If you are planning a cold storage unit, the first cost question is rarely the building. It is how much of the project cost you can recover through government support, and whether that support will still be available by the time you apply. In India, cold storage can draw on two main routes: a capital investment subsidy under the horticulture mission (MIDH, with NHB handling larger projects) and interest support with a credit guarantee under the Agriculture Infrastructure Fund (AIF). This guide explains how each one works, who can apply, and what to sort out before you sign a loan or start construction.
Last reviewed: September 2026. Scheme validity dates and rates change with each guideline cycle, so treat the figures below as a starting point and confirm them against the current guidelines before you commit money.
What “cold storage subsidy” actually means
There is no single cold storage subsidy in India. Several schemes support cold storage and related post-harvest infrastructure, and each one works differently. Some give a capital subsidy after you have built the project with a bank loan. Others reduce your interest cost or guarantee the loan so that you do not have to offer collateral. The right route depends on your project size, what you will store, where the unit will be located and who is applying.
Route 1: Capital investment subsidy under MIDH / NHB
The Mission for Integrated Development of Horticulture (MIDH) supports cold storage for horticulture produce. Projects up to 5,000 MT are promoted under the National Horticulture Mission and the Horticulture Mission for North East and Himalayan States, while projects between 5,000 and 10,000 MT are handled by the National Horticulture Board (NHB).
How much subsidy is available
Under the MIDH operational guidelines dated 31 December 2024, cold storage receives a credit-linked, back-ended subsidy of 40% of the eligible cost in general areas, and 50% in the North East and Himalayan states, scheduled areas, vibrant villages, and the Andaman & Nicobar and Lakshadweep islands. Earlier NHB guidelines quoted 35% for general areas, so if you are reading older material, check which version it refers to.
Two points matter here. First, “back-ended” means the subsidy is released after the project is completed and the loan has been disbursed, so you must fund the project through a bank loan and your own contribution first. Second, the subsidy is calculated on eligible cost as defined in the guidelines, not on whatever you actually spend. Storage capacity is measured by chamber volume, with 3.4 cubic metres (120 cubic feet) counted as one metric tonne.
Who can apply
The guidelines list individuals, groups of farmers, partnership and proprietary firms, self-help groups, farmer producer organisations, companies, corporations, cooperatives and marketing federations, local bodies, APMCs and state governments.
Approval comes before construction
NHB’s operational guidelines require an in-principle approval before you go ahead, and they fix a completion window counted from the first loan disbursement (18 months in the earlier guidelines, with a limited extension). A project that is started or funded before approval can lose its eligibility, which is why the order of steps matters as much as the scheme itself.
Route 2: Agriculture Infrastructure Fund (AIF)
AIF is a financing facility rather than a capital grant. It covers post-harvest management projects such as cold storage, warehouses and primary processing, and it works through banks.
- Interest subvention: 3% per year on loans up to ₹2 crore, for a maximum of 7 years, with the interest rate capped at 9%.
- Loans above ₹2 crore: the loan itself can be larger, but the interest benefit is limited to the first ₹2 crore.
- Credit guarantee: CGTMSE cover is available on eligible loans up to ₹2 crore, with the fee borne by the government, so collateral may not be required within that limit.
- Applications: made online through the AIF portal with a Detailed Project Report (DPR). One applicant can put up to 25 projects in different locations.
According to the Government’s August 2025 press note, AIF sanctioned 2,454 cold storage projects worth ₹8,258 crore up to 30 June 2025, so banks are familiar with these proposals. The same note describes a financing facility running from 2020-21 to 2032-33, with loan disbursement completing by the end of 2025-26. Check the AIF portal for the current position on new sanctions.
Other support that may apply
Integrated cold chain projects that link farm-level collection, storage and distribution may also fit under the PM Kisan SAMPADA Yojana (PMKSY), which supports temperature-controlled infrastructure through the Ministry of Food Processing Industries. Dairy-linked cold storage and chilling can look at AHIDF, and scientific godowns may look at the agricultural marketing infrastructure scheme. Whether these can be combined with MIDH or AIF depends on the scheme rules and on the bank, so this is a question for the planning stage, not after the loan is sanctioned.
Comparing the two main routes
| Point | MIDH / NHB | AIF |
|---|---|---|
| Type of support | Credit-linked, back-ended capital subsidy | 3% interest subvention plus CGTMSE guarantee |
| Benefit limit | Percentage of eligible cost under the guidelines | Interest benefit on loans up to ₹2 crore |
| Applies to | Horticulture cold storage | Cold storage, warehouses, primary processing and other post-harvest assets |
| Timing | Approval before you proceed; subsidy after completion | Loan sanctioned by the bank; online application with DPR |
How to plan a cold storage project step by step
- Fix the land first. Location, access for trucks, power availability and land use decide whether the project is workable and which support applies.
- Decide what you will store. Horticulture produce, dairy and processed food have different temperature and scheme requirements.
- Build the DPR and cost estimate. Banks and scheme agencies both work from it, so it should match the eligible-cost definitions in the guidelines.
- Structure the finance. Decide the split between your contribution, term loan and working capital, and check which subsidy or interest support fits that structure.
- Obtain approval before you begin. Keep construction, machinery orders and disbursement in the order the scheme allows.
- Complete the project and claim the subsidy. Keep invoices, completion papers and bank records ready, because claims are checked against them.
Common mistakes that cost projects their benefits
- Starting construction or buying equipment before the required approval.
- Arranging the loan without checking how it will interact with the subsidy.
- Assuming last year’s rates apply to this year’s application.
- Choosing a site before checking utilities, access and land-use permissions.
- Filing a DPR that does not match the eligible-cost norms in the guidelines.
Where Food Mitra fits
Food Mitra works on cold chain and warehousing projects through the sequence its clients follow, from Land, Loan and Subsidy. That includes project finance structuring and bank loan assistance and identifying the schemes that apply to your specific project. You can see the schemes we track on our Cold Chain & Warehousing page, and if your cold storage serves a dairy or food unit, the Dairy and Food & Agro-processing pages cover the related schemes. If you have a site and a rough project size in mind, you can talk to the Food Mitra team before you commit to a loan structure.
Frequently asked questions
Under the MIDH guidelines dated 31 December 2024, the credit-linked back-ended subsidy is 40% of eligible cost in general areas and 50% in North East, Himalayan and other notified areas. Earlier guidelines quoted 35%. The subsidy is worked out on eligible cost, not on actual spending, and it depends on the guidelines in force when you apply.
After. The MIDH / NHB subsidy is back-ended, so you fund the project with a bank loan and your own money, and the subsidy is released after completion and verification.
It depends on the scheme rules and on your bank. Some combinations are allowed and some are not, so confirm this during project planning rather than after the loan is sanctioned.
The 3% interest subvention applies to loans up to ₹2 crore, for up to 7 years. A larger loan is possible, but the interest benefit is limited to ₹2 crore.
Land is the first step in the project sequence, and banks and scheme agencies will ask for proof of the site, whether owned or held on a long lease. Confirm the exact requirement with your bank and the scheme guidelines for your project type.
The guideline periods quoted here ran to 2025-26 in the sources reviewed. Check the current status with your bank, the NHB and the AIF portal, or ask Food Mitra to verify it for your project before you begin.
Sources: MIDH Operational Guidelines 2025 (NHB); NHB capital investment subsidy operational guidelines; AIF portal FAQs; PIB note on the Agriculture Infrastructure Fund (August 2025).