cluster developers with at least five food processing units and a minimum investment of Rs 25 crore.
• Self-help groups, farmer producer organisations and farmers under the decentralised processing and storage component.
• Food processing start-ups working on agricultural value chain development, production and productivity estimation and evidence-based decision tools.

Who cannot apply:

• An individual seeking a personal cash benefit is not eligible. Every component of the policy funds a unit, a cluster, an asset or a registered group project.
• Pure trading and repackaging businesses that do not process food cannot apply, since the subsidy is computed on processing plant, machinery and technical civil work.
• Units located outside Uttar Pradesh are not eligible, even if they source produce from the state.
• Land cost is not eligible expenditure. A project whose spending is largely on land will find the subsidy base much smaller than expected.

How much is the capital subsidy, and on what?

The Rs 5 crore new-unit ceiling and the Rs 10 crore cold chain ceiling are the two figures most applicants plan around. Note that the value addition, cold chain and linkage components follow the guidelines of the central PM Kisan Sampada Yojana, so a project may need to align its design with those norms.

What land, stamp duty and mandi concessions come with the policy?

• Agricultural land purchase, food processing industries may purchase more than 12.5 acres of agricultural land, above the normal ceiling.
• Non-agricultural use declaration, exemption from the charge of 2 percent of circle rate value otherwise payable as the fee for declaring non-agricultural use.
• Exchange of government land, no fee applies where government-owned land falls within the project site.
• Change of land use, 50 percent of CLU fees waived.
• External development charges. A 75 percent rebate where the food processing unit is set up on land on which the authorities have carried out no development work.
• Stamp duty — 100 percent exemption on land purchased for establishing a food processing industry.
• Mandi fees and cess; exemption for agricultural produce procured from other states for processing in Uttar Pradesh, and for produce sold directly to processing units by farmers. The whole state is a single unified market for food processing so far as mandi fees and cess are concerned, and a licence holder of any mandi in the state may work in other mandis too.

What other financial support does the policy give?

• Solar power subsidy to 50 percent on solar power utilities supplying electricity to processing units in rural areas, and 90 percent for women entrepreneurs in the same category.
• Freight subsidy on exports: 25 percent, excluding exports to Nepal, Bangladesh and Bhutan.
• Interest subsidy on reefer vehicles and mobile pre-cooling vans; reimbursed for five years, subject to a maximum of Rs 50 lakh.
• Disease-free area certification. The state sponsors studies to certify or declare an area disease-free, with potato in Agra and Kannauj and durum wheat in Bundelkhand named as the first cases. Certification of this kind materially improves export access for produce from those districts.

How to apply for the Uttar Pradesh Food Processing Industry Policy 2023 subsidy

1. Open niveshmitra.up.nic.in and run the Know Your Approvals and Incentives wizard, selecting the Food Processing and Dairy sector, to see exactly which clearances and incentives apply to the project.
2. Register on Nivesh Mitra, activate the account and file the Common Application Form, which captures the applicant's constitution, promoters and proposed district once for all subsequent applications.
3. Upload the Detailed Project Report, separating plant and machinery, technical civil work and land, along with land documents and the FSSAI licence or application.
4. Obtain the licences and NOCs the unit needs through the same portal, paying the consolidated fee shown online.
5. Complete the project and start commercial production, then file the capital subsidy claim with machinery and civil work invoices, bank payment proof and a chartered accountant's certificate of the expenditure incurred.
6. Answer the departmental query if one is raised. Nivesh Mitra permits only one query per application, raised within seven days of submission.
7. Track the claim on the dashboard until the subsidy is sanctioned and credited.

Applicants who prefer face-to-face help can take the same papers to the District Horticulture Officer or the District Industry Centre, which assist with project preparation, but the application itself is submitted online.

How do applicants check the status of a claim?

Nivesh Mitra shows real-time application status on the investor dashboard and sends automated SMS and email alerts at each stage of processing. The portal also carries a comprehensive grievance management system with a chatbot and an automatic escalation mechanism. Applicants should keep the Common Application Form reference number, since every clearance and every incentive claim is linked to it.

Why food processing subsidy claims get rejected

• Land cost claimed as eligible expenditure. The 35 percent subsidy is computed on plant, machinery and technical civil work only.
• No FSSAI licence for the processing activity at the time of claim.
• Expansion claim without evidence of the original unit's book value, so the 25 to 35 percent expansion rate cannot be applied.
• Cluster claim short of the thresholds, fewer than five units, or investment below Rs 25 crore.
• Invoices without matching bank payment proof, which the department treats as unverified expenditure.
• SHG or FPO component claimed by an individual, which is outside the eligibility of that component.
• Departmental query not answered within the window Nivesh Mitra allows.

Key dates and current status

Invest UP records the Hindi policy text as issued on 2 February 2023, followed by a government order on the promulgation of the policy and an amendment order in April 2023 covering the procedure for smooth project setup. Implementation guidelines have been reissued more than once, with the most recent update recorded on 15 October 2025. The Invest India state profile notes that 19 new projects were approved under the policy, which also incentivises solar energy, cold chain infrastructure and cluster models. No last date for applications has been announced.

Where to get help

• Invest UP, 6th Floor, Block A, PICUP Bhawan, Lucknow 226010
• Phone: +91-522-3129570; call centre 0522-3117976 and +91 522 6923000, 9:30 AM to 6:00 PM, Monday to Saturday on working days
• Email: info@investup.org.in
• Grievances: the Query and Grievance Redressal module on niveshmitra.up.nic.in
• Nodal department: Horticulture and Food Processing Department, Government of Uttar Pradesh

There is no fee for registering on Nivesh Mitra or for filing an incentive claim beyond the statutory consolidated fee displayed on the portal, and no agent is required to submit an application.