Cold Storage Subsidy

The Ministry of Food Processing Industries (MOFPI) in India provides very good financial assistance for the setting up of a Cold Storage in India. This article briefly details the scheme available with MOFPI for setting up a cold chain in India.

What is a Cold Chain?

Cold chain consists of cold storage, cold transport, value addition and preservation infrastructure to provide an integrated cold chain without any break from the farm gate to the consumer. It covers pre-­cooling facilities at production sites, reefer vans, mobile cooling units as well as value addition centres which includes infrastructural facilities like Processing/ Multi-line Processing/ Collection Centres, etc. for horticulture, organic produce, marine, dairy, meat and poultry etc.

Who can setup a cold chain?

Individual or group of entrepreneurs who have business interest in cold chain solutions can set up an integrated cold chain and preservation infrastructure. It can also be set up by corporate and industries who manage cold chain supply chain enabling the linking of producers to the processors and market.

What are the criteria’s for obtaining financial assistance for cold chain?

A cold chain contains multiple facilities at various centers as under. To avail financial assistance under the scheme, any two of the following facility from the below will have to be setup by the unit.

  • Production Facility: Minimal processing centre at the farm level and centers to have facility for weighing, sorting, grading waxing, packing, pre-cooling, control atmosphere (CA) / modified atmosphere (MA) cold storage, normal storage and Individual Quick Freezing (IQF).
  • Transport Facility: Transport level consists of mobile pre-cooling vans and reefer trucks required to transport goods and products in a temperature controlled atmosphere.
  • Distribution Facility: Distribution facility consists of distribution hubs with multi products and multi control atmosphere (CA)/ modified atmosphere(MA) chambers/ cold storage/ Variable Humidity Chambers, Packing facility, cleaning in process (CIP), fog treatment, individual quick freezing (IQF) and blast freezing.

What is the amount of financial assistance provided for setting up of cold chain by MOFPI?

Ministry of Food Processing Industries (MOFPI) provides financial assistance (grant-in-aid) to the tune of 50% the total cost of plant and machinery and technical civil works in General areas and 75% for NE region including Sikkim and difficult areas (J&K, Himachal Pradesh and Uttarakhand) subject to a maximum of Rs.10 crore.

How is the financial assistance provided during the setting up of the unit?

The financial assistance will be released in 3 installments after the investors / promoters have paid or invested their share of the capital fully as per the following schedule:

  • 1st Installment: The 1st installment of 25% of the total grant under the scheme will be released after ensuring that 25% of the promoter’s contribution and 25% of the term loan has been spent on the project.
  • 2nd Installment: The 2nd installment of another 50% of the total grant under the scheme will be released after ensuring that utilization of first installment of grant and 75% of promoter’s contribution & 75% of term loan has been spent on project. Utilization certificate for the first installment has to be submitted by the promoter at the time of making claim for the second installment.
  • 3rd Installment: The 3rd and final installment of remaining 25% of the grant assistance will be released after ensuring that the utilization of the second installment and 100% of promoters and 100% of term loan has been invested in the project. Further, the project should have achieved completion & commercial operation should have started. Finally, the promoter must submit utilization certificate for the second installment at the time of making claim for the 3rd and final installment.

How should the application for financial assistance be made?

The application for financial assistance for setting up of a cold chain should be made in the prescribed format to Ministry of Food Processing in India in the prescribe format. Alternatively, you can talk to one of Adroit Corporation Pvt. Ltd Business Expert to help you apply for the scheme and obtain approval.

Subsidy for Participating in International Trade Fairs & Exhibitions

In order to help Micro, Small and Medium Enterprises develop a market for their products and improve foreign trade, the Ministry of Micro, Small, Medium Enterprises provides subsidy of upto 75% of air fare and 50% of space rental charges. For Women/SC/ST Entrepreneurs & Entrepreneurs from North Eastern Region, the MSME Directorate will reimburse 100% of space rent and economy class air fare. The total subsidy on air fare & space rental charges will be restricted to Rs.1.25 lakhs per unit.

Businesses that have an MSME / SSI Registration are eligible to avail this subsidy once every year. The selection of small/ micro manufacturing units is done by MSME-DIs as per display product profile, theme of the fair and space availability.

ISO 9000 / ISO 14001 / HACCP Certification Subsidy

To hep SME’s become more organized and improve quality, the Ministry for Micro, Small and Medium Enterprises provides an incentive to small scale businesses that have acquired ISO 9000/ISO 14001/HACCP certifications prior to March, 31, 2014. The Scheme provides reimbursement of charges of acquiring ISO-9000/ISO-14001/HACCP certifications to the extent of 75% of the expenditure subject to a maximum of Rs. 75,000/- in each case.

Subsidy for Bar Code

Bar Coding can significantly improve the efficiency of a business by providing timely and accurate data about a product electronically across the supply chain, thereby reducing inventory cost and improving profitability. In order to enhance the marketing competitiveness of MSMEs in domestic and international market, the Ministry of MSME, provides a subsidy for acquiring Bar Coding products. The subsidy provided is 75% of one-time registration fee and 75% of annual recurring fee for first three years of cost of Bar Coding products.