Experts at the ASSOCHAM summit argue India must pivot from simply building more cold storage units to enhancing connectivity and tech integration. With post-harvest losses stagnant at $18.5 billion annually, the sector is prioritizing operational efficiency and standardized logistics to reduce waste and improve viability.
India's cold chain sector is re-evaluating its growth strategy as industry experts at the recent ASSOCHAM summit called for a fundamental pivot from mere storage volume expansion to improving operational capability. Despite the country having over 40 million tonnes of cold storage capacity, post-harvest food losses continue to hover around $18.5 billion annually. This gap highlights that building new warehouses alone is not solving the logistical challenge of preserving produce from the farm to the consumer.
The sector currently operates in a highly fragmented environment where only about 4% of perishable produce flows through organized cold chain networks. With cold storage capacity projected to grow at a slow 2.2% annual rate through 2031, stakeholders are emphasizing that future growth must be driven by technology, standardized processes, and better end-to-end integration rather than just increasing square footage. The move toward formalization is expected to focus on multi-temperature and multi-product facilities that can handle diverse produce types efficiently.
For investors and market participants, the sector presents distinct operational challenges that impact financial performance. High energy costs remain a critical pressure point, with electricity typically accounting for nearly 10% of total operational expenses. Furthermore, the industry faces regional disparities, as over 60% of the country’s existing capacity is concentrated within only 10 states. This concentration creates a significant need for infrastructure development in under-penetrated regions. Additionally, a persistent shortage of skilled personnel trained in modern refrigeration engineering and temperature monitoring poses a risk to project execution and long-term business viability.
The strategic path forward involves synchronizing private investments with government-led multimodal logistics parks near major transport hubs. Institutional support, such as tailored financial products from lenders like the State Bank of India, is increasingly directed toward upgrading plant machinery, implementing IoT-enabled temperature controls, and ensuring compliant working capital. The key monitorable for the industry over the coming years will be the rate of adoption of these efficiency-driven technologies and the speed at which the market transitions from small, unorganized operators to formal, integrated players.