Starting a cold press oil or spice mill business in South India? The central government and state governments have put real money behind helping you — in the form of direct subsidies, collateral-free loans, and MSME support. Here is exactly what is available and how to claim it.
Step 0 — Register on Udyam First (Free, 10 Minutes)
Before any scheme, do this: register your business on udyamregistration.gov.in. It is free, takes about 10 minutes, and gives you an MSME certificate that unlocks every central and state government scheme below. You need your Aadhaar and a PAN.
Do this today. Udyam registration is the single action that makes everything else possible. Even if you have not bought a machine yet, register with your intended business activity (food processing / oil milling).
1. PMFME — The Biggest One: 35% Subsidy on Your Machine
PM Formalisation of Micro Food Processing Enterprises (PMFME)
The PMFME scheme is the flagship scheme from the Ministry of Food Processing Industries (MoFPI), Government of India. It gives a credit-linked capital subsidy of 35% of the eligible project cost, up to a maximum of ₹10 lakh per unit. This means if your total setup cost is ₹2.5 lakh, the government effectively contributes ₹87,500 — credited directly to your loan account.
What you need to apply
- Udyam / MSME registration
- FSSAI registration or licence
- Bank account in the name of your business
- A Detailed Project Report (DPR) — your bank or a CA can help prepare this
- The scheme is credit-linked: your bank approves a loan first, then the subsidy is adjusted against the loan
How to apply — Tamil Nadu and Kerala
- Tamil Nadu: Apply through your state MSME portal or the nearest District Industries Centre (DIC). The nodal agency coordinates PMFME applications in TN.
- Kerala: A dedicated portal — pmfmekerala.org — handles all applications, training, and scheme assistance for Kerala food processing units.
PMFME also covers FPOs, SHGs, and cooperatives — if you are part of a women's self-help group, you can apply as a group and access even higher support.
2. Mudra Loan — Zero Collateral Financing
Pradhan Mantri Mudra Yojana (PMMY)
Mudra loans give collateral-free, guarantor-free financing to small business owners through regular banks and regional rural banks. Food processing units — including oil pressing and spice grinding — are explicitly eligible.
For most first-time machine buyers, Kishor (₹50,000–₹5 lakh) or Tarun (₹5–₹10 lakh) are the relevant tiers. Walk into your nearest PSB (SBI, Canara, Indian Bank, etc.) or regional rural bank with your Udyam certificate and a simple business plan. Women entrepreneurs and SC/ST/OBC applicants receive priority processing.
Mudra loans work especially well in combination with PMFME — use the Mudra loan to fund the project, and the PMFME subsidy comes back as a credit against the same loan.
3. State-Level Schemes — Tamil Nadu and Kerala
Tamil Nadu
The Tamil Nadu government offers a 25% capital subsidy on eligible plant and machinery for small and medium agro-based and food processing enterprises. This is separate from and stackable with central schemes like PMFME (subject to guidelines). Apply through your local District Industries Centre (DIC) or online at msmeonline.tn.gov.in.
Kerala
Kerala has a dedicated PMFME implementation body at pmfmekerala.org that offers scheme assistance, capacity building, and application support — all in one place. KSIDC (Kerala State Industrial Development Corporation) also provides industrial land/building support and facilitates additional incentives for food processing investors. For support beyond PMFME, contact your nearest KSIDC district office.
4. SFURTI — For Groups and Cooperatives
The Scheme of Fund for Regeneration of Traditional Industries (SFURTI), run by the Ministry of MSME, supports traditional industry clusters with up to ₹8 crore in funding per cluster. If you are part of an SHG, artisan group, or cooperative involved in food processing (oil, spice, flour), this scheme can fund a Common Facility Centre — shared machinery and infrastructure for the whole group. Contact your state's KVIC office or DIC for cluster formation guidance.
5. PLI — For When You Scale
The Production Linked Incentive (PLI) Scheme for Food Processing run by MoFPI targets large food manufacturers with significant investment commitments. It is not designed for micro or small operators — but it is worth knowing about if you plan to scale your business significantly in the future. Details at mofpi.gov.in.
Your Action List — Do This in Order
- Register on Udyam at udyamregistration.gov.in (free, 10 min)
- Get your FSSAI Basic Registration at foscos.fssai.gov.in (₹100/year)
- Open a current account in your business name at a PSB
- Visit your nearest bank and ask for a Mudra Kishor or Tarun loan
- Prepare a simple DPR and apply for PMFME through your state portal or DIC
- In Tamil Nadu: contact your District Industries Centre for the 25% state capital subsidy
- In Kerala: register at pmfmekerala.org for scheme assistance
| Scheme | What You Get | Max Amount | Apply Via |
|---|---|---|---|
| PMFME | 35% subsidy on machinery | ₹10 lakh | State MSME portal / DIC |
| Mudra (Kishor) | Collateral-free loan | ₹5 lakh | Nearest PSB / RRB |
| Mudra (Tarun) | Collateral-free loan | ₹10 lakh | Nearest PSB / RRB |
| TN Capital Subsidy | 25% subsidy on plant & machinery | Varies | District Industries Centre |
| Kerala PMFME | 35% subsidy + scheme support | ₹10 lakh | pmfmekerala.org |
| SFURTI | Cluster infrastructure funding | ₹8 crore / cluster | KVIC / DIC (groups only) |
Planning to set up a cold press oil or spice mill unit?
Hakura machines qualify for PMFME subsidy. Talk to our team — we can share documentation that helps with your DPR.