iv. Cold Storage
The cold chain infrastructure is a crucial part of agriculture and allied sectors. The produce, particularly fresh produce like fruits and vegetables, is perishable and requires a temperature controlled supply chain involving efficient storage, transportation, and distribution to increase the shelf life of the food grains, fruits, vegetables, livestock products, etc. As per an estimate, the Indian cold chain market size grew to INR 1.8 lakh Cr in 2022, and it is expected that it will reach approximately INR 3.8 lakh Cr by 2028, exhibiting a growth rate (CAGR) of about 12.3% during 2023-2028.
Issues/Challenges in cold chain infrastructure in India
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Under-utilisation |
Presently, there are 8,653 cold stores in the country with a capacity of 394.17 lakh MT, whereas only 60% of this facility is being utilized. |
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Geographical and logistical challenges |
India typically sees temperatures soaring to as high as 45 to 50 degrees Celsius during the summer months. Consequently, many temperature sensitive products transported within the country often arrive damaged or degraded due to insufficient or broken cold chain systems |
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Unawareness |
There is a lack of awareness among farmers, food processors and logistic experts about the benefits of cold storage and cold chain. |
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Expensive |
High cost of building and operating cold storage facilities in India is a barrier for startups to venture into this industry. Fuel costs in India constitute around 45% of operating expenses of cold storage in India, leading to significantly higher costs. Indian cold storage businesses pay approximately Rs 100 plus per cubic feet every month as operating costs. It costs half of that in the West, as fuel costs constitute a mere 10% for them. |
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Support ecosystem lacking |
It includes unavailability of proper equipment, frequent power shortages, inappropriate packaging, vehicle breakdowns and lack of skilled workforce. |
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Fragmented setup |
Cold chain facility is fragmented and virtually non-existent in many states in India. India’s cold storage capacity is unorganized and dominated by traditional cold storage facilities. The distribution of cold storage is highly uneven – only 4 states acquire 60% of the total cold storage – UP, Gujarat, West Bengal and Punjab. |
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Inadequate tech adoption |
While the West has integrated technologies such as Artificial Intelligence, Machine Learning, and Internet of Things among others in their operations, India lags way behind in this aspect. Lack of tech leads to unoptimized and broken cold chains, which create losses for both operators and food manufacturers. |