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Financial Assistance for Setting up a Cold Chain

Ministry of Food Processing Industries (MOFPI) – Subsidy on Setting Up a Cold Chain

MOFPI provides financial assistance to entrepreneurs or businesses want to set up a cold chain. Cold Chain is the backbone of food processing industry and cold storages help to preserve the organic products from being destroyed. Indian government is keen on developing a strong cold chain throughout India to stop wastages of fruits, vegetables and grains or similar products. There is an increasing demand of establishing cold storages for organic produce, sea foods, dairy products, and poultry, etc. Currently, government doesn’t have capacity to provide cold chain throughout country but it is possible though ‘entrepreneur-government’ investment approach.

Cold Chain – A temperature controlled supply chain.


Criteria for availing the subsidy

The financial assistance is provided in three steps and in order to avail this scheme – three out of two following facilities have to be set up by the unit itself:

  • Production Facility: Minimal Processing Centre at the farm level which will have facilities for weighing, sorting, grading, packing, pre-cooling, chilling, cold storage and Individually Quick Freezing (IQF)
  • Transport: Mobile cooling trucks and reefer trucks as may be suitable for transport of Non-horticulture produce.
  • Distribution Hub: Distribution hubs with multi product cold storage /Variable chilling/ freezing Chambers, Packing facility, IQF and Blast/ Plate freezing etc.

Quantum of Assistance

  • Grant in aid @50% of the bank appraised cost including interest during construction, subject to a ceiling of maximum of INR 5 Cr per project. Remember the land acquiring cost won’t be counted under this scheme.
  • An interest grant will be also provided for a period of 7 years at the interest rate of 7%.
  • Grant in aid @ 90% of the bank appraised cost including the cost towards setting up of the solar power plant, subject to a maximum of INR 5 crore.

Release of Grant

  • First Instalment: First instalment of 25% will be released only after ensuring that the promoter’s 25% contribution and 25% of the term loan has been spent on the project.
  • Second Instalment: The 50% of the total grant may be released by the concerned authority only after ensuring that promoter’s 75% contribution and 75% of the term loan have been utilized.
  • Third Instalment: The final instalment of the grant may be released after ensuring that 100% of term loans and promoter’s contribution of 100% have been utilized.


  • The applicant’s net worth should be 1.5 times of grant applied for.
  • The term loan should not be less than 25% of the project cost.
  • Commercial production should not be prior than the submission of application.

Who can apply?

  • Individuals
  • Group of entrepreneurs
  • NGOs
  • Cooperatives
  • Private Sector Companies

For more information, CLICK HERE.

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PC: efytimes.com

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