cold storage

Cold Storage

CoThe Indian Government has undertaken several measures to boost and grow the cold storage and warehousing industry in India. This has been done through the implementation of several carefully designed schemes aimed at aiding this industry with all the requirements needed for their further development, ease of doing business, attracting foreign investors and thereby growing its market share in the economy. 

Several tax exemptions and subsidies have  provided to ensure that this industry grows at as fast a rate as those seen in other countries. These exemptions and benefits include the National Horticulture Board (NHB), National Horticulture Mission (NHM), Agricultural and Processed Food Products Export Development Authority (APEDA), 

Ministry of Food Processing Industry (MoFPI), Mission for Integrated Development of Horticulture (MIDH) along with the absolutely and complete cooperation of the and Department of Agriculture and Cooperation which works alongside to grow and boost the cold storage industry in India.

Ministry of Food Processing Industry (MoFPI)


The objective of the scheme is to provide integrate cold chain, preservation and value addition infrastructure facilities without any break, from the farm gate to the consumer in order to reduce post-harvest losses of horticulture and non-horticulture agri-produce

Eligible organizations/entities: –

Integrated cold chain and value addition infrastructure projects can  set up by Partnership/ Proprietorship Firms, Companies, Corporations, Cooperatives, Self Help Groups (SHGs), Farmer Producer Organizations (FPOs), NGOs, Central/State PSUs, etc. with business interest in cold chain solutions and also by those who manage supply chain.

Pattern of assistance: –

The scheme will have two types of pattern of financial assistance: –

(a) For storage infrastructure including Pack House and Pre cooling unit, ripening chamber and transport infrastructure, grant-in-aid @ 35% for General Areas and @ 50% for North East States, Himalayan States, Islands & ITDP Areas, of the total cost of plant & machinery and technical civil works will be provide

(b) For value addition and processing infrastructure including frozen storage/ deep freezers associated and integral to the processing, grant-in-aid @ 50% for General Areas and @ 75% for North East States, Himalayan States, Islands & ITDP Areas, will be provide

 (c) For irradiation facilities grant-in-aid will  provid @ 50% for General Areas and @ 75% for North East States, Himalayan States, Islands & ITDP Areas.

Maximum grant-in-aid would be Rs. 10 crore per project.

National Horticulture Board (NHB)

2. Capital Investment subsidy scheme for construction/expansion/ modernization of cold storage and storages for Horticulture Produce.

Assistance for setting up of new Cold Storage infrastructure will be available only to Multi-Chamber cold Storage units with technologies which are energy efficient with provision of thermal insulation, humidity controlled, advance cooling systems, automation, etc, having specification and standards approved by the Ministry. To ensure, compliance of notified standards, all projects will  subjected to technical scrutiny by NHB empaneled Technical appraisal agency.

 In case of CA Stores, projects of temperate fruit crops locate in production areas for which to NHB protocols are available, are only are allow

Capacity and Pattern of Assistance: – The assistance will  given as subsidy @ 35% of the capital cost of project in general areas and 50% in case of NE, Hilly States & Scheduled Areas for a storage capacity above 5000 MT up to 10000 MT

National Horticulture Mission (NHM)

All cold storage units which come under the category of long term storage and distribution hubs up to 5000 MT capacity are eligible for availing off assistance under the open-end scheme of NHM/HMNEH, which again is a sub scheme of MIDH.

Such assistance is extended as a subsidy to the credit linked projects at 35% of the capital cost of the project in General Areas and 50% in case of North-Eastern, Hilly and Scheduled Areas, as provided under the operational guidelines under the MIDH project.

Agricultural and Processed Food Products Export Development Authority (APEDA)

In India, the establishment of all cold chain industries is assisted by APEDA as a part of its strategy to develop industries related to scheduled products everywhere. Certain further monetary benefits available through APEDA have given below:

a) Exemption on Custom Duty

Every project of cold storages, cold room which includes the farm level pre-cooling along with all industrial projects for preservation, storage or processing of agriculture, apiary, horticultural, dairy poultry, aquatic and marine produce and meat have  grant an import status with a mere concessional basic custom duty (BCD) of 5%.

Furthermore, the truck refrigeration units and refrigeration motor vehicles have been fully exempted from BCD altogether.

Foreign Direct Investment (FDI) In Cold Chain

 The Indian Government has now permitted 100% FDI within the cold chain sector in order to witness the much need boom of this industry on a global scale and in order to facilitate the growth of the cold chain infrastructure wholly and completely without any hindrances of for foreign investment. Under the current FDI policy, a minimum investment of US$100 is mandatory with at least 50% investment in back-ended infrastructure for the same.

Moreover, as per the Department of Industrial Policy & Promotion, the exact figure for FDI in only cold chain is still not however, the total FDI in food processing industries including the cold chain industry was Rs. 45,130.73 crores as on March 2017, so a nearby deduction as the same can  made.

    Fiscal Incentives for Cold Chain

   The Income Tax Act, under section 80-IB provides some deductions in respect of all the profits earned from industrial undertakings relate to the cold chain sector. For the first 5 years, these deductions stood at a 100% and then 25/30% for the next five years. The subsequent fiscal benefits made available for this industry can  explained below:

  • The Income Tax Act, 1961, under section 35-AD, has given a deduction at 150% made available for all expenditures incurr on capital investments in order to establish a cold chain facility in India.
  • All cold chain projects are eligible for External Commercial Borrowings now.
  • The concessional rate of customs duty is levied at 5% on import equipment for cold chain facilities under the project import benefits.