Cold Storage Subsidy in India: NABARD, NHM & State Government Schemes

The process of establishing a cold storage facility in India necessitates large expenditure on land improvements, civil work, insulation, refrigeration apparatus, electrical infrastructure and heat-controlling apparatus. For farmers, agribusiness entrepreneurs, Farmer Producer Organisations (FPOs) and food industry ventures, obtaining such finances is one of the most difficult tasks when setting up a facility.

In order to stimulate the investments in agricultural infrastructure thereby minimizing post-harvest losses, the Indian Government offers financial aid through a range of governmental schemes, including the Mission for Integrated Development of Horticulture (MIDH), National Horticulture Mission (NHM), National Horticulture Board (NHB), Agriculture Infrastructure Fund (AIF) and Pradhan Mantri Kisan Sampada Yojana (PMKSY).

Besides the central government schemes, states like Uttar Pradesh, Madhya Pradesh, Bihar, and Punjab have their own agricultural infrastructure and food-processing initiatives that could help the approved cold storage programs.

However, all the above-mentioned schemes do not provide the same type of support structure. Some schemes provide subsidy capital linked to credit, while others provide support in terms of interest or grants for cold-chain infrastructure. It is very important to know these differences before preparing a project proposal or approaching a bank for financing.

This guide describes the main cold storage subsidy schemes in India and explains such features as financial assistance system, eligibility requirements, state-wise opportunities, etc.

Overview of Cold Storage Subsidy Schemes in India

Many government schemes work towards promoting the development of refrigerated storage and post-harvest systems. The best scheme is determined based on storage capacity intended, geographical area for installation, nature of the product, and design of the project.

The table below outlines several important programs that can be utilized.

The figures listed above indicate the parameters of the announced central plans. But they should not be treated as the guarantees for any given project. The actual eligibility and costs that can be considered are defined strictly by the acting guidelines and the implementing organization.

1. NABARD Cold Storage Subsidy: Understanding the Financing Structure

NABARD has a crucial role in contributing towards agricultural infrastructure formation and improving access to institutional financing in rural areas.

Due to its work in the area of agricultural lending, refinance facility development, and development of rural infrastructure, it is often confused with cold storage subsidy applications.

However, a NABARD supported loan and a government's capital subsidy differ in their nature.

NABARD is not a direct provider of subsidy for every new cold storage project. As per the rules of the applicable scheme, financial assistance is provided by banks and financial institutions, while the capital subsidy is given by the government through a separate agency.

How Does NABARD Support Cold Storage Projects?

NABARD assists in the development of agricultural infrastructure through its refinance and other financing arrangements. Banks and other eligible financial institutions can utilize NABARD funding arrangements to provide credit for various projects in the agricultural sector.

For cold storage investors, this is useful because it may allow them to access project finance subject to the particular lending institution and scheme's requirements.

The proposed project should be both technically and financially viable. Generally, banks check how much the promoter is going to invest from their own resources, their ability to repay the loan and the cost of the project.

Is NABARD Subsidy Available for Cold Storage?

Applicants need to mention clearly the specific scheme under which they are requesting financial assistance and should not assume that since it is a NABARD loan, it will include a capital subsidy.

For horticulture cold storage projects, it is important to look at important schemes like MIDH/NHM and NHB. Also, the Agriculture Infrastructure Fund may provide interest concessions for eligible post-harvest infrastructure loans.

A project report should differentiate clearly between the bank loan, promoter contribution, subsidy applicable, and interest support to be availed of.

2. National Horticulture Mission (NHM) and MIDH Cold Storage Subsidy

Mission for Integrated Development of Horticulture (MIDH) is a notable initiative of the government of India which promotes horticulture and post harvesting infrastructure.

The National Horticulture Mission (NHM) is a sub scheme of MIDH and relates to states other than the North Eastern and Himalayan region. Alternatively, HMNEH is the programme for the North Eastern and Himalayan states.

One of the key components of MIDH is financial assistance in construction, upgrading and modernisation of cold storage systems.

How Much Subsidy Is Available Under MIDH/NHM?

According to the MIDH operational guidelines issued, the following is the standard of support for qualifying cold chain projects:

Support is given in the form of a credit-linked back-ended subsidy. The eligible beneficiaries, depending on the relevant parameters, technical specifications and cost norms, may be provided assistance for a facility of up to 5,000 metric tonnes.

The scheme operates based on the requirement and is executed through State Horticulture Missions followed by an Annual Action Plan that is duly sanctioned and money that is made available.

Which Projects Can Receive Assistance?

Based on the approved element and the relevant guidelines, financial help could be possible for:

• Setting up new horticultural cold storage facilities;
• Upgrading the existing qualified storage system;
• Modernization of cold storage facilities;
• Temperature controlled storage and other permitted post harvesting systems;
• Pre-cooling units as well as cold rooms;
• Ripening Chambers and other allowed parts of the cold chain in general.

The proposed facility shall comply with the technical requirements and minimum system standards defined in the scheme.

How Does the Back-Ended Subsidy Work?

A back-ended subsidy does not need to be provided to the applicant from the start of the construction process.

Normally, the applicant is responsible for arranging the required promoter contribution and allowable bank loans. As soon as the project meets the required specifications and verification processes, it is approved through the implementing agency and adjusted according to the financing scheme.

This indicates that the entrepreneurs should plan their finances realistically before starting a project. The subsidy is to be accepted as a component in the financing scheme and not the only source of financing the project.

3. National Horticulture Board (NHB) Cold Storage Subsidy

The National Horticulture Board (NHB) operates a capital investment subsidy programme for building, extending and improving cold storage installations and storage infrastructure for horticulture products.

This programme is useful to those entrepreneurs who want to expand their business and build larger commercial cold storage facilities.

As per the MIDH/NHB guidelines NHB handles cold storage projects with a capacity between 5,000 MT and 20,000 MT, complying with the respective technical and economic requirements.

NHB Subsidy Percentage

The published assistance pattern for eligible projects is:

It's a credit-related and deferred subsidy. The calculation is to be made based on eligible project costs and determined cost norms, not on the total cost incurred for construction.

The guidelines of NHB entail different cost norms based on either the type of construction or storage capacity of the projects.

For instance, the cost norms for civil construction may differ from those applicable for civil construction and pre-engineered buildings together.

What Facilities Are Covered?

Eligible project components may include:

• Conventional cold storage facilities.
• Multi-chamber cold storage.
• Controlled Atmosphere (CA) storage.
• Eligible expansion and modernisation work.
• Associated refrigeration and electrical infrastructure.
• Other components specified in the applicable NHB guidelines.

A project must meet relevant requirements for engineering processes, design specifications and documentation.

Important NHB Application Requirements

NHB has developed an online application system for eligible projects so applicants must refer to the latest operational guidelines, eligibility criteria, technical specifications, cost norms and deadlines of applications.

An amendment to the NHB guidelines was issued on 21 August 2026. Therefore, applicants must check the latest guidelines instead of relying on older subsidy articles or previous estimates of project costs.

4. Agriculture Infrastructure Fund (AIF) for Cold Storage Projects

The Agricultural Infrastructure Fund (AIF) is a central government financing scheme aimed to develop infrastructure such as post-harvest management systems in the agricultural sector.

Cold storage facilities are included in the eligible types of infrastructure.

AIF, unlike the traditional capital subsidy, basically provides financing for eligible loans through interest subvention and credit guarantee support.

Key Financial Benefits Under AIF

The interest subsidy assists in lowering the cost of borrowing for eligible projects. Credit guarantee assistance improves access to institutional financing for the eligible beneficiaries.

Eligible applicants can be farmers, FPOs, agricultural entrepreneurs, cooperatives, PACS, startups, and other specified organizations.

Is AIF a Capital Subsidy?

No. The 3% interest subvention should not be viewed as a financial support that pays for 3% of total cold storage building expenses.

For instance, if an eligible entrepreneur obtains a ₹2 million loan under the program, the resulting interest benefit can lower the interest rate by up to 3 percentage points per annum subject to the rules of the scheme.

AIF can be handy in combination with well-thought-out project financing or other government support options. However, any convergence must be cross-checked against the rules to not have duplicate funding for the same component of a project.

5. PMKSY Integrated Cold Chain Scheme

The Pradhan Mantri Kisan Sampada Yojana (PMKSY) is introduced and run by the Ministry of Food Processing Industries (MoFPI). The particular part of the plan is the Integrated Cold Chain and Value Addition Infrastructure scheme.

The target of PMKSY is to create an integrated cold chain that runs from the farm gate to the consumer. The plan encourages some infrastructure that allows maintaining agricultural and food products through all processes, from storing to transporting, and processing food products and agricultural produce.

What Infrastructure Is Supported?

Eligible project components may include:

• Farm-level pack houses and pre-cooling facilities.
• Multi-product and multi-temperature cold storage.
• Controlled Atmosphere and Modified Atmosphere storage.
• Ripening chambers.
• Refrigerated vehicles and mobile cooling units.
• Processing-linked frozen storage and deep-freezing infrastructure.
• Individual Quick Freezing (IQF) and blast-freezing facilities.
• Distribution hubs and other eligible cold chain components.

PMKSY Financial Assistance

The maximum amount of financial aid available is ₹10 crore for each qualifying project as per guiding principles and approved project costs.

A significant requirement is that the scheme is meant for projects covering integrated cold chains only, where an independently functioning cold storage is not eligible for funding under the programme.

Hence, applicants are required to explain how the proposed facility will be linked to different segments of the supply chain such as harvesting, storage, process, and distribution.

The Ministry of Food Processing Industries (MoFPI) invites submissions of applications through the issue of EOIs, keeping in mind the objectives of the programme and at the same time availability of the fund.

6. State-Wise Cold Storage Subsidy Schemes

Besides central government initiatives, state governments help farming infrastructure by means of horticulture missions, food processing policies and various state-level initiatives.

The assistance provided may vary depending on factors like the location of the project, storage capacity, type of produce involved, applicant category and amount of investment required.

Entrepreneurs who plan their projects in the states of Uttar Pradesh, Madhya Pradesh, Bihar and Punjab should consider the below-mentioned schemes at state-level.

Uttar Pradesh Cold Storage Subsidy and Food Processing Incentives

Uttar Pradesh is famous for its agriculture and horticulture industry, thus a demand for a warehousing system for potatoes, fruits, vegetables and other perishable products emerges.

The Uttar Pradesh Food Processing Industry Policy 2023 contains benefits for cold storage and value addition facilities.

According to the official Invest UP policy information, the following assistance is listed:

The policy also indicates additional incentives under the heading of food-processing investment, including the specified assistance of the construction of factories, machinery and technology.

According to principles of the policy, entrepreneurs should verify the details of policy terms, eligible projects and up-to-date state of the application with the responsible state authority before integrating these incentives into financial plans.

Madhya Pradesh Cold Storage Subsidy Schemes

The state of Madhya Pradesh provides agricultural infrastructure projects that promote the storage and post-harvest processing of perishable crops.

The list of schemes being implemented in the state for agricultural service portal includes programmes initiated under the Rashtriya Krishi Vikas Yojana (RKVY).

• Perishable produce storage.
• Ripening chambers.
• Pack houses.
• Post-harvest management infrastructure.
• Other agricultural infrastructure development activities.

The above programmes can be important for entrepreneurs or agriculture agencies that are planning to build storage facilities in the state.

But the availability, percentage of subsidy and eligible project components depend on the regulations of the scheme.

People interested in applying for the cold storage industry should reach out to the Madhya Pradesh Directorate of Horticulture and Food Processing or the appropriate district horticultural office to check if they can submit an application for any particular cold storage creation.

At the same time, central schemes like MIDH, NHB and AIF should be properly assessed alongside state schemes.

Bihar Cold Storage Subsidy Schemes

In Bihar, certain horticultural infrastructure programs support the construction, upgrading, and renovation of cold storage facilities.

The efforts made in this respect are the directorate of horticulture, Bihar, which provides project guidelines, application checklists, and model project reports for different cold storage categories.

Information on assistance published for implementation lays down the assistance available for credit-linked, back-ended support to eligible entrepreneurs and promoters, FPCs, and FPOs.

In one of the published model project documents, it states that for eligible Cold Storage Type-II projects in a general area, assistance is available to the extent of 35% of the admissible project cost, subject to the conditions and cost norms.

The Bihar Directorate also provides guidance for:

• Construction of Cold Storage Type-I and Type-II.
• Modernisation of existing cold storage facilities.
• Ripening chambers.
• Onion storage.
• Pack houses and post-harvest infrastructure.
• Solarisation and other eligible cold chain improvements.

The state's checklist of application requirements includes items like land records, a detailed project report, technical layout, quotations for machinery, bank sanction, and statutory clearances, among others.

Applicants need to keep checking the notifications issued in the given financial year regarding dates of application opening, since the availability and funding may change at the state level.

Punjab Cold Storage Subsidy Schemes

The cold chain infrastructure is crucial for the state of Punjab, which produces large volumes of agricultural products and processes foods. The local producers and industry players can consider various assistance programmes including MIDH, NHB, AIF and PMKSY.

Entrepreneurs in the Punjab region can investigate the central Schemes like MIDH, NHB, AIF and PMKSY to ascertain their relevance in terms of eligibility.

Government development framework for the agriculture and food production sectors in Punjab covers support in terms of construction of both agricultural and cold chain production related infrastructure projects enveloping funding of interest costs for eligible sectors.

The Department of Agriculture and various related agencies of the Punjab government announce measures and principles for implementing the different agricultural infrastructure components.

When applying for a new cold storage facility, the applicant should review the existing food processing policy and the pertinent notifications issued by the department of horticulture, and instructions to avail of bank-linked measures.

It should be noted that past rates should not be construed as being in force until confirmed by the body responsible for their implementation.

7. Eligibility Criteria for Cold Storage Subsidy

The criteria to be fulfilled depends on which scheme is in consideration as well as the nature of the project. Nonetheless, some general conditions are applicable for various government-funded cold storage programmes.

Applicant eligibility: People and entrepreneurs, private sector companies, partnership firms, FPOs, FPCs and cooperatives and other eligible bodies are encouraged to apply under the given schemes.

Land availability: The applicants should have legal possession of land which can be proved through ownership documents, lease certificates or other relevant documents.

Technical feasibility: The facility should comply with the regulations regarding sound engineering concepts. The storage capacity, refrigeration demands, insulation, temperature control and safety standards should be met.

Financial capability: The applicants should prove their readiness to secure the promoter contribution and bank financing.

Project documentation: To submit an application the completed project report, financial estimates, drawings and financial modeling should be submitted too.

Scheme-specific conditions: The applicant has to adhere to the stipulated conditions laid down in the scheme concerning project category, location, permitted elements, deadlines for applications, and grant limitations.

Not all applicants or projects qualify for financial aid. The approval will depend on the appraisal of the appropriate authorities and the availability of funds.

8. Documents Required for a Cold Storage Subsidy Application

The advance preparation of documentation can structure the application and project evaluation phases better.

These documents are generally required as a minimum set, although the list may vary based on the implementation agency.

Based on the region and approved plan, the extra documents may indicate basic data sheets, engineer in charge certificates, pollution clearance, fire safety certificate, insurance documents and project completion documents.

9. Step-by-Step Process to Apply for a Cold Storage Subsidy

Usually, the procedure of application includes the stages of project planning, financing, technical assessment and verification.

Step 1: Identify the Appropriate Scheme

The site of the planned cold storage facility has to be analyzed with regards to capacity, necessary facilities and the overall plan of the project.

Carry out the analysis of the eligibility criteria of MIDH/NHM, NHB, AIF, PMKSY and relevant programs in different states.

Step 2: Prepare a Detailed Project Report

Develop the DPR where the relevant investment, capacity, specifications, cold storage requirements, total project expenditures and estimated earnings are given in detail.

The report should state clearly the objective of the plant and its appropriateness for storing the mentioned products.

Step 3: Arrange Land and Financial Resources

Inquire about the availability of the land and the level of investment and loan for the project.

Approach a bank or financial institution as required by the selected scheme for evaluation of the project and financing.

Step 4: Submit the Application

Submit the application through the relevant department of the government, NHB portal or the appropriate executing agency.

Make sure that the application includes all the required technical and financial documents.

Step 5: Complete Technical Evaluation

The relevant authority can scrutinize the Detailed Project Report (DPR), site particulars, cost of construction, refrigeration system specifications, and financing arrangements.

Further information or site visit may become necessary prior to permitting.

Step 6: Complete Construction and Installation

Implement the approved project based on the prescribed specifications and relevant conditions.

Keep records of building activity, equipment installation, expenses, and commissioning.

Step 7: Complete Inspection and Subsidy Claim

The verification might be conducted by either the financing institution or the implementing agency after the completion of the required project milestones.

Subsidy disbursement follows the guidelines for the release and adjustment stipulated in the plan.

10. Why Is a Detailed Project Report Important for Cold Storage Subsidy?

A Detailed Project Report (DPR) is one of the most important reports when it comes to a cold storage project.

The report provides information regarding the manner in which the proposed facility will be constructed, financed and operated. It assists banks, as well as government bodies, in evaluating if the project is feasible from technical and financial perspective.

An effectively prepared DPR should cover the following areas:

Project overview: Location, proposed capacity, commodity type, business model and project objectives.

Technical specifications: Building design, PUF/PIR insulation, refrigeration system, temperature requirements, chamber configuration, electrical infrastructure and safety provisions.

Project cost: Civil construction, insulation, refrigeration equipment, electrical installations, automation and other eligible expenses.

Financial projections: Promoter contribution, bank loan, operating expenses, expected revenue, cash flow and loan repayment capacity.

Implementation schedule: Land preparation, construction, installation, commissioning and expected commercial operation.

Regulatory requirements: Applicable licences, statutory approvals, safety requirements and scheme-specific documentation.

A DPR that is technically deficient or financially impractical presents challenges at bank appraisal stage and while assessing subsidies. It is crucial, therefore, to prepare the DPR based on realistic estimates of the project costs and sound engineering.

11. Common Mistakes to Avoid When Applying for Subsidy

Businessmen about to realize a cold storage project should avoid some common mistakes at the stage of planning.

One of the mistakes made most often is thinking that all schemes have the same subsidy percentage. Assistance is different depending on the type of project, its location and costs covered.

A further error is the misunderstanding of capital subsidies and interest subsidies. For instance, the AIF grants subsidies in the form of interest on eligible loans, not a portion of the total cost incurred.

The applicants should refrain from starting construction works without confirming the scheme's approval and eligibility criteria.

The use of outdated subsidizing rates; ill-drafted technical designs; unreal construction expenses; or defective financial forecasts can lead to the prolonged evaluation.

Lastly, the applicants should not take it for granted that two schemes may be used in combination in respect of the cost. The proposed combination must be discussed with the responsible bodies.

Frequently Asked Questions

How much subsidy is available for cold storage in India?

Under the provisions of MIDH/NHM and NHB, eligible projects may receive 35% on their investments in general areas and 50% in identified eligible areas. The extent of the aid depends on project potential, eligible expenses and specific requirements of the scheme concerned.

Is NABARD providing direct subsidies for cold storage?

NABARD assists agricultural lending and refinancing mechanisms. However, a NABARD-related advance is not a direct capital subsidy automatically. Applicants should note under what subsidy item the assistance corresponds.

Can an individual apply for a cold storage subsidy?

Yes. Individuals and entrepreneurs may qualify under appropriate schemes subject to the qualifications of the applicants, specifications of the projects, structure of financing and requirements of relevant schemes.

Is there a cold storage subsidy in Uttar Pradesh?

Absolutely! The food processing policy of Uttar Pradesh consists of schemes for support to qualified projects in the cold chain and value addition infrastructure sectors. The interest of the central government in the question can also be applied, although it would depend on the specifics of the project.

Does Bihar provide financial assistance for cold storage construction?

The directorate of horticulture in Bihar issues project-based guidelines along with the information about the assistance for cold storage facilities. Interested parties are urged to check the current application notification and the list of admissible project costs.

Can AIF and MIDH assistance be used together?

In special situations, it may be possible to combine the schemes of several programs but only under the respective guidelines. It is the responsibility of the applicant to check whether the financing structure and proposed project structure indeed meets the criteria for combination.

Does PMKSY provide subsidies for standalone cold storage?

Integrated Cold Chain and Value Addition Infrastructure component is used for integrated cold chain projects only. Therefore, single cold storage facilities cannot be included under this component.

Is a DPR mandatory for a cold storage subsidy?

For project appraisal and subsidy applications, a Detailed Project Report will generally be necessary. This then forms the basis of technical specification, estimated investment, financial feasibility and proposed plan of implementation.

Conclusion

Through the provision of assistance from the government, the investment encumbrance that comes with setting up or bettering cold storage infrastructure in India can be alleviated. Various schemes such as MIDH/NHM, AIF, NHB, PMKSY, etc. provide various facilities. In addition to these schemes, state-level initiatives can provide many other options for qualified agricultural and food processing projects.

Choice of scheme depends on many factors like the location of the facility, its storage capacity, intended use, finance raised and technical specifications of the facility. Entrepreneurs must check the latest guidelines and confirm eligibility status from the concerned authority before commencing construction.

Equally important is the preparation of a technically sound and financially realistic project report. Proper planning of refrigeration capacity, insulation, electrical infrastructure, temperature control and operating costs helps establish the feasibility of the proposed facility.

Singhania Refrigeration provides cold storage project planning, design, installation and commissioning support. For businesses evaluating a new facility or expansion, professional project planning and DPR preparation can help establish the technical and financial requirements before moving ahead with the investment.