Cold Chain - Scope and Challenges

1. INDIAN COLD CHAIN INDUSTRY - SCOPE AND CHALLENGES
SYTEM SOLUTION ENGINEERING CONSULTANTS – GURGAON
ABSTRACT
India being a diverse climate country ensures the production of various varieties of fruits
and vegetables .
While geographically we have Jammu and Kashmir with a climate that culminates in the
production of Apples, Cherries , Apricots , saffron and various other vegetables and exotic dry
fruits we have state after state which can produce Bananas Peas , Tomato, Onions , Potato,
Okra , Ginger, Mango, Oranges and Hybrid variety of oranges, Papaya, Guavas , Cauliflower and
many more which are widely acceptable as daily needs in the present day market .
The production and the availability of land and climatic conditions that are naturally available
across the India makes it one of the places where these produces are grown and then
forwarded into the markets through a chain for the consumption . The chain has links but most
of the links in this chain and majorly the vital link COLD CHAIN LINK, important and necessary
is still not created well and functionally it is only crawling . To have an end to end benefit for
the purpose of growth at all levels as well as prosperity to the farmers at various levels the
focus has to be primarily shifted first on resolving the Pre harvest as well as Post harvest issues
and simultaneous connect to this linkage for major shift in the overall Agri or Horticulture based
industry .
The missing and vital link “THE COLD CHAIN LINK” has not been created despite lot of effort by
agencies involved in this sector and this has majorly resulted in broken linkages both at the
back end and the forward end . The holistic idea as to what route has to be taken for the
purpose of development of this vital and life line linkage has not been dissected so far and as
we usher into new centuries the concerns at the back end are become chronic and ever loosing
for the growers .
The private enterprise though somehow have managed to understand their need and created
facilities which are of nature which are required for their purpose , but the Policy initiative
have seen a fall due to not moving ahead with requirements which are required at basic levels
and integrate the “ THE TOTAL VALUE ADDED CHAIN TO RUN ACROOS THE COUNTRY” for
growth in exports / internal consumptions and reduce wastages which will bring in more
money than the agencies will exhaust in funding and subsidizing these projects for a greater
value in future .
The potential for growth in Indian Cold Chain Industry will only be converted into value if the
Initiatives are more clear , easy and fast tracked . This action will not only result growth at the
growers end but will simultaneously fuel the other related fields like Refrigeration Industry ,

2. INDIAN COLD CHAIN INDUSTRY - SCOPE AND CHALLENGES
SYTEM SOLUTION ENGINEERING CONSULTANTS – GURGAON
Retail Industry , Cold Logistics Industry and will bring lot of foreign companies into India to fund
and bring new technologies which are energy efficient .
GROWTH CYCLE AND DEVELOPMENT
The Indian cold chain industry is poised to grow and is expected to offer significant
opportunities for cold chain companies in the near future. India is an agricultural- based
economy. As per report published more than 55% of India’s land is cultivable, compared to the
global average of 11% each year. India produce 60 million tons of fruits and 130 million tons of
vegetables. India is also the largest producer of milk (more than million metric tons per year).
As per reports India produce 8 million tons of meat, as well as 7 million tons of fish a year. The
perishable product transaction volume is estimated to be around 300 million metric tons.
India has the potential to become one of the world’s major food suppliers, the country’s
inefficient cold chain network results in spoilage of almost 35~50 % of its total agricultural
productions. The total value of the cold chain industries as estimated through reports is
estimated to be in Billion of dollars and growing at 20-25 % a year .
The Indian farmer and producer is shifting from traditional farming to horticulture (fruits) ,
meat and poultry and dairy products, all of which are perishables. The fresh and processed
fruits and vegetable demands are increasing due to urban and rural populations rise and
change in consumption habits and easy access .Due to this increase in demand, diversification
and value addition are the key words in the Indian agriculture and horticulture sectors today.
These change along with emergence of an organized retail food sector and more conveniently
Application based businesses and spurred by changes to FDI Laws are creating opportunities in
the domestic food industry, which also include the cold chain sector.
India’s cold chain industry is still evolving, but for sure is operating below capacity and mostly
with cold storages at some point in the whole value chain which neither helps and actually
does not show major impact on reducing food wastage due to lot of effects these products
have to go before they reach us fresh and healthy .Most equipment in use are outdated and
single commodity based. According to government estimates, India has something about 5500
~6000 cold store facilities out of which most of have become defunct and redundant because of
old technology . The majority of these old store facilities are utilized for a single commodity,
such as potatoes and are located in North India . However everything is stored in these cold
storages without a thought on actual requirement for different products that have to be
adhered for the increased shelf life of produce . The temperature condition required is at
mercy of the cold storage owner who runs these facilities for minimum hours to strike a
balance between the earnings and operational expenses.

3. INDIAN COLD CHAIN INDUSTRY - SCOPE AND CHALLENGES
SYTEM SOLUTION ENGINEERING CONSULTANTS – GURGAON
MARKET ISSUES & OBSTACLES
The Agri market issues and obstacles keep on growing in a pattern which has spurred the
industry thinkers that Commercial Refrigeration is going to be big enough for large players to
come and settle in India with technology development .
We may be not wrong in projecting the Market potential but unfortunately year after year we
don’t seem to reach to the point we think of and going beyond seems unattainable .
We consider ourselves as an Agri based economy but the GDP bends towards service industry
and Agri is at third position as per current trends . This predominantly should be understood
that our PRODUCTIVITY is below par and we have not been able to develop the Produce to a
level and quality which will finally push the COLD CHAIN business and in turn add value to the
farmers in terms of valued domestic consumption as well give them understanding the benefit
of storing and operating in markets outside India which we predominantly categories as
EXPORTS .Needless to say Agri supply chain is poorly integrated . The gaps in the system
because of PRODCUTIVITY , POOR QUALITY , PROPER INTEGRTAION and Farm infrastructure
from the point of assessing the quality of produce that will be harvested up to the point when
it enters Mandi’s and to our houses is abysmal .
The development in the cold chain sector has been taken from a point where it is left mostly by
experts outside India . In general System Designs which is a complex subject is presently done
with respect to experience and the nature and type of business people are in and are not
designed with respect to application, produce requirement ,building plans , flexibility ,
serviceability, handling of produce etc etc.
Lack of manpower with appropriate skills to set up and handle modern technology is
absolutely missing . Backward linkages and forward linkages are misinterpreted and there is no
direction to retail which is essential part of forward linkages and is completely missing from the
concept of our cold chain link in terms of development .
The high capital cost of the cold chain projects is still seen as an investment and is seen as
investment which may take years to payback . There is absolute trust deficit , high cost of
power and ever rising power tariffs have made it even more vulnerable . While we may push
for renewable energy sources but the time it gets its foot hold there is no working principle to
engage farmers to this chain for value addition and redeem benefits and increase revenue
within country as well as exports .
Finally the transport suffers because of long haulages , inter state movement , taxation issues
and delayed deliveries which has the cascading effect on the entire system.