In India, there has been a phenomenal growth in production of horticulture produce, dairy products, and meat products over the last decade. Owing to the tremendous pressure on improving supply chain and reducing losses during produce handling and movement, the need for creation of a cold chain network is crucial for perishable food commodities. Cold storage in India has been largely adopted for long-term storage of potatoes, onions and high value crops like apples, grapes and flowers. Potato cold storages used to contribute 88 per cent storage capacity till 2000. However most of the new cold storages in the last decade have been constructed as multipurpose facilities focusing on all fruits and vegetables, poultry, dairy and FMCG product categories.
The Indian cold chain market is highly fragmented with more than 3,500 companies in the whole value system.
Cold storage solutions form about 85 per cent of the Indian cold chain market by value and the balance 15 per cent is contributed by transportation. There are various standalone, integrated companies and 3PL service providers offering cold storage and transportation solutions to various food companies. However, these are not enough to cater to the growing food demand.
High growth prospects for the food processing sector along with attractive government incentives (including 51 per cent FDI) make cold chain business a lucrative proposition for foreign investors as well.