The agriculture sector in India has had consistent growth in production levels over time. This production level hasn't been matched appropriately in terms of food storage, which highlights the Indian Agricultural Cold Storage Industry's existing whitespace. Despite being an agricultural nation, India experiences significant food losses per year that range from INR 90,000 to INR 100,000 as a result of inadequate post-harvest management and a lack of adequate cold storage infrastructure.
The government has been developing numerous programs and giving grants to help, along with special preference to the states that are behind in terms of infrastructure, in an effort to foster development in the agricultural cold storage industry. Here is an overview of all those crucial steps taken by the government to level up the agricultural cold storage market in India.
“During COVID-19, while other sectors of economy registered a decline in economic output, agricultural sector noted a ~2.7% Y-o-Y growth.”
1. Minimizing Post Harvest Losses
2. Increased Marketing Avenues and Better Price Discovery
3. Ensuring safety of produce and perseveration of quality
4. Act as an Enabler to Food Processing and Packaging Sector
| Parameter | Description |
|---|---|
| FDI | 100% FDI allowed via automatic route. |
| Infrastructure Status | Since 2011-12, cold chain has been given infrastructure status. |
| Viability Gap Funding | Up to 40% of the project cost. |
| Priority Sector Lending | Classifying loan to food & agro-based processing units and Cold Chain under agriculture activities for Priority Sector Lending. |
| Excise Duty Exemption | Refrigeration machineries and parts used for installation of cold storage, cold room or refrigerated vehicle, exempt from Excise Duty. |
| External Commercial Borrowings | Cold chain projects eligible for External Commercial Borrowings. |
| Special Fund | Setting up of a Special Fund of USD 271 Mn in National Bank for Agriculture and Rural Development (NABARD) to provide affordable credit for designated Food Parks and agro-processing units. |
| Incentives for Creation of Infrastructure | Incentivizing creation of infrastructure, expansion of Processing Capacity and developing technology to convert raw produce into value added products. |
| Target of Formation of 10,000 FPOs by 2028 | In Feb 2020, PM launched the central sector scheme with an objective of creating & promoting 10,000 FPOs with a total budget outlay of INR 6,865 Cr in 9 years. ~2200 CBOs have been allocated for formation of FPOs for FY’21. |
| Lower GST for Raw and Processed Products | Nearly 80% of food products are covered in lower tax slab of 0%, 5% and 12%. |
| Sustainable Development Goal | India aims to end all forms of malnutrition and achieve target of ‘Zero Hunger’ goal by 2030. |
Cold Storage Assistance:
Reefer Vehicles Assistance:
Component Based Assistance:
In-Principal Approval (IPA) is mandatory for the following grants. The grants include only 40% of the project eligible costs.
| Particulars | Scale of Assistance |
|---|---|
| New Cold Storage/expansion of existing cold storage | INR 4,000 per tonne |
| Modernization/rehabilitation of existing cold storage | INR 1,000 per tonne |
| Storage for horticulture produce like onion | INR 2,000 per tonne |
Note: For calculating the subsidy, the capacity of cold storage can be decided by providing a volume of 3.4 cum per tonne or 120 cubic feet per tonne of production.
