Invest to Grow

Food processing is one of the six (6) focus sectors under the Government of India’s Make in India initiative and is central to achieve the aim of doubling farmers’ income.

A huge domestic market of 1.3 billion customers with a young population, abundant agricultural base, and plethora of opportunities across the value chain make India an ideal destination for investment in Food Processing Sector. Partner with us and become a part of an incredible growth story.

Policies

Foreign Investor can commence business in India as:

1. Indian Company*
  • Joint Venture
  • Wholly Owned Subsidiary
    JV/ Wholly Owned Subsidiary as (i) Private Limited or (ii) Public Limited Company, s.t.
    Companies Act, 2013
2. Foreign Company**
  • Liaison Office
    To represent the parent company in India
  • Branch Office
    To undertake activities such as Export, Import, research, consultancy etc.
  • Project Office
    Activities as per contract to execute project
3. Limited Liability Partnership
  • LLP
    Subject to provisions of LLP Act, 2008
    FDI permitted under automatic route in LLPs operating in sectors/ activities where 100% FDI is allowed, through the automatic route and there are no FDI-linked performance conditions***

Incorporation of a company in India is s.t. sectoral caps and requisite approvals

**RBI guidelines regarding the establishment of LO/ BO/ PO. As per Companies Act 2013, only a resident Indian with PAN to be appointed for receiving notices in India for foreign company.

***For detailed definitions, clarifications/ exceptions, please refer to Consolidated FDI Policy, effective from August 28,2017, Amendment to FDI policy in Jan 2018

Liaison Office (LO)

Profit making track record during the immediately preceding three financial years in the home country and net worth of not less than $ 50,000 or its equivalent.

Branch Office (BO)

Profit making track record during the immediately preceding five financial years in the home country and net worth of not less than $ 100,000 or its equivalent.

Project Office (PO)
  • NILL
LO

LO can not undertake any commercial activity and acts as a channel of communication between the principal place of business or head office and entities in India. Its role is limited to collecting information about possible market opportunities and providing information about the company and its products to prospective Indian customers. It can promote export/import from/to India and also facilitate technical/financial collaboration between the parent company and companies in India. It cannot earn any income in India.

BO

BO can be set up by foreign companies. The permitted activities include export/import of goods; rendering professional or consultancy services; carrying out research work, in which the parent company is engaged; promoting technical or financial collaborations between Indian companies and parent or overseas group company; representing the parent company in India and acting as buying/selling agents in India; rendering services in information technology and development of software in India; rendering technical support to the products supplied by the parent/ group companies and foreign airline/shipping company.

PO

PO can be set up to execute specific projects in India and cannot undertake or carry on any activity other than the activity relating and incidental to the execution of the project.

LO

NA

BO

Permitted to remit profits net of applicable taxes and on submission of requisite documents.

PO

Intermittent remittances by companies pending winding-up permitted s.t. satisfaction of AD Category 1 bank.

LO

Generally for 3 years

*except in the case of NBFCs and those entities engaged in the construction and development sectors, for whom the validity period is two years only

BO

Nil

PO

As per the tenure of the project

  1. Check availability of name / registered trademark for incorporation of the company. Further to this, reserve name of the proposed company through online service RUN on MCA website. The name can also be applied through SPICe.
  2. Obtain Digital Signature Certificate (DSC) for at least one proposed designated Directors of the Company. DIN for proposed Directors can only be applied for through form SPICe.
  3. Form INC 32 (SPICe) are to be duly filled and submitted to RoC for incorporation of the company. PAN and TAN are shall be auto-generated based on details filed in the SPICe form
  4. Filing of electronic Memorandum of Association (eMoA - INC 33) in SPICe . For foreign subscribers physical MoA to be executed and attached
  5. Filing of electronic Articles of Association (eAoA- INC 34) in SPICe . For foreign subscribers physical AoA to be executed and attached
  6. SPICe upload and fee payment is confirmed by MCA
  7. Central Registration Centre (CRC) verifies/ scrutinizes all the documents and forms and may suggest few changes to be made in the attachments or form itself. One needs to make necessary changes accordingly
  8. Obtain the certificate of incorporation (CoI). CIN, PAN & TAN numbers are allotted at the time of registration
  9. A company having share capital is required to file a declaration of receipt of subscription amount and verification of registered office within 182 days of incorporation and prior to commencement of business.
  1. Obtain class 2 or class 3 Digital Signature Certificate (DSC) for designated partners of LLP
  2. For a quick search on already existing names of LLP a facility is provided by MCA to check list of similar/closely resembling names of existing companies/LLPs. Trademark is also to be checked
  3. Filing the proposed name of LLP for approval from the Registrar of Companies through RUN – LLP and can also be done through FiLLiP
  4. FiLLiP is to be duly filled and submitted to RoC for incorporation of LLP. For Foreign LLP (FLLP) Form 27 is to be filed in and digitally signed by FLLP (DPIN must be obtained through FiLLiP.
  5. Form 3 (Information with regard to LLP agreement and changes, if any made therein) to be filled within 30days of incorporation of LLP.

Apply for state government incentives/ customized package scheme for Mega projects as per state policies (Optional)

All industrial undertakings exempt from the requirements of industrial licensing, including existing units undertaking substantial expansion, are required to file information in the prescribed form for Industrial Entrepreneurs Memorandum (IEM), i.e. “Form IEM”, with the Secretariat of Industrial Assistance (SIA), Department for Promotion of Industry and Internal Trade (DPIIT), Government of India, and obtain an acknowledgement. No further approval is required.

Optional for all Micro and small enterprises; Service sector medium enterprises; mandatory for manufacturing sector medium enterprises.

E-biz - Link

Rule

MSME Registration is an optional registration under the MSMED Act that provides Micro, Small and Medium sized enterprises with a host of benefits and access to subsidies and schemes.

MSME criteria

Industries are categorized into manufacturing & service enterprises:

Guidelines:

MSME can be registered by filling Udyog Aadhaar Memorandum. It is a 12 digit Aadhaar number allotted to MSME by DIC

The Udyog Aadhaar Registration can be done online by individuals themselves in case they have an Aadhaar number. However, in all exceptional cases, including those of not having Aadhaar number, can still file Udyog Aadhaar Memorandum, in offline mode(i.e. on paper form), with the General Manager (GM) of the concerned District Industries Centre (DIC). Articles not covered under the MSMED Act 2006 for registration of Udyog Aadhaar Memorandum are listed in the link.

A unit can apply for PRC for any item that does not require industrial license which means items listed in Schedule-III and items not listed in Schedule-I or Schedule-II of the licencing Exemption Notification. Units employing less than 50/100 workers with/without power can apply for registration even for those items included in Schedule-II. Once the unit commences production, it has to apply for permanent registration on the prescribed form.

For starting a manufacturing unit in any state, the first step for the company is to register themselves as MSME or Mega or Large Projects. The criteria to categorize a unit into MSME or Mega Project or Ultra Mega Project is defined the in respective industrial policies of states. This would benefit the units to apply for various incentives available under state government Policies/ Scheme in addition to other specific policies.

Application to State Pollution Control Boards for Collection/ Reception/ Treatment/ Transport/ Storage and Disposal of Hazardous waste.

A completion certification (CC) is a critical and mandatory legal document that a builder should obtain from Application to Town and Country Planning , or Local municipality , development authority or agricultural department or other local bodies such as Nagar Nigam or Gram Panchayat as applicable) with plan, scrutiny fees and land allotment copy.

After the completion of a project, the local authority inspects and evaluates the premise against the approved building plan and awards the completion certificate, if all the rules are satisfied.

The application for registration is to be filed with the Superintendent of Central Excise having jurisdiction over the premises in respect whereof the registration is to be obtained.

Note – Applicability of Excise is for liquor and petroleum based units.

Consent to operate is obtained from Pollution control board of the respective states. It is required in both pre-commissioning stage. It is subject to renewal from time to time.

Special Valuation Branch (“SVB”) is a branch of the Custom House that specializes in investigating the transactions involving relationship between the supplier and the importer. The detailed working and functions of the branch can be accessed at link.

Employees' State Insurance Corporation (ESIC) provides monetary and medical benefits to Employees in case of sickness, maternity and employment injury and to make provisions for related matters.

Form 01 should be used by employers to register with ESIC.

The Employees' Provident Fund Organization (EPFO) provides social security benefits to Employees of establishments on which the Employees’ Provident Fund and Miscellaneous Provisions Act 1952.

Online registration for EPFO can be done through link.

Final Fire approval needs to be taken by local state authority.

Any business whose turnover exceeds the threshold limit of INR 20 lakhs (INR 10 lakhs for North Eastern and hill states) will have to register under GST. Businesses registered under any of the pre-GST laws: VAT, Excise/Service Tax have to register under GST by default.

Any business can get registered under GST by applying via the GST Online Portal or at GST Seva Kendra set up by the Government of India. Fill Form-part A (PAN, Mobile and email id. The portal verifies your detail via OTP. Upload the document as per business type. Fill Form-part B using the received number through OTP. Application reference number shall be received via mobile/ email. The GST officer verifies your application/ document. In case more information/ documents are asked through Form GST-REG-03 details have to be shared through Form GST-REG-04 within 7 working days. GST officer approves application and GSTIN within 7 working days.

Import Export (IE) Code is a registration required for persons importing or exporting goods and services from India. IE Code is issued by the Directorate General of Foreign Trade (DGFT), Ministry of Commerce and Industries, Government of India. IE Codes when issued can be used by the entity throughout its existence and doesn't require any renewal or filing.

IE Code application must be made to the Directorate General of Foreign Trade along with the necessary supporting documents.

Application to State Electricity Distribution Company for sanction of power supply for low tension (LT), high tension (HT), or Extra High Tension connection as applicable.

According to section 5 of the Profession Tax Act, every employer (not being an officer of the government is liable to pay tax and shall obtain a certificate of registration from the prescribed authority.

The company is required to apply in Form I to the registering authority.

Registration under Shop & Establishment is provided by state government.

Trademark registration provides legal right of exclusivity for the use of mark to the owner of the mark. Trademark registration involves multiple steps. A step by step guide for registration of trademark is detailed at link.

State Industrial Development Corporations for approval for water connections; to State Industrial Promotion Boards (where applicable) where source of water is river/ canal/ dam; and to Central Ground Water Commission in case of ground water extraction.

Application to respective State DI/ State Industrial Development Corporation (SIDC)/ Infrastructure Corporation/ Small Scale Industrial Development Corporation (SSIDC)

Lift and escalator approval needs to be obtained from local state authority.

Approval is given for installation and operation is accorded separately.

An approval from development authority/ local nodal authority for sanction of building plans/ building permit under the provisions of Building Byelaws, Master plan and Local Body Acts. The Building approval comprises of the building plan and the layout approval for the construction of the building. The applicant has to get approval of layout plan from concerned authorities before starting construction of. Intimation of Disapproval or IOD basically states conditions that needs to be complied with during different phases of Under Construction Project. Post this the applicant received commence certificate to commence construction.

Consent to establish is required from Environment and pollution control board for starting the building construction activity of the unit. An application is to be made to concerned bodies at the state pollution board and central level for environment clearance.

Application for environment clearance (EC) needs to be made at the online platform by MoEF.

Proposals requiring EC clearance under EIA notification 2006. Proposals requiring only CRZ Clearance under CRZ Notification 2014. Proposals requiring both clearances i.e. EC clearance (Category A and Category B both) under EIA notification 2006 and CRZ Clearance under CRZ notification 2011

Environment Clearance is a two-stage process. Stage 1 - Grant of ToR (If, after accepting category A or category B proposals, Ministry/ SEIAA do not take any decision within one month, then, Standard TOR is accorded automatically to the proposal. Stage 2- Grant EC - TOR accorded proposals, Proposals without TOR

Under the Factory Act, 1948 approval for Factory Layout Plan is required. It is usually granted by the Labour’s Department of each state however the competent authority may vary from state to state.

The approval is granted within 60 days for chemical factory and 45 days for other factories subject to the specific criteria met by the competent authority of the state

The layout plan approved is non – transferrable.

Licensing is done under Industries (Development & Regulation) Act 1951. only five industries are under compulsory licensing:

Electronic aerospace and defence equipment Industrial explosives including detonating fuses, safety fuses, gun powder, nitrocellulose and matches. Cigars and cigarettes of tobacco and manufactured tobacco substitutes. Specified hazardous chemicals i.e. (i) hydrocyanic acid and its derivatives (ii) Phosgene and its derivatives and (iii) Isocyanates & disocyanates of hydrocarbon not elsewhere specified (example methyl Isocyanates). Distillation and brewing of alcoholic drinks. Industrial undertakings through online application Form IL. Else IEM has to be availed The step by step guide for availing IEM illustrated at the link

Industrial licenses are regulated by the IDRA, 1951 Act, and are approved by the Secretarial of Industrial Assistance (SIA) on the recommendation of the licensing committee.

Businesses planning to establish industries to produce any of the following items in India must obtain a compulsory license:

Distillation and brewing of alcoholic drinks;

Cigars and cigarettes of tobacco and manufactured tobacco substitutes;
Electronics and aerospace and defence equipment;
Industrial explosives including detonating fuses, safety fuses, gun powder, nitrocellulose and matches; and
Hazardous chemicals including items hazardous to human safety and health and thus fall for mandatory licensing.
Form IL

Applicable in case industry located outside an industrial area

Concerned departments:

State Directorate of Industries (DI)
Department of Town and Country Planning
Local authority/ District Collector

Application to State Pollution Boards before commencement of construction activities and production activities under Water Act and Air Act for Consent to Establish and CTO respectively is to be made

There are 4 categories of industries-

Red – Industries having pollution index score of 60 and above
Orange- Industries having pollution index score of 41 to 59
Green - Industries having pollution index score of 21 to 40
White- Industries having pollution index score up to 20
Note- The approval is granted by state and compliance procedure may vary from state to state

Application to State Electricity Distribution Company for sanction of power supply for low tension (LT), high tension (HT), or Extra High Tension connection as applicable during the construction phase.

Provisional Fire Safety Approval from State Fire and Safety department.

As per the Boiler Act 1923, registration of Boiler is mandatory compliance. Permission for registration is granted post successful inspection.

Provisional registration is granted by the competent authority for the period of 6 months, within which the final inspection (upon request) is undertaken.

For further details and form link to be referred.

Under the Building and other Construction Workers Act, 1996 approval required during pre and post commissioning stage. It is usually granted by the Labour’s Department of each state however the competent authority may vary from state to state .

The approval is granted within 30 days subject to the specific criteria met by the competent authority of the state.

Under the Contract Labour (Regulation and Abolition) Act, 1970 approval required. It is usually granted by the Labour’s Department of each state however the competent authority may vary from state to state.

The approval is granted within 30 days subject to the specific criteria met by the competent authority of the state.

Why India

Food processing is one of the six (6) focus sectors under the Government of India’s Make in India initiative is central to achieving the aim of doubling the farmers’ income.

The huge domestic market of 1.3 billion customers with the youngest population globally, an abundant agricultural base and a large opportunity across the value chain from Farm to Fork make India an ideal destination for investment in Food Processing Sector. Forging partnerships for growth of Food Processing Sector in the leading food processing destination of the World- India.

Advantage India
  • 3rd largest economy of the world in terms of GDP (PPP) – USD 9.6 Trillion (2017)
  • Huge domestic markets with 1.3 billion consumers
  • Poised to become 3rd largest consumer markets in the world ~ $6 trillion by 2030 (Source WEF)
  • Among the fastest growing major economies – estimated to grow at 7% for FY 2020 (Economic survey 2019)
  • Connected to the World
  • No.1 Destination for Greenfield FDI globally
  • Ranked 1 in Global Retail Development Index 2017 (AT Kearney)
  • Ranked 77- in ‘World Bank’s Ease of Doing Business Ranking in 2018-Highest Jump of 65 ranks from 142 (2014) to 77 (2018) in world
Food processing sector at a glance
  • Expected market size- USD 482 billion by 2020
  • 6th Largest food & grocery market of the world
  • Growing at 13% (last 5 years)- double the global rate, higher than the globe in all 6 segments- consumer foods, beverages, dairy, fruits & vegetables, Marine products, Meat & poultry
  • 8% share in India’s Manufacturing (in terms of GVA)
  • Ranked 2nd in terms of total food production globally
  • Leader in production of several agri-commodities
  • 13th largest recipient of FDI - $3.28 billion of FDI equity inflows from April 2014 to March 2019
  • Strong government support- under the flagship scheme of PMKSY,
  • 42 Mega food parks and 299 cold chains approved
Food processing sector at a glance
  • 100% FDI in Food Processing
  • 100% FDI in Retail Trading, including through e-commerce (produced & manufactured in India)
  • 100% income tax exemption on profits and gains derived for the first 5 years of operations
  • Concessional import duty for plant and machinery under project import
  • Import duty exemption for raw material import under advanced authorisation scheme
  • Priority sector lending allowed for agro processing & cold chain infrastructure
  • Special Food Processing Fund of Rs. 2,000 Crores created with NABARD for affordable credit facility to Designated Food parks and units set up thereon
  • Simplified tax structure- through introduction of Uniform Goods & Services Tax across India
  • Nivesh Bandhu- a one stop investor Portal and Single window facilitation cell
  • Dedicated investor facilitation desk at Invest India- National Investment Promotion Agency

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