Subsidy in India for Setting Up Cold Chain

The Ministry of Food Processing Industries (MOFPI) in India provides substantial financial assistance for establishing a cold chain. This article provides a comprehensive overview of the scheme offered by MOFPI for setting up cold chains in India.

What is a Cold Chain?

A cold chain consists of cold storage, transport, value-added, and preservation infrastructure, ensuring an integrated cold chain without breaks from the farm gate to the consumer. It encompasses pre-cooling facilities at production sites, reefer vans, and mobile cooling units, as well as value addition centers, including Processing/ Multi-line Processing/ Collection Centers, for horticulture, organic produce, marine, dairy, meat, poultry, etc.

Who Can Set Up a Cold Chain?

Individuals or groups of entrepreneurs interested in cold chain solutions can establish an integrated cold chain and preservation infrastructure. Corporates and industries that manage cold chain supply chains, facilitating the connection of producers to processors and marketers, can also set one up.

Criteria for Obtaining Financial Assistance

To avail of financial assistance under the scheme, the establishment unit must incorporate any two of the following facilities:

Production Facility: Minimal processing center at the farm level, with facilities for weighing, sorting, grading, waxing, packing, pre-cooling, control atmosphere (CA)/modified atmosphere (MA) cold storage, normal storage, and Individual Quick Freezing (IQF).
Transport Facility: Consists of mobile pre-cooling vans and reefer trucks necessary for transporting goods in a temperature-controlled environment.
Distribution Facility: Includes distribution hubs with multi-product and multi-control atmosphere (CA)/modified atmosphere (MA) chambers, cold storage, Variable Humidity Chambers, packing facility, cleaning in process (CIP), fog treatment, individual quick freezing (IQF), and blast freezing.

Amount of Financial Assistance Provided by MOFPI

The Ministry of Food Processing Industries (MOFPI) grants financial assistance (grant-in-aid) covering up to 50% of the total cost of plant and machinery and technical civil works in general areas, and 75% for NE regions including Sikkim and difficult areas like J&K, Himachal Pradesh, and Uttarakhand, up to a maximum of Rs.10 crore. For specific services regarding water testing in Jammu or obtaining a PAN card in Sikkim one can visit IndiaFilings.

Provision of Financial Assistance During Setup

Financial assistance is released in three instalments after the investors/promoters have fulfilled their share of capital, as follows:

1st Installment: 25% of the total grant is released after confirmation that 25% of the promoter's contribution and term loan has been spent.
2nd Installment: 50% of the total grant is released after ensuring that the first installment has been used and 75% of the promoter's contribution and term loan have been spent. A utilization certificate for the first installment must be submitted.
3rd Installment: The remaining 25% of the grant is released upon full utilization of the second installment, ensuring 100% investment by promoters and term loan. The project should be complete, with commercial operation started, and a second installment's utilization certificate is submitted.

Application Procedure for Financial Assistance

The application for financial assistance must be submitted to the Ministry of Food Processing in the prescribed format. Alternatively, contacting an IndiaFilings Business Expert can help with the application process and scheme approval. You might consider looking into establishment alternatives, such as a One Person Company registration in Thiruvananthapuram or possibly LLP registration in Noida.

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Leveraging available resources and understanding business structures is essential when setting up in India. For those interested in exploring the process for proprietorship or understanding the process for removing a director, IndiaFilings provides comprehensive services and guidance.

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Frequently Asked Questions

Common questions about Subsidy for Cold Chain Setup in India.

A cold chain refers to an integrated system of facilities and equipment for maintaining a specific low-temperature range during the transport, storage, and distribution of temperature-sensitive products, such as fresh fruits, vegetables, dairy products, meat, and other perishable goods. It ensures that the products remain fresh and safe for consumption by preventing spoilage and contamination.

Individuals, groups of entrepreneurs, corporations, and industries involved in managing cold chain supply chains can set up an integrated cold chain and preservation infrastructure in India. The applicants should have a business interest in providing cold chain solutions to link producers, processors, and marketers.

To avail financial assistance from the Ministry of Food Processing Industries (MOFPI) in India, the applicant must set up at least two of the following facilities: a production facility (sorting, grading, packing, pre-cooling, etc.), a transport facility (mobile pre-cooling vans, reefer trucks), or a distribution facility (distribution hubs with cold storage, packing, freezing, etc.).

MOFPI provides financial assistance (grant-in-aid) of up to 50% of the total cost of plant, machinery, and technical civil works in general areas, and up to 75% in the North-Eastern region, Sikkim, and difficult areas like Jammu & Kashmir, Himachal Pradesh, and Uttarakhand, subject to a maximum of Rs. 10 crore.

The financial assistance is released in three installments: 25% after spending 25% of the promoter's contribution and 25% of the term loan, 50% after spending 75% of the promoter's contribution and 75% of the term loan, and the remaining 25% after completing the project and commencing commercial operations.

The application for financial assistance should be made in the prescribed format to the Ministry of Food Processing Industries (MOFPI) in India. Alternatively, one can seek assistance from IndiaFilings Business Experts to help with the application process and obtain approval.

A cold chain typically includes pre-cooling facilities at production sites, reefer vans or mobile cooling units for transportation, and value addition centers with facilities for processing, multi-line processing, collection, cold storage, controlled atmosphere storage, and individual quick freezing (IQF) for various products like horticulture, organic produce, marine, dairy, meat, and poultry.

A cold chain is essential for perishable products like fresh fruits, vegetables, dairy, meat, and poultry to maintain their quality, freshness, and safety during transportation, storage, and distribution. It helps prevent spoilage, contamination, and food waste, ensuring that the products reach the consumers in optimal condition.

Setting up a cold chain facility can provide several benefits, including reducing food waste, extending the shelf life of perishable products, improving food safety and quality, facilitating access to domestic and international markets, and generating employment opportunities in the food processing and logistics sectors.

Yes, existing businesses or corporations involved in managing cold chain supply chains and having a business interest in cold chain solutions can apply for financial assistance from MOFPI for setting up an integrated cold chain and preservation infrastructure in India.