How to Start a Cold Storage Business in India
A Complete Guide with Government Schemes & Funding
Learn how to launch a profitable cold storage business in India with step-by-step guidance, government subsidies, and funding options. Discover eligibility, documents, and how Info Tree Services can help you secure grants and loans.
What is a Cold Storage Business?
A cold storage business involves storing perishable goods like fruits, vegetables, dairy, meat, seafood, and pharmaceuticals at controlled temperatures to extend their shelf life. In India, where post-harvest losses account for nearly 30% of agricultural produce, cold storage plays a critical role in reducing waste and ensuring food security. With the government’s push for agri-infrastructure and food processing, starting a cold storage unit is not just profitable but also aligns with national priorities.
Cold storage units can range from small-scale facilities for local farmers to large warehouses serving exporters and food processing companies. The business model typically involves charging storage fees based on the volume and duration of storage. With rising demand for processed foods, e-commerce, and exports, the cold storage sector is projected to grow at a CAGR of 14% by 2026, making it a lucrative opportunity for entrepreneurs and MSMEs.
However, setting up a cold storage business requires significant capital investment in land, machinery, insulation, and technology. This is where government schemes and subsidies come into play. The Indian government, through agencies like the Ministry of Food Processing Industries (MoFPI) and the National Bank for Agriculture and Rural Development (NABARD), offers financial assistance, interest subsidies, and tax benefits to encourage cold storage infrastructure development.
In this guide, we’ll cover everything you need to know about starting a cold storage business in India, including types of facilities, government schemes, eligibility, documents, and how Info Tree Services can help you secure funding and navigate the application process seamlessly.
Why Cold Storage Matters in India
Cold storage is a game-changer for India’s agriculture and food processing sectors, offering economic, social, and environmental benefits.
- Reduces post-harvest losses: India loses ₹92,000 crore annually due to spoilage of perishable goods. Cold storage can save up to 30% of this loss.
- Boosts farmer incomes: Farmers can store produce and sell it at higher prices during off-seasons, increasing their earnings by 20-30%.
- Supports food processing: Cold storage is essential for food processing units, which contribute 13% to India’s GDP and employ over 7 million people.
- Enables exports: India exports ₹1.5 lakh crore worth of perishable goods annually. Cold storage ensures quality and compliance with international standards.
- Creates jobs: The cold storage sector employs over 1 million people directly and indirectly, with potential for more as the industry grows.
- Government incentives: Schemes like the Pradhan Mantri Kisan Sampada Yojana (PMKSY) and NABARD’s Cold Chain Scheme offer subsidies up to 50% of the project cost.
Types of Cold Storage Facilities
Multi-Purpose Cold Storage
These facilities store a variety of perishable goods, including fruits, vegetables, dairy, and meat. They are the most common type of cold storage in India and cater to farmers, traders, and food processing units. Multi-purpose cold storages typically operate at temperatures ranging from -2°C to 10°C, depending on the product. They are ideal for entrepreneurs looking to serve a broad market and maximize utilization of storage space.
Dedicated Cold Storage
Dedicated cold storages are designed for specific products like potatoes, onions, or pharmaceuticals. For example, potato cold storages operate at 2-4°C and are in high demand in states like Uttar Pradesh, West Bengal, and Punjab. These facilities require specialized equipment and temperature control systems, making them more expensive to set up but highly profitable due to consistent demand from specific industries.
Controlled Atmosphere (CA) Storage
CA storages are advanced facilities that control not just temperature but also oxygen, carbon dioxide, and humidity levels. They are used for high-value products like apples, pears, and exotic fruits. CA storages extend the shelf life of produce by up to 6 months, making them ideal for exporters and premium markets. However, they require significant investment in technology and expertise, making them suitable for large-scale operators.
Pre-Cooling Units
Pre-cooling units are small-scale facilities that rapidly cool freshly harvested produce to remove field heat before storage or transport. They are often set up near farms or mandis to reduce spoilage during transit. Pre-cooling units are relatively low-cost and can be a good entry point for entrepreneurs looking to start small before scaling up to larger cold storage facilities.
Top Government Schemes for Cold Storage in 2026
Pradhan Mantri Kisan Sampada Yojana (PMKSY) - Cold Chain Scheme
- •Offers capital subsidy of 35% to 50% of the project cost, up to ₹10 crore for general areas and ₹15 crore for hilly/NER states.
- •Covers cold storage, pre-cooling units, refrigerated transport, and ripening chambers.
- •Eligible applicants: Individuals, farmers, cooperatives, FPOs, and MSMEs.
- •Project cost includes land, civil works, machinery, and insulation. Land cost is excluded from subsidy calculation.
NABARD’s Cold Chain Scheme
- •Provides term loans for cold storage projects with interest subsidies under the Interest Subvention Scheme.
- •Subsidy of 3% on loans up to ₹2 crore for general categories and 5% for women, SC/ST, and NER applicants.
- •Eligible projects include new cold storages, modernization, and expansion of existing facilities.
- •NABARD also offers refinance to banks for cold storage projects, making it easier to secure loans.
Mission for Integrated Development of Horticulture (MIDH)
- •Provides financial assistance for setting up cold storages under the National Horticulture Mission (NHM).
- •Subsidy of 35% to 50% of the project cost, with higher subsidies for hilly and NER states.
- •Focuses on horticulture produce like fruits, vegetables, and flowers.
- •Eligible applicants: Farmers, FPOs, cooperatives, and private entrepreneurs.
Credit Linked Capital Subsidy Scheme (CLCSS) for MSMEs
- •Offers 15% capital subsidy on institutional credit up to ₹1 crore for technology upgradation.
- •Applicable to cold storage units registered as MSMEs.
- •Covers purchase of new machinery, automation, and energy-efficient equipment.
- •Eligible applicants: Existing MSMEs looking to modernize or expand their cold storage facilities.
Eligibility Criteria
Individual / Startup
- •Indian citizen or resident with a valid PAN and Aadhaar card.
- •Minimum 18 years of age and legally competent to enter into contracts.
- •Land ownership or lease agreement for the cold storage site (minimum 5-year lease for leased land).
- •Detailed Project Report (DPR) with financial projections, technical feasibility, and market analysis.
MSME / Organisation
- •Registered as an MSME under the Udyam Registration portal (mandatory for most schemes).
- •Valid GST registration and business PAN card.
- •Land ownership or lease agreement for the project site (minimum 15-year lease for leased land).
- •Audited financial statements for the last 3 years (for existing businesses).
- •No default on any government loan or subsidy scheme.
Documents Required
Standard documents required for cold storage business applications under government schemes:
How Info Tree Services Helps You
Info Tree Services provides end-to-end support for cold storage business applications, from scheme selection to disbursement.
- Scheme mapping: Identify the best government scheme based on your business model, location, and investment capacity.
- DPR preparation: Create a bankable Detailed Project Report (DPR) with technical, financial, and market analysis.
- Documentation support: Assist in gathering and verifying all required documents, including land records, registrations, and financial statements.
- Application filing: Handle the entire application process, including online submissions, bank coordination, and follow-ups with government agencies.
- Post-approval support: Guide you through compliance, subsidy claims, and loan disbursement processes.
Common Myths About Cold Storage Funding
Who Can Apply?
- Individual entrepreneurs with a viable business plan and land for the project.
- Farmers and Farmer Producer Organizations (FPOs) looking to reduce post-harvest losses.
- Cooperatives and self-help groups (SHGs) involved in agriculture or food processing.
- MSMEs registered under Udyam looking to set up or expand cold storage facilities.
- Startups in the agri-tech or food processing sector with innovative cold storage solutions.
- Private companies and partnerships with a focus on cold chain infrastructure.
Complete Documents Checklist for Cold Storage Business
Use this checklist before submitting your application for government schemes:
- •Aadhaar card of the applicant/promoters.
- •PAN card of the applicant/promoters and business entity.
- •Voter ID or passport (for address proof).
- •Passport-sized photographs of the applicant/promoters.
- •Udyam Registration certificate (for MSMEs).
- •GST registration certificate.
- •Partnership deed (for partnerships) or incorporation certificate (for companies).
- •Memorandum and Articles of Association (for companies).
- •Land ownership deed or registered lease agreement (minimum 5/15 years).
- •Land use conversion certificate (if applicable).
- •Site plan and layout approval from local authorities.
- •No Objection Certificate (NOC) from the gram panchayat or municipal corporation.
- •Detailed Project Report (DPR) with technical, financial, and market analysis.
- •Quotations for machinery, civil works, and insulation from approved vendors.
- •Environmental clearance (CTE/CTO) from the State Pollution Control Board.
- •Architectural drawings and structural designs approved by a licensed engineer.
- •Bank account details and 6-12 months bank statements.
- •Audited financial statements for the last 3 years (for existing businesses).
- •Projected balance sheet, profit & loss statement, and cash flow for 5 years.
- •Loan sanction letter (if applying for a term loan).
- •Aadhaar card of the applicant/promoters.
- •PAN card of the applicant/promoters and business entity.
- •Voter ID or passport (for address proof).
- •Passport-sized photographs of the applicant/promoters.
- •Udyam Registration certificate (for MSMEs).
- •GST registration certificate.
- •Partnership deed (for partnerships) or incorporation certificate (for companies).
- •Memorandum and Articles of Association (for companies).
- •Land ownership deed or registered lease agreement (minimum 5/15 years).
- •Land use conversion certificate (if applicable).
- •Site plan and layout approval from local authorities.
- •No Objection Certificate (NOC) from the gram panchayat or municipal corporation.
- •Detailed Project Report (DPR) with technical, financial, and market analysis.
- •Quotations for machinery, civil works, and insulation from approved vendors.
- •Environmental clearance (CTE/CTO) from the State Pollution Control Board.
- •Architectural drawings and structural designs approved by a licensed engineer.
- •Bank account details and 6-12 months bank statements.
- •Audited financial statements for the last 3 years (for existing businesses).
- •Projected balance sheet, profit & loss statement, and cash flow for 5 years.
- •Loan sanction letter (if applying for a term loan).
How Info Tree Fits Into Your Cold Storage Journey
From eligibility check to disbursement — Info Tree handles every step of your cold storage business setup:
- Free eligibility check: Assess your eligibility for government schemes based on your business model and location.
- Scheme selection: Recommend the best scheme(s) tailored to your project size and requirements.
- DPR preparation: Develop a bankable Detailed Project Report (DPR) that meets government and bank requirements.
- Documentation support: Assist in gathering, verifying, and submitting all required documents.
- Application filing: Handle online and offline submissions, bank coordination, and follow-ups with government agencies.
- Post-approval support: Guide you through compliance, subsidy claims, and loan disbursement processes.
Conclusion:
Cold storage is a high-impact business opportunity in India, addressing critical gaps in the agriculture and food processing sectors.
- Government schemes like PMKSY, NABARD’s Cold Chain Scheme, and MIDH offer subsidies up to 50% of the project cost, making it easier to start.
- The sector is poised for growth, with rising demand for processed foods, exports, and e-commerce driving the need for cold chain infrastructure.
- With the right planning, documentation, and professional support, you can secure funding and set up a profitable cold storage business.
Who should act and why:
- Farmers and FPOs: Reduce post-harvest losses and increase incomes by storing produce for off-season sales.
- Entrepreneurs: Tap into a growing market with government subsidies and long-term profitability.
- MSMEs: Expand your business by adding cold storage facilities to support food processing or distribution.
- Startups: Leverage agri-tech innovations and government grants to build scalable cold chain solutions.
How Info Tree can help you get started:
- Free first consultation: Discuss your project and explore funding options with our experts.
- End-to-end application support: From DPR preparation to disbursement, we handle everything.
- We stay with you until the money hits your account: Our team ensures you receive subsidies and loans without delays or rejections.