The Government of India has introduced a series of financial incentive schemes to encourage cold chain development. Over the past decade, India has continued to substantially liberalize its foreign trade policy. Today, foreign direct investment (FDI) is allowed in almost all sectors. In 2006-2007 alone, FDI in India hit USD $9.3 billion. FDI up to 100 percent equity is permitted under the automatic route in food and infrastructure like food parks and cold chains.
Also, investments in cold chain infrastructure could be given a 10-year tax holiday under section 80 1A of the Income Tax Act.
However, there have been instances where government incentives have actually compounded the cold chain issues the country faces. For example, the NHB report suggested that because government schemes do not include design specifications, the primary criteria for constructing a cold store is to construct the facility at the lowest possible cost in order to maximize immediate gains. This not only compromises design standards, but increases inefficiencies in the cold chain.
Foreign government agencies, such as the U.S. Department of Agriculture, are also developing programs to help foreign investors break in to the Indian market. Recently, USDA supported a Cold Storage Short Course that GCCA held at Amity University in New Delhi, India.
For more information about the Indian cold chain, contact Atul Khanna at firstname.lastname@example.org.
Atul Khanna is the Dir. of the Global Cold Chain Alliance (GCCA) India Division and principal of i2i Consulting in New Delhi. Tori Miller Liu is Dir. of Information Systems for GCCA and contributor to COLD FACTS magazine. The full-length version of this article was originally published in the May-June 2009 issue of COLD FACTS, a bimonthly GCCA membership publication focusing on cold chain trends and best practices. To learn more about COLD FACTS or how to join GCCA, visit www.gcca.org/membership or contact email@example.com or (703) 373-4300.