Starting Cold Chain Facility Business in India and its Benefits

India ranks second in world when it comes to agricultural produce and agriculture employs more than 50% of Indian workforce, but due to lack of proper storage facilities very high part of the yield never reaches consumption level due to post harvest loss . Our Government has been dealing with it by improving the chain and giving various incentives to people who are willing to invest in agriculture and its supply chain related activities. To get more people interested in the business of Cold Chain Facility in India, various schemes and tax incentives have been provided by government and we have tried our best to bring it together here.

Here we have tried to discuss benefits such as financial aids and grants, to know taxation benefits under Income Tax and GST for Cold Chain Facility providers in India pleaser read our other article Tax Benefits for Cold Chain Facility Business.

Financial Assistance/Grant

Ministry of Food Processing Industries has announced a scheme where in a one-time grant is allowed to people constructing and operating a Cold Chain Facility in India to cover cost of plant and machinery installed and technical civil works.

Who are eligible to get financial assistance under this scheme?

Integrated Cold Chain Facilities or related approved projects setup by the following type of entities can avail assistance under the scheme:

  • Proprietory Firms
  • Partnership Firms (Registered/Unregistered)
  • NGOs including Section 8 Companies and Cooperative Societies
  • Companies including One Person Companies, Private Limited and Limited Companies
  • Self Help Groups/Farmer Producer Organisations
  • Public Sector Undertakings

What are the Components of Eligibility?

The scheme provides various required components such as Farm Level Infrastructure along with facilities of Distribution Hub or Refrigerated Vehicles or both has to implemented to make the project eligible. Project Cost for Standalone Irradiation facility is also eligible under the scheme.

What is the amount of grant the scheme provides?

Financial assistance of 50% of the above mentioned expenses or 75% of such expenses if your Cold Chain Facility is located in Himalayan States, North Eastern States or areas and islands notified by Ministry of Tribal Affairs as Integrated Tribal Development Projects (ITDP) areas. Also note that that grant is limited to a maximum of INR 10 Crores per project. In case the applicants holding 100% stake in such entity belong to schedule caste or tribe the benefits shall be extended to 75% of such expenses.

How shall the Grant be provided?

The applicant takes a term loan with the bank and once the application is approved, the grant shall be released in instalments as per the following schedule:

  • First 25% after 25% of owners and 25% of loan amount has been spent on the project,
  • Next 40% after spending 65% of owners contribution and 65% of loan,
  • Next 35% after ensuring that 100% of loan amount and owners contribution has been spent in the project.

If you require any assistance in documentation for loan and availing such subsidy please reach our experts at +91-7008804070