The retail industry in India is getting more organized and an increase in demand for processed food is contributing to the growth of food processing industry, according to Research and Markets report entitled Cold Chain Market in India 2014-2018.
The outlook for the cold chain market in India looks promising with government-friendly policies pertaining to foreign direct investment and the creation of mega food parks.
The creation of a cold chain infrastructure is a capital-intensive project, which requires a substantial amount of investment.
The investment risk is too large to be borne by any single player because of the low utilization of capacity in the initial phase.
The participation of private players will scale up the investment required to set up cold storage facilities.
In addition, the government’s participation will enable the smooth and seamless setting up of cold chains.
The Food Corp. of India is hiring cold storage warehouses from the private sector to address food wastage and the scarcity of cold storage.
State initiatives are also adopting the public-private partnership model.
For instance, Karnataka has set up cold storage facilities by partnering with KAPPEC and Ken Agritech.
However, the report states that the lack of logistical and infrastructure support is one of the major challenges and it results in high operational costs.