India ranks second globally in terms of the output of fruits and vegetables. But there are fewer cold storage solutions. What are the challenges in setting up cold storage in India? Every year, India produces approximately 85 million metric tonnes of vegetables. Around 40% of the amount is wasted. India is the world’s greatest producer of milk, contributing 17% of the total production with an annual output of 100 million tonnes. Nevertheless, poor types of cold storage in india cause 10% of this production to be lost each year. According to the Food & Agricultural Organization of the UN, 1/3 of all food produced each year is lost, or around 1.3 billion tonnes.
This demonstrates unequivocally that the Indian cold chain business has a big deficit. This gap presents both service providers and farmers with a fantastic opportunity. The pharmaceutical sector is another factor driving demand for the cold chain business; India’s vaccine market is expanding at a rate of 25–30 percent, and vaccinations need a temperature-controlled environment.
Challenges Facing the Cold Storage Solution in India
The cold storage solutions demand is higher in India. But there are only 8000 cold storage solutions in India. So, what are the challenges in setting up cold storage in India? In this section, we are going to discuss these challenges in great detail.
Here they are:
a. The Price of the Cold Storage Solution in India Per Cubic Meter
The price per cubic meter storage for frozen storage in India is $ 60 as opposed to $ 30 in the west, making this among the most critical challenges of cold storage facilities. As per data from 2014, India had roughly 31.82 million metric tonnes of cold storage capacity. However, there had been a shortfall of 3.28 million tonnes, and only 26.8 million tonnes of that were really in use, leaving an 8.25 million tonne gap. The creation of the infrastructure necessary for the effective operation of the cold chain business presents one of its most significant challenges.
1. Static infrastructure, such as contemporary pack buildings with pre-coolers, mass cold facilities, and cold distribution hubs, are examples of the elements that need to be created.
2. Movable infrastructure, such as reefer containers and trucks.
3. Together with trained human resources, there is a lack of standards and processes that must be developed.
4. The lack of reliable power supply is a significant problem for the Indian cold chain business, and as a result, the enterprises involved must make separate investments in power backup.
5. Relative to the 10% inside the west, fuel prices make up about 30% of operating costs for cold storage in India.
6. The substantial real estate prices, which have increased by 280%, are one of the main reasons the cold chain industry is not booming. A cold chain would cost at least INR 50 million in addition to real land expenditures.
7. In the sector, capacity utilization is only about 30% on average.
This blog is also worth reading for you: – How much electricity (KVA) is required to run a 2000 MT cold storage?
In India, just under 30,000 chilled vehicles were used to carry perishable goods in 2015, according to estimates from the industry. The majority of refrigerated vehicles are used to carry milk and milk-related products.
India possessed roughly 6,300 cold storage spaces in December 2016, however, they weren’t all distributed equally. Potatoes were kept in these cold storage rooms the majority of the time. In West Bengal and Uttar Pradesh, there are the coldest storage facilities. Coldex Pvt Ltd, Dev Bhumi Cold chain Ltd, Gati Kausar India Ltd, Snowman Logistics, and Future supply chain Solutions Ltd are the leading participants in the cold storage business in India. Small players find it difficult to enter this market because of the high entry expenses.
The Response of the Government to the Limitations Faced by the Cold Chain Sector
The Indian government has also become aware of this gap and has launched a number of efforts to help the cold chain sector. One such program was initiated in 2014 by the Ministry of Agriculture under the name “Mission for Integrated Development for Horticulture,” which placed a high priority on cold-chain development. The Ministry of Food Processing Industries (MoFPI) has launched a program titled “scheme on cold chain, value addition & preservation infrastructure” that is specifically for cold chains. The cold chain industry is predicted to develop at a CAGR of 19 percent between 2017 and 2022. So, What is the approximate cost of cold storage in India? It is being reduced as much as possible via governmental policies.
According to a 2014 survey by YES Bank, the market share in the cold chain was split between 88–90% cold storage and 10-12% refrigerated transportation. The ministry of finance acknowledged that there wasn’t any value added to the commodity as such, thus they did not charge VAT and service charges on operations for processing, delivering, storing, and marketing farm goods. Cold chain monitors and preserves the products until they reach their final destination.
The Indian macroeconomic environment is shifting, and there is a lot of room for expansion in the cold chain sector. By removing the unnecessary and time-consuming checkpoints, GST was a blessing. Prior to the GST, businesses favored building warehouses in tax-friendly areas. GST implementation has decreased transportation delays caused by e-way bills and numerous checkpoints. Smart sensors and data loggers coupled with GPS can measure temperature, pressure, and moisture values in real time. There is a large demand for cold chains as a result of the E-commerce and agricultural technology industries’ explosive growth.
Bottom Line - Cold Chain is Important in India for Multiple Reasons.
NSSPL offers top-quality, highly reliable, and efficient cold storage solutions. You can contact the NSSPL for the installation or maintenance of cold storage solutions in India. Our experts will walk you through the entire process. So, let us help you in getting ahead in your industry.