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India's Cold Chain Gap: Billions Lost Annually
14 Aug
Summary
- India loses 50 million tonnes of horticultural produce annually.
- Cold chain infrastructure handles only 4% of India's produce.
- Halving losses could add $4.5 billion to India's GDP annually.
India annually suffers substantial losses, with nearly 50 million tonnes of its 355 million tonnes of horticultural produce going to waste. This post-harvest wastage represents a significant economic issue, valued at approximately Rs 1.5 lakh crore ($18.5 billion).
The primary cause identified is the severe deficit in cold-chain infrastructure. While the US utilizes cold chains for 80-85% of its produce, India only processes about 4%. This deficiency leaves a large volume of perishable goods vulnerable to spoilage.
To bridge this gap, a 10-year tax holiday for cold-storage infrastructure has been proposed to spur private investment, including from MSMEs. This fiscal incentive aims to accelerate capacity building.
Reducing fruit and vegetable losses by half could inject around Rs 37,400 crore ($4.5 billion) into the economy annually, boosting agricultural value added by 0.8 percentage points. The proposed tax holiday might cost the government Rs 5,000-7,500 crore in foregone revenue yearly, presenting a trade-off between immediate tax collection and long-term economic gains.
