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Cold Chain Grid in India

D&B Tangram Advisory Services

2016

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COLD CHAIN GRID IN INDIA

India is the largest producer of milk and second largest producer of fruits and

vegetables in the world, after China. Among fruits, the country is the largest producer

of banana, papaya and mango in the world, while among vegetables, it has the largest

production base for okra and ginger.1 India is also a major producer of meat and

poultry products.2 Despite the large production base, much of the produce is wasted

in the supply chain. Estimates show that inefficient handling, transportation and

storage methods lead to wastage of up to 18 per cent of the fruits and vegetables, 0.8

per cent of milk, 3.7 per cent of poultry and 2.3 per cent of meat produced.3 Several

reports have pointed out that a lot of the wastages are due to the inadequate cold chain

infrastructure in the country [for example, see National Centre for Cold Chain

Development (NCCD) and National Bank for Agriculture and Rural Development

(NABARD) Consultancy Service (NABCONS), 2015].

Cold chain is a temperature controlled logistics system that provides a series of

facilities to maintain ideal storage conditions for perishables from point of origin to

point of consumption in the food supply chain (Planning Commission, 2012). It is

aimed at increasing the shelf life of the perishables (for example, fresh fruits and

vegetables, milk, meat and poultry), thereby reducing wastages and preserving the

quality of a product.

The cold chain constitutes several components including pack-houses, cold storage

facilities, reefer vehicles and temperature controlled chambers, among others. For a

smooth functioning, it is important that the different components of cold chain are

well-integrated forming a cold chain network. In other words, there is a need for a

cold chain grid in the country.

Globally, there is no formal definition of a cold chain grid. It may be described as an

interconnected network of cold chain infrastructure from farm-to-fork. Generally,

companies have their own end-to-end cold chain infrastructure—for instance,

Kelvin Cold Chain Logistics Private Limited provides end-to-end integrated cold

chain services. There are other companies, which specialise on a particular component

of cold chain. For example, Carrier Transicold has refrigerated units and vehicles.

In India, most of the companies in the cold chain sector are small and they have less

than five cold storages or refrigerated vehicles. In most cases, the private players are

the ones that develop cold chain infrastructure while the role of the government is

largely to identify the gaps in the cold chain infrastructure. Further to this, the

government provides incentives and launches schemes to encourage and support the

private players to invest in the infrastructure. In India, one of the biggest issues is the

presence of a large number of unorganised players in the cold chain sector. This leads

1 Agricultural & Processed Food Products Export Development Authority (APEDA), Ministry of

Commerce and Industry, Government of India. 2 Ministry of Food Processing Industries (MoFPI) (2014–15); p.8. Available at:

http://www.mofpi.nic.in/H_Dwld.aspx?KYEwmOL+HGpoo8DlNeKVV3fE4aW5+awTGdnZC9kP6Bj

7+tZmOXaEjQ== [Accessed 9 January 2016]. 3 Central Institute of Post-Harvest Engineering and Technology (CIPHET) (2013). Available at:

http://ciphet.in/upload/file/Vision_2050%20revised%20on_6-7_13.pdf [Accessed 30 December 2015].

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to fragmentation in the cold chain infrastructure and reduces efficiency. It also leads

to demand–supply gaps and sporadic development of infrastructure.

Realising the need to have an integrated cold chain infrastructure in India, in May

2007, a Task Force on cold chain development in India was set up by the Ministry of

Agriculture with members drawn from various stakeholders such as the Central and

State governments, National Horticulture Board (NHB), State Agriculture

Universities and Confederation of Indian Industry (CII). The purpose of this Task

Force was to encourage and ensure participation of stakeholders in developing the

cold chain and monitor the programme execution within the stipulated timeframe.

One of the recommendations of the Task Force was to establish the National Centre

for Cold Chain Development (NCCD) as an autonomous centre for excellence to

work in close collaboration with industry and other stakeholders to promote and

develop integrated cold chain in India for perishable fruits and vegetables and other

perishable allied agricultural commodities. NCCD has initiated work on this area. The

Task Force also recommended the creation of the National Green Grid, climate

controlled transportation network and subsidy provisions for infrastructure projects.4

Details on the National Green Grid are provided in Box 1.

4 Planning Commission (2012). ‘Report of the Committee on Encouraging Investments in Supply Chains Including Provision for Cold Storages for More Efficient Distribution of Farm Produce’. Development Policy Division Planning Commission Government of India. Available at: http://planningcommission.gov.in/reports/genrep/rep_supply1312.pdf [Accessed 22 January 2016].

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Box 1: The National Green Grid

The idea behind the National Green Grid was to “develop a seamless end-to-end transport

network to balance demand–supply issues pertaining to food logistics and enable the

producers to fetch a proper remunerative price while ensuring the qualitative availability of

such perishable produce for longer duration and thereby facilitating price stability”

(Ministry of Agriculture, the Government of India, 2008). The Grid would facilitate

transportation of fresh perishable agricultural produce, including fresh fruits and

vegetables, aquatic products, animal protein, eggs and milk products. It is proposed to be

developed on the concept of multi-modal transport using a mix of road-rail-road mode to

start with. This could also be extended to the use of road-sea/waterways-road in the case of

domestic market or road-rail-sea-airport for overseas market for export purposes. The

proposed National Green Grid can be established in a phased manner with due linkages

along the major freight corridors—both road and rail.

In Phase I, the grid is proposed to be established along the Golden Quadrilateral Network

and the major trunk railway lines connecting Jammu &Kashmir (Jammu), Himachal

Pradesh (Kalka), Kerala (Thiruvananthapuram), North-East (Guwahati) and Uttarakhand.

This would also involve creation of the Mega Perishable Centres at Delhi, Mumbai,

Kolkata, Bangalore, Nagpur, Guwahati, Jammu and Kalka. Long distance movement along

the National Green Grid is envisaged to be undertaken mainly through existing and

proposed rail networks as the railways are a cheaper mode of inland transportation.

Phase II will witness the development of regional green grids having inter- and intra-state

linkages along the state highways, other freight and rail corridors. The Perishable Cargo

Centres will also be created along the major production, consumption and export centres.

The indicative locations have been worked out state-wise to link the major fruits and

vegetable clusters to consumption centres for the same which will be integrated with the

existing perishable cargo centres. Hence, the Mega Perishable Centres will be linked to the

Perishable Cargo Centers, which will facilitate the hub-and-spoke model of development

for reefer transportation. A reefer container bank through regional hubs will ensure the

availability of refrigerated containers in requisite numbers.

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Potato

26%

Tomato

12%

Onion

11% Brinjal

8%

Cabbage

6%

Cauliflower

5%

Tapioca

5%

Okra

4%

Peas

2%

Sweet

Potato

1% Others

20% Banana

33%

Mango

21%

Citrus

13%

Papaya

6%

Guava

4%

Apple

3%

Pineapple

3%

Sapota

2% Grapes

2%

Pomegranat

e

1% Litchi

1%

Others

11%

More recently,5 the government has pointed out that in order to develop a grid, there

is also a need to create a food map to identify the states with surplus and those with

deficit thereby connecting the two through a seamless infrastructure.

Given this background, this report lays out the process for designing a cold chain

grid. Cold chain grid requires information about production hubs, processing units,

consumption hubs, and existing and projected cold chain infrastructure, among others.

This information is presented in the report taking the example of fruits and vegetables

(both fresh and processed), which require cold chains.

The report identifies the supply and demand gaps in cold chain grid, which will

enable the private players to make their investment decisions. Cold chain is identified

as a priority sector for investment in India and 100 per cent FDI is allowed in cold

chain infrastructure. It is expected that this report will help foreign investors to make

their investment decision in the cold chain sector in India.

Production Centres in India

As mentioned earlier, India is the largest producer of many fruits and vegetables in

the world. During 2013–14, India produced 88.98 million metric tonnes of fruits and

162.89 million metric tonnes of vegetables.6 Production statistics for fruits and

vegetables by different states are provided by the NHB. According to the data

released by NHB, the major fruits and vegetables produced in India include banana,

mango, potato and tomato, among others (see Figure 1).

Figure 1: Production share of major fruits and vegetables in India (2013–14)7

Source: Compiled from NHB (2014). p.4. Available at: http://www.nhb.gov.in/area-

pro/NHB_Database_2015.pdf [Accessed 22 December 2015].

5 See http://retail.economictimes.indiatimes.com/news/food-entertainment/grocery/govt-plans-national-

food-grid-to-rein-in-prices/38462474 [Accessed 12 January 2016]. 6 National Board of Horticulture (2014). Available at: http://www.nhb.gov.in/area-

pro/NHB_Database_2015.pdf [Accessed 30 November 2015]. 7 2013-14 refers to the Indian Financial Year from 1 April 2013 till 31 March 2014.

Fruits Vegetables

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In terms of state-wise production, more than 50 per cent of India’s production of fruits

and vegetables is concentrated in five or six major Indian states. For instance, in

2013–14, Maharashtra (15 per cent), Andhra Pradesh (12 per cent), Gujarat (9 per

cent), Tamil Nadu (8 per cent) and Uttar Pradesh (8 per cent) were the major

producers of fruits. In the same year, West Bengal (14 per cent), Uttar Pradesh (12 per

cent), Bihar (9 per cent), Madhya Pradesh (8 per cent) and Gujarat (7 per cent) were

the major producers of vegetables.8 The state-wise details of fruits and vegetable

production are given in Table 1.

Table 1: Fruits and vegetables area and production across states (2013–14)

States Fruits Vegetables

Area (‘000

HA)

Production

(‘000 MT)

Area (‘000

HA)

Production

(‘000 MT)

Andaman

Nicobar

3.55 29.73 6.89 51.79

Andhra Pradesh 640.05 10510.56 439.64 8149.76

Arunachal

Pradesh

89.09 321.26 1.40 35.00

Assam 144.68 2007.80 281.40 3031.90

Bihar 302.07 4013.58 809.80 15097.77

Chhattisgarh 212.89 1930.18 403.43 5465.92

Dadra and Nagar

Haveli

0.00 0.00 1.10 5.50

Daman & Diu 0.00 0.00 0.00 0.00

Delhi 0.00 0.00 27.30 436.95

Goa 11.28 81.19 7.00 79.92

Gujarat 370.76 8001.96 582.28 11571.24

Haryana 50.59 554.90 373.17 5565.90

Himachal

Pradesh

220.71 866.34 86.60 1635.88

Jammu &

Kashmir

355.21 2073.94 63.06 1395.47

Jharkhand 94.03 890.04 313.61 4238.13

Karnataka 396.00 6652.42 418.69 7500.69

Kerala 376.95 2889.50 147.69 3572.67

Lakshadweep 0.22 0.48 0.25 0.33

Madhya Pradesh 203.79 5696.00 628.72 13019.31

Maharashtra 1565.00 13457.92 726.00 10161.83

Manipur 54.05 515.69 25.19 271.04

Meghalaya 35.30 348.00 43.60 515.34

Mizoram 57.55 343.90 41.10 254.14

Nagaland 40.56 411.00 38.55 492.37

Odisha 325.86 2148.27 677.33 9433.66

8 Compiled from NHB (2014). p.10. Available at: http://www.nhb.gov.in/area-

pro/NHB_Database_2015.pdf [Accessed 22 December 2015].

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Puducherry 0.64 12.58 0.90 16.26

Punjab 76.59 1541.24 191.02 3936.19

Rajasthan 37.40 581.78 148.88 1114.07

Sikkim 16.02 24.05 26.11 134.53

Tamil Nadu 328.55 7369.86 289.74 8678.82

Telangana 364.48 4440.98 220.94 3647.28

Tripura 68.38 786.35 46.69 780.52

Uttar Pradesh 378.97 6887.45 859.38 18544.96

Uttarakhand 171.62 678.49 88.28 1016.83

West Bengal 223.50 2909.71 1380.30 23044.95

Total 7216.31 88977.13 9396.06 162896.91

Source: Final Area and Production Estimates for Horticulture Crops (2013–14).

Available at

http://nhb.gov.in/PDFViwer.aspx?enc=3ZOO8K5CzcdC/Yq6HcdIxC0U1kZZenFuN

VXacDLxz28= [Accessed 22 December 2015].

As indicated in Table 1, India’s major production centres are concentrated in a few

states. However, consumers are located throughout the country and a large number of

the consumers of fresh fruits and vegetables are in the Indian cities. Therefore, these

cities have a large share in the consumption expenditure in the country (for details see

McKinsey and Company, 2007).

In India, cities are classified in different tiers9 based on the population residing in

those cities. For example, Tier 1 cities include cities like Delhi, Mumbai, Bangalore,

Chennai, Hyderabad and Kolkata while Tier 2 cities include cities such as

Bhubaneswar, Chandigarh, Patna, Srinagar and Nagpur. Hence, it is important for the

fresh and processed production to reach the consumers from the production location

to the consumption location through a cold chain network or grid.

The next section focuses on the spread of the food processing units in India. The fresh

produce has to reach the processing units and the processed goods from these units

have to reach the consumers.

Food Processing Centres in India

In India, 9 per cent of the gross domestic product (GDP) of the manufacturing sector

and 11 per cent of the GDP of the agriculture sector come from the food processing

sector. The food processing sector has been growing at an average annual rate of 8.4

per cent, which is greater than the growth of agriculture and manufacturing sectors.

The Annual Survey of Industries (ASI) conducted by the Ministry of Statistics and

Programme Implementation (MOSPI) provides data on industrial production at the

two digits National Industrial Classification (NIC). Food processing sector is covered

under Division 10 of NIC. Detailed description is given in Box 2.

9 Cities are classified in 6 tiers depending on the population ranging from 100,000 and above to less

than 5000 individuals. Details are accessible at

https://rbidocs.rbi.org.in/rdocs/content/pdfs/100MCA0711_5.pdf [Accessed 14 January 2016].

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There were a total of 37,175 registered food processing units in India in the year

2011–12, out of which 1,110 were engaged in fruits and vegetables production, 1,695

in dairy production and 140 in meat processing and preservation.10

Table 2 provides

the total number of factories in registered food processing units in the Indian states in

the year 2011–12.

Table 2: Total number of factories in registered food processing units across

states (2011–12)

Name of the State/UT Total

Andhra Pradesh11

9,359

Andaman & Nicobar Islands 4

Assam 1,212

Bihar 715

Chandigarh (UT) 23

Chhattisgarh 1,028

Dadra & Nagar Haveli 8

Daman & Diu 35

Delhi 145

Goa 85

Gujarat 1,924

Haryana 650

Himachal Pradesh 171

Jammu & Kashmir 150

Jharkhand 169

Karnataka 1,979

Kerala 1,437

Madhya Pradesh 754

Maharashtra 3,113

Manipur 18

Meghalaya 18

10

ASI (2012–13). Available at:

http://mospi.nic.in/Mospi_New/upload/asi/ASI_main.htm?status=1&menu_id=88. 11

Here Andhra Pradesh refers to the erstwhile Andhra Pradesh prior to the bifurcation of the state into

Andhra Pradesh and Telangana in 2014.

Box 2: Coverage of Food Processing Sector in the National Industrial Classification

Division 10: ‘Manufacture of Food Products’

Group 101 Processing and preserving of meat

Group 102 Processing and preserving of fish, crustaceans and molluscs

Group 103 Processing and preserving of fruit and vegetables

Group 104 Manufacture of vegetable and animal oils and fats

Group 105 Manufacture of dairy products

Group 106 Manufacture of grain mill products, starches and starch products

Group 107 Manufacture of other food products

Group 108 Manufacture of prepared animal feeds

Source: National Industrial Classification (2008)

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Nagaland 12

Odisha 875

Puducherry 70

Punjab 2,784

Rajasthan 777

Sikkim 18

Tamil Nadu 5,186

Tripura 55

Uttar Pradesh 2,116

Uttarakhand 381

West Bengal 1,600

Source: Ministry of Food Processing Industries (MoFPI) (2015). p.15, Section 2.1.

Titled: State-wise estimated Number of Factories in Registered FPI units for 2011–12.

Available at:

http://www.mofpi.nic.in/H_Dwld.aspx?KYEwmOL+HGpoo8DlNeKVV3fE4aW5+a

wTGdnZC9kP6Bj7+tZmOXaEjQ== [Accessed 22 December 2015].

It can be seen from Table 2 that the spread of food processing units is non-uniform

across states. Andhra Pradesh12

, Tamil Nadu, Maharashtra and Punjab have the

largest number of food processing units. As evident from Table 1, these are also the

major fruits and vegetables producing states in the country. It is gathered from

various government sources 13

that the total number of registered food processing

units has increased from 36,881in 2011–12 to 37,175 in 2012–13, marking a growth

rate of 0.80 per cent. Table 3 provides the total output of major states and/or union

territories (UT) in the manufacture of food products in 2012–13.

Table 3: Major state/UT contributing at least 80% in terms of total output in the

manufacture of food products [NIC- 10] - 2012–13

State/ UT Total Output

(Rs. lakh)

% Gross Value

Added

(Rs. lakh)

%

Maharashtra 11250931 16.11 841277 12.68

Uttar Pradesh 7868864 11.27 472233 7.12

Gujarat 7259982 10.40 421806 6.36

Karnataka 5405157 7.74 651899 9.83

Andhra Pradesh 5291583 7.58 453428 6.83

Tamil Nadu 4861035 6.96 594116 8.95

Haryana 3950290 5.66 489117 7.37

Madhya Pradesh 3246223 4.65 340493 5.13

West Bengal 3152090 4.51 264722 3.99

Punjab 2882640 4.13 294962 4.45

Rajasthan 2438628 3.49 150276 2.26

All India 69820782 100.00 6634906 100.00

Total of above State/UTs 57607423 82.50 4974329 74.97

12

Here Andhra Pradesh refers to the erstwhile Andhra Pradesh prior to the bifurcation of the state into

Andhra Pradesh and Telangana in 2014. 13

Available at: http://www.makeinindia.com/sector/food-processing [Accessed 22 December 2015].

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Source: ASI (2012-13), Statement 19. pp.S12-2. Available at:

http://mospi.nic.in/Mospi_New/upload/asi/ASI_main.htm?status=1&menu_id=88

[Accessed 22 December 2015].

Current Cold Chain Infrastructure in India

In India, the cold chain is fragmented and there are several intermediaries involved in

the cold chain. A typical fruits and vegetables cold chain in India for fresh and

processed fruits is illustrated in Figures 2 and 3.

As indicated by Table 1, 2 and 3, the major production, processing and

manufacturing clusters for fruits and vegetable in India are centred around Andhra

Pradesh, Maharashtra, Gujarat, Tamil Nadu and West Bengal. Hence, there is an

opportunity to invest in establishing a cold chain network connecting the

production and processing centres of these states to consumption centres. There are

some states such as Bihar and Madhya Pradesh that are large producers of fruits

and vegetables but do not have a strong manufacturing or processing base. There is

a scope for developing infrastructure in such states for strengthening the

manufacturing base in these states.

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Figure 2: Typical supply chain from farm to consumer for fresh produce

Figure 3: Typical supply chain from farm to processing to consumer

Small & mid-

sized farmers

Large farmers/

Aggregators

Pack

house

Reefer

Truck

Processing

Unit

Cold

Storage

Reefer

Van

Retail

Outlet

Consumer

Small & mid-

sized farmers

Large farmers/

Aggregators

Pack

house

Reefer

Truck

Cold

Storage

Ripening

Chamber

Mandi

Reefer

Van

Retail

Outlet

Consumer

Reefer

Truck

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Statistics on the infrastructure available for the cold chain set up in India is provided

by NCCD. There are several infrastructure components of cold chain as depicted in

Figures 2 and 3 include pack-houses, transport vehicles, storage hubs, among others.

The infrastructure components required by a typical food chain along with their

desirable set-up location and current usage are illustrated in Figure 3.

Figure 3: Infrastructure components required to operate a typical cold chain

supply

Source: Created from NCCD and NABCON (2015). Table 2.1. p.13. Available at:

http://www.nccd.gov.in/PDF/CCSG_Final%20Report_Web.pdf [Accessed 30

December 2015].

The cold chain infrastructure in India as on April, 2014 is given in Table 4. The

figures arrived at mainly consider fruits and vegetables and other products that require

cold storage such as high value dairy products (butter, ice-cream) and dried chillies.

Requirements for milk, floriculture and pharmaceutical ingredients have been ignored

in this study.

Food Processing

Unit (PU) Factory dispatch of

food product as

source point

Cluster parks,

production zones

Long Haul Transport

(T)

From pack-house to

Mandi/wholesale

buyer

Across the country

Cold Storage Hubs

(CH)

Close to

consumption/distribu

tion centre

Across the country

Cold Storage Bulk

(CS)

At farm gate/food

processing premises

At farm gate/food

processing premises

Ripening Chamber

(RC)

Close to

consumption/distribu

tion centre premises

Near to consumption

centre

Last Mile Transport

(t)

Within distribution

city Major cities

Retail/ Front-end

(FE) Last mile merchandising

Front end

Modern Pack-houses

(PH)

At farm gate for

fresh produce

preconditioning

For exporters mostly

Infrastructure

Component

Desirable Set-up

Location

Current Usage

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Table 4: Existing infrastructure – All India (as on April, 2014) – Manufacture of

food products

Infrastructure Component Numbers Capacity (Metric Tonnes)

Modern Pack-house (PH) 249 -

Cold Storage Hubs (CH) 5367 31,823,700

Cold Storage Bulk (CS)

Ripening Chamber (RC) 812 -

Reefer Transport (T)

9,000

54,000 – 135,000

Last Mile Transport (t) < 36,000

Retail/Front-end (FE) 1.968 million outlets -

Note: The enumeration of cold chains in the report has been done only for central

sponsored schemes. Additionally, all calculations are made based on consumption of

the urban population.

Source: NCCD and NABCONS (2015). Table 4.1. p.35. Available at:

http://www.nccd.gov.in/PDF/CCSG_Final%20Report_Web.pdf [Accessed 24

December 2015].

Out of the total 31.82 million metric tonnes of storage capacity created, 10.58 million

tons of storage capacity was created through Central Government Assistance, wherein

the Ministry of Food Processing Industries (MoFPI) created a 0.19 million tonne

capacity, and Mission for Integrated Development of Horticulture, Ministry of

Agriculture (MIDH) comprising National Horticulture Mission (NHM), National

Horticu;lture Board (NHB) and Horticulture Mission for North Eastern and

Himalayan States (HMNEH) created a total of 10.39 million tonne storage capacity.

Disaggregated data on state-wise infrastructure are provided in Table 5.

Table 5: State-wise cold stores created as on April, 2014

State/UTs Number of Cold Storages Size in MT

Andaman & Nicobar (UT) 2 210

Andhra Pradesh14

404 15,77,828

Arunachal Pradesh 2 5,000

Assam 34 1,19,652

Bihar 303 14,06,395

Chandigarh (UT) 6 12,216

Chhattisgarh 89 4,27,766

Delhi 97 1,29,857

Goa 29 7,705

Gujarat 560 20,30,873

Haryana 295 5,88,649

Himachal Pradesh 32 38,557

Jammu and Kashmir 28 64,769

Jharkhand 55 2,17,280

Karnataka 189 5,26,752

14

Here Andhra Pradesh refers to the erstwhile Andhra Pradesh prior to the bifurcation of the state into

Andhra Pradesh and Telangana in 2014.

14

Kerala 197 78,355

Lakshadweep (UT) 1 15

Madhya Pradesh 260 10,97,168

Maharashtra 540 7,06,302.6

Manipur 1 2,175

Meghalaya 4 8,200

Mizoram 3 3,931

Nagaland 2 6,150

Odisha 111 3,26,639

Puducherry (UT) 3 85

Punjab 606 20,04,778

Rajasthan 154 4,80,032

Sikkim 2 2,000

Tamil Nadu 163 2,95,671

Tripura 13 39,181

Uttar Pradesh 2,176 1,36,33,039

Uttarakhand 28 84,545

West Bengal 502 59,01,925

Total 6,891 3,18,23,700.6

Source: NCCD and NABCONS (2015). Annexure VI. p.118. Available at:

http://www.nccd.gov.in/PDF/CCSG_Final%20Report_Web.pdf [Accessed 24

December 2015].

Agricultural and Processed Food Products Export Development Authority (APEDA)

has generated a list of 143 recognised pack-houses for fruits and vegetables in the

country which are mainly used for exports. This leads us to assess the current shortage

and hence identify the areas where cold chain infrastructure is required.

Cold Chain Infrastructure Required

The overall cold chain infrastructure requirement is derived by looking at the

consumption demand. NCCD (2015) has made an assessment, which is presented in

Table 6.

Table 6: Infrastructure Requirement – All India (as on April, 2014)

It can be seen from the above tables that the establishment of cold chain

infrastructure has been non-uniform across the states, with Uttar Pradesh, West

Bengal and Gujarat having the largest storage capacities, while the north-eastern

states of Sikkim, Manipur and Mizoram have the smallest storage capacities.

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Infrastructure Component Numbers Holding Capacity/Storage Size

Pack-house 70,080 11,21,274 MT

Cold Storage (Bulk) - 341,64,411 MT

Cold Storage (Hub) - 9,36,251 MT

Reefer Vehicles 61,826 4,94,608 MT

Ripening Chamber 9,131 91,306 MT

Onion Storage Structure 2,80,241 70,06,028 MT

Source: NCCD (2015). Table 6.6. p.86. Available at:

http://www.nccd.gov.in/PDF/CCSG_Final%20Report_Web.pdf [Accessed 24

December 2015].

The disaggregated state-wise data are presented in Table 7.

Table 7: State-wise cold chain infrastructure requirement

State Pack-

house

(Numbers)

CS Bulk

(Metric

Tonne)

CS Hub

(Metric

Tonne)

Onion

Storage

(Metric

Tonne)

Ripening

Chamber

(Metric

Tonne)

Andhra

Pradesh

3124 489195 41730 551273 4070

Arunachal 60 6705 803 -- 78

Assam 809 61185 10811 -- 1054

Bihar 2205 5094524 29458 155936 2873

Chhattisgarh 1131 498724 15106 -- 1473

Delhi 3003 -- 40122 -- 3913

Goa 170 -- 2271 -- 221

Gujarat 4835 2174886 64590 305066 6299

Haryana 1695 217754 22641 305686 2208

Himachal

Pradesh

122 304511 1636 -- 160

Jammu and

Kashmir

645 899220 8622 -- 841

Jharkhand 1476 5228 19723 -- 1923

Karnataka 4388 151695 58618 809817 5717

Kerala 3361 968 44906 -- 4379

Madhya

Pradesh

3671 1818134 49045 1130550 4783

Maharashtra 9245 34200 123509 3063522 12045

Manipur 160 2925 2137 -- 208

Meghalaya 110 17228 1476 -- 144

Mizoram 106 7508 1412 -- 138

Nagaland 115 7142 1533 -- 149

Odisha 1285 288328 17172 -- 1675

Punjab 1903 1667984 25424 -- 2479

Rajasthan 3146 11370 42025 337343 4098

Sikkim 36 2145 476 -- 46

Tamil Nadu 6410 109005 85635 -- 8351

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Telangana 2171 248130 28999 442517 2828

Tripura 197 5925 2629 -- 256

Uttar Pradesh 8206 10565506 109631 72945 10691

Uttarakhand 578 65208 7723 273893 753

West Bengal 5378 9409081 71848 -- 7007

UT & Others 340 4539 443

All-India

Urban

70080 34164411 936251 7448545 91306

Source: NCCD and NABCONS (2015). Annexure XIV. p.129. Available at:

http://www.nccd.gov.in/PDF/CCSG_Final%20Report_Web.pdf [Accessed 24

December 2015].

Potential Areas for Investment in Cold Chain Grid

The above analysis highlights that the cold chain infrastructure is not uniform across

the country. Existing studies point out that a significant proportion of the perishable

produce transported on a daily basis moves via the non-reefer mode (NCCD 2015).

Globally, cold chain networks are developed by the private investors while the

government acts as a facilitator and may provide certain fiscal and non-fiscal

incentives.

In India, cold chain is a priority sector for the government and several incentives are

offered by the government to attract private and foreign investments (see Table 8).

Analysing areas lacking investment in infrastructure by type and location can provide

an idea of potential areas for private investment in the cold chain grid in India. It is

also important to note that there is a need for private investments in some states such

as Bihar and Madhya Pradesh since these are large production centres and private

investors may look at these states for future investments. The private sector should

examine the project viability and invest in states where infrastructure is poorly

developed.

Table 8: Various government incentives provided for setting up cold stores in the

country

Government Agency Financial Support Provided

National Horticulture Board (NHB) Back-ended subsidy of 40% of the project

cost at the rate of Rs 6000 per Metric

Tonne (MT) for normal cold storages; at

the rate of Rs 7000 and Rs 8000 per MT

for specialised cold storages; and at the

rate of Rs 32,000 per MT for Controlled

Atmosphere storages.

Agricultural & Processed Food

Products Export Development

Authority (APEDA)

100% grant-in-aid for establishment of

common infrastructure facilities.

25% subsidy subject to a ceiling of Rs 10

lakh per beneficiary for setting up

specialised storage facilities such as CA,

deep freezers, etc.

Department of Agriculture and

Cooperation (DAC)

Credit linked back-ended subsidy of 40%

(general states) and 55% (hilly and

17

scheduled states) of capital cost of the

project for a maximum storage capacity of

5000 MT per project at the rate of Rs 6000

per MT.

Rs 32,000 per MT for 5000 MT in case of

CA storages.

National Co-operative Development

Corporation (NCDC)

Subsidy at the rate of 20% and 25% of the

project cost for Under Developed (UD)

and Least Developed (LD) states for

setting up of new cold storages,

CA/Modified Atmosphere (MA) stores,

expansion/modernisation of existing cold

storages with sorting and pre-cooling

facilities.

Source: Extracted from “NCCD Conclave with Nodal Officers for Cold chain

Development”. Available at: http://www.nccd.gov.in/PDF/Mofpi.pdf [Accessed 30

December 2015].

There are areas such as the cold storage facilities wherein the infrastructure is

reaching near saturation; while there are other areas in the cold chain such as pack-

houses, reefer vehicles and refrigeration at last-mile retail outlets such as push-carts,

head loads and street vendors, where infrastructure is far lower than the requirement.

One of the reasons for low investment in segments like the pack-houses is that unless

they are meant for exports, businesses do not find them profitable. Therefore, the

government can encourage investments in these by incentivising the investors through

subsidies and tax exemptions for projects that appear financially non-viable.

Investments should be encouraged to link the production centres with the cold stores

to minimise losses in transit from farm to consumer. This can also be facilitated by

greater linkage between the Mega Perishable Centres and Perishable Cargo Centres to

be developed along the National Green Grid as proposed by the Task Force.

There are certain potential areas for foreign investment. For instance, investors can

start with the economic corridors such as the Delhi-Mumbai Industrial Corridor or the

Amritsar-Delhi-Kolkata Industrial Corridor. Necessary integration of operational and

proposed cold chain systems along the corridors can start by linking roads, railways,

inland waterways (for the domestic market) and the port cities/airports (for export

purposes) can help in integrating the cold chain infrastructure in some parts of the

country. This is on the lines of the suggestions made by the Task Force.

Scope for technical collaboration exists between Indian and foreign companies and

foreign investments in clean and renewable sources of energy for running cold storage

infrastructure, reefer vehicles, etc. Greater fuel efficiency in transportation and use of

solar panels to power cold stores in states such as Rajasthan can be beneficial for

India.

At present, the cold chain infrastructure is fragmented and it is difficult for food

manufacturers and retailers to identify the best and most competitive cold chain

service providers. Most of the service providers rely on captive clients. To make the

industry more competitive and help the small players to link into the cold chain

network, the government can develop a virtual network wherein the government

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through an information technology (IT) based system can provide an availability map

of the present cold chain infrastructure. NCCD is trying to create a database of the

different cold chain service providers across the country. This will help to virtually

integrate the cold chain network and bring together the service providers and the

businesses. This will also facilitate easier tracking of cold chain infrastructure, prices

offered by different players, availability of space, etc. A number of private players are

developing software to track the cold chain infrastructure.

Last but not the least, if the Indian government implements the single goods and

services tax in 2016, the cold chain infrastructure is likely to get integrated with hub-

and-spoke model. This will create new investment opportunities for foreign players in

areas ranging from infrastructure to technology and services.

19

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