Introduction
The Government has developed a number of schemes to encourage cold storages and warehousing in India through various tax exemptions and subsidies. Government institutions like the National Horticulture Board (NHB), National Horticulture Mission (NHM), Agricultural and Processed Food Products Export Development Authority (APEDA), Ministry of Food Processing Industry (MoFPI), Mission for Integrated Development of Horticulture (MIDH) and Department of Agriculture and Cooperation currently operate in the cold storage sector.

Financial Assistance for setting up of Cold Chain
I. Ministry of Food Processing Industry (MoFPI)
Financial assistance (grant-in-aid) under the scheme is limited to a maximum of Rs. 10 crore per project in relation to technical civil works and eligible plant and machinery, subject to the following:
• For storage infrastructure including pack house and pre cooling unit, ripening chamber and transport infrastructure, grant-in-aid at 35% for General Areas and 50% for North
East States, Himalayan States, Integrated Tribal Development Project (ITDP) Areas and Islands, of the total cost of plant and machinery and technical civil works is provided.
• For value addition and processing infrastructure including frozen storage, deep freezers associated and integral to the processing, grant-in-aid at 50% for General Areas and 75% for North East States, Himalayan States, ITDP Areas and Islands is provided.
• For irradiation facilities, grant-in-aid is provided at 50% for General Areas and 75% for North East States, Himalayan States, ITDP Areas and Islands.

II. Mission for Integrated Development of Horticulture MIDH
Assistance for setting up of new cold storage infrastructure is available to multi-chamber cold storage units with energy efficient technology with provision for thermal insulation,
humidity control, advanced cooling systems, automation, etc., having specifications and standards as per the guidelines of the ministry. While cold storages (long term storage and distribution hubs) up to 5000 MT capacity are promoted under NHM/ Horticulture Mission for North East and Himalayan States (HMNEH) sub-schemes, capacity above 5000 MT up to 10000 MT is promoted under NHB Scheme.

• National Horticulture Board (NHB)
Setting up of cold storages (of capacity above 5000 MT and up to 10000 MT) and their modernization are eligible for assistance under the NHB scheme of capital investment subsidy for construction, expansion and modernization of cold storage for horticulture products (a sub scheme under MIDH). It is an open ended credit linked scheme with scale of assistance at 40% of capital cost of project, limited to Rs. 30 lakhs per project in General Areas, and 50% limited to Rs 37.50 lakhs per project in case of NE, Hilly and Scheduled Areas. 
• National Horticulture Mission (NHM)
Cold storage (long term storage and distribution hubs) up to 5000 MT capacity are eligible for assistance under the openended scheme of NHM/HMNEH (a sub scheme of MIDH). The assistance is extended as subsidy to credit linked projects at 35% of capital cost of project in General Areas and 50% in case of NE, Hilly and Scheduled Areas, as per Operational Guidelines for MIDH.

III. Small Farmer Agri-Business Consortium (SFAC) Assistance
Setting up of cold storage as a part of an integrated value chain project is eligible for subsidy, provided the cold storage component is not more than 75% of Total Financial Outlay (TFO). The scale of assistance as subsidy to projects is at 25% of capital cost with maximum ceiling of Rs.2.25 crores in General Areas, and 33.33% with a ceiling up to Rs.4 crores in case of NE, Hilly and Scheduled Areas, as per Integrated Scheme for Agricultural Marketing (ISAM) – Operational Guidelines. With the motive of doubling farmers’ incomes and reducing post-harvest losses, the Government is promoting setting up of post-harvest infrastructure. So far progress has taken place in development of storage space, largely stemming from the earlier success of storing potato for the entire year. Total number of 2264 cold stores have been established through subsidies
between 2009 and 2016-17, with a capacity of 1,05,06,339 MT

IV. Agricultural and Processed Food Products Export Development Authority (APEDA) Assistance
Setting up of cold chain is assisted by APEDA as a part of its strategy to develop industries related to scheduled products.
• Exemption on Custom and Excise Duty
i. Custom Duty: Projects of cold storages, cold room (including farm level pre-cooling) and industrial projects for preservation, storage or processing of agriculture, apiary,
horticultural, dairy poultry, aquatic and marine produce and meat have been granted import status with concessional basic custom duty (BCD) of 5%. Truck refrigeration units and refrigeration motor vehicles have been fully exempted from BCD.
ii. Excise Duty: Central excise duty has been fully exempted for installation of cold storage, cold room or refrigerated vehicle for the preservation, storage, transport and processing of agricultural, apiary, horticultural, dairy, poultry, aquatic and marine produce and meat air conditioning equipment and refrigeration panels for cold chain infrastructure, including conveyor belts used in cold storages, mandis, and warehouses.

Foreign Direct Investment (FDI) in Cold Chain¹
Government of India has permitted 100% FDI in the cold chain sector for facilitating the growth of cold chain infrastructure. Under this FDI policy, a minimum investment of US$100 is mandatory with at least 50% investment in back-ended infrastructure. As per Department of Industrial Policy & Promotion, the exact figure for FDI in only cold chain is not available; however, total FDI in food processing industries including cold chain was Rs. 45,130.73 crores as on March 2017.²

Fiscal Incentives for Cold Chain
Section 80-IB of the Income Tax Act provides deductions in respect of profits from industrial undertakings related to cold chain. For the first 5 years, the deductions are at 100% and then 25/30% for the next five years.
I. Under Section 35-AD of the Income Tax Act 1961, deduction at 150% is permitted for expenditure incurred on capital investment in setting up a cold chain facility.
II. Cold chain projects are eligible for External Commercial Borrowings.
III. Concessional rate of custom duty is available at 5% on imported equipment for cold chain facility under project import benefits.
IV. Many activities pertaining to cold chain are included in the exempted and the negative list for service tax

This year’s budget spelt out Vision 2030 focus on integrated approach towards agro and food processing, preservation, packaging and maintenance of the cold chain. High farm production and productivity will be achieved through modern agricultural practices and value addition. An integrated approach towards agro and food processing, preservation, packaging and maintenance of the cold chain will be the focus of attention.

_{¹ PIB, Ministry of Agriculture, Government of India
² Department of Industrial Policy & Promotion}