Indian cold chain sector expected to grow at 14% CAGR during 2021-2023
The cold storage market in India is fragmented and unorganized with facilities being largely setup on an ad-hoc basis. India has about 8,200 cold storage facilities as of 2020, 75% of which are suitable only for storing single commodities, mainly potatoes, one of the major crops in India in terms of production and consumption. The surge in online grocery, processed foods and pharmaceuticals sales have opened up ample opportunities for developers and third-party logistics players to develop multi-purpose cold chain facilities in India.
Shyam Arumugam, MD at Industrial & Logistics Services at Colliers India said, “Cold store facilities today are an emerging asset class in India. Lack of organized/efficient supply chain across the country currently leads to wastage of agricultural produce, and the government has been keen on curbing the same. Increased focus on developing organized cold storage infrastructure would enable lowering this wastage by shelf-life improvement of the stored produce. There is a clear opportunity for organized development in this segment as the current infrastructure is primarily fragmented and undersupplied.
Currently, most facilities are located near production points. Occupiers can explore smaller cold storage facilities of about 10,000 sq feet– 50,000 sq feet, closer to distribution centres, but in peripheral locations of Tier I cities, for efficient last-mile delivery. Over the last eleven years, the government has initiated policies such as profit-linked tax deduction, allowing FDI and other financial assistance, to support integrated cold chain management and encourage the private sector to develop facilities.
Published on:
11 June 2021
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