Petroleum based plastics currently leads the food packaging industry due to its low cost, easy processibility, and lightweight. However, they are non-biodegradable, obtained from non-renewable resources and generates high amount of greenhouse gases during their production. If not properly recycled, these plastics will end up in landfill or oceans and caused the formation of microplastics, a potential toxic material for animals and human beings. Therefore, there is a need for biodegradable plastics from renewable sources as an alternative to oil-based conventional plastic. It is emphasized that fully green polylactic acid (PLA) is a feasible substitute for traditional plastics used in food packaging. However, the limiting aspects of PLA in food packaging industry include its brittleness, poor heat resistance, poor oxygen and water vapor barrier properties, and limited availability of suitable recyclable plant facilities. Incorporating nanofillers, nucleating agents, blending with thermally stable polymers, annealing, and chemical crosslinking will enhance thermo-mechanical, antimicrobial, antioxidant, and barrier properties, making this biopolymer competitive with traditional plastics. This manuscript will give a clear understanding of the processing of PLA, its properties, drawbacks, and solutions to overcome the problems for any real-world applications in food packaging.