India’s growth in consumer demand for high-quality fresh food products has led to increased pressure on the country’s fragmented cold chain infrastructure.

Following the government’s liberalisation of the Indian cold chain industry in 2010, growth is forecasted to reach 28% CAGR in 2016 and a market size of US$13 billion by 2017 through increased investments, modernisation of existing facilities and establishment of new ventures, according to the Indian Chamber of Commerce (ICC).

However, it has been observed that the sector is not well-organised and operates below optimum capacity. Highly fragmented with more than 3500 companies in the entire value system, top tier companies contribute only 8%–10% of the cold chain industry market; and equipment in use is generally outdated and single commodity based, according to a report issued after the National Cold Chain Summit.

There were 5381 cold chain storages facilities in India at the end of 2015, with 95% of total storage capacity managed by private companies. Research by the ICC revealed that 36% of these cold storage units have a capacity of below 1000 metric tonnes.

65% of India’s cold chain storage capacity is contributed by the states of Uttar Pradesh and West Bengal; and less than 11% of that total is in cold storage.

India has about 250 reefer transport operators (mostly small and non-integrated firms) transporting perishable products. Less than 30,000 refrigerated vehicles currently ply the country, and about 80% of these are utilised for the transportation of milk and milk products. According to industry estimates, approximately 104 million metric tonnes of perishable produce is transported between cities each year, of which only four million metric tonnes is transported by reefer. The high cost of reefer transportation is a major challenge for the perishables market.

With rising food production and consumption, including meats and meat-based food products, India’s existing cold chain infrastructure is falling short in adequately addressing the country’s demand for high-quality fresh food products. Around 40% of the fruit and vegetable produce is wasted while moving from the grower to consumer, according to a report ‘India Cold Chain Market Forecast & Opportunities, 2019’ published by reportbuyer.

Besides the food industry, pharmaceutical and chemical industries in India are also creating significant need for expansion of cold chain services, including cold stores and temperature-controlled vehicles for transportation of vaccines and other medical products, in the country. Presently, the cold chain infrastructure in India relies on obsolete technologies, which mandates for its renovation or complete replacement.