Kheti Se Industry Tak
In English: from the farm to industry.
Food Processing and Cold Storage Finance: Loans, Subsidies and Project Support
Want to process, pack or store produce, but the machinery, building and cold chain cost more than you can fund yourself?
Food processing and cold storage projects can combine a bank loan with central schemes that give a capital subsidy or interest subvention. Getting both right needs a sound project report, the correct licences and applications made in the right order. GRO-MSME helps you plan the finance, prepare the report and apply.
- PMFME subsidy35%, up to ₹10 lakh
- AIF interest subvention3% a year
- AIF loan limit for subvention₹2 crore
- Food licenceFSSAI
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GRO-MSME provides scheme mapping, project reports and application support through Early Grow Advisory Services Pvt Ltd. Loans are sanctioned by lenders and subsidies by the scheme authorities; neither is guaranteed.
How Can You Finance a Food Processing or Cold Storage Project?
Most food processing and cold storage projects are financed with a bank term loan for building and machinery plus a working capital limit for raw material, combined where eligible with central schemes. The PMFME scheme gives a 35% credit-linked capital subsidy, up to ₹10 lakh, to eligible micro food processing units. The Agriculture Infrastructure Fund gives 3% interest subvention on loans up to ₹2 crore for post-harvest infrastructure such as cold storages, warehouses and pack houses. An FSSAI registration or licence is required for food businesses.
Which Schemes Support Food Processing and Cold Storage?
The right scheme depends on the size of the unit, who owns it and what it does.
| Scheme | What it offers | Who it suits |
|---|---|---|
| PM Formalisation of Micro Food Processing Enterprises (PMFME) | 35% credit-linked capital subsidy on eligible project cost, up to ₹10 lakh per unit, plus training and handholding | Individual micro food processing units, SHGs, FPOs and cooperatives |
| Agriculture Infrastructure Fund (AIF) | 3% a year interest subvention on loans up to ₹2 crore for up to 7 years, with credit guarantee cover | Cold storages, warehouses, pack houses, sorting and grading units and similar post-harvest projects |
| Ministry of Food Processing Industries schemes | Grants for integrated cold chains, food processing units and infrastructure under its umbrella schemes | Larger and cluster projects; subject to open calls for proposals |
| National Horticulture Board support | Credit-linked back-ended subsidy for cold storages for horticulture produce | Cold storage projects meeting NHB’s technical standards |
| State food processing policies | Capital subsidy, interest subsidy and other incentives, varying by state | Units in states with an active agri or food processing policy |
PMFME was running on an interim extension to 30 September 2026, with a proposal for continuation, when this page was reviewed. Fresh sanctions under AIF were due to end in 2025-26. Check the official portals for the current status before planning around either scheme.
How Is Finance Structured, by Project Type?
1Micro food processing unit (pickles, spices, bakery, flour, snacks)
A term loan for machinery and premises works, plus a small working capital limit for raw material and packaging. Eligible units can combine this with the PMFME subsidy, which is credit-linked: the bank loan comes first. Our Krishna Yadav success story shows how far a small food business can grow.
2Cold storage
A term loan for the building, insulation and refrigeration plant, often with the AIF interest subvention and, where applicable, NHB or state subsidy. Lenders look closely at the location, the produce catchment, expected occupancy and storage rent.
3Pack house, ripening chamber, sorting and grading
Usually eligible post-harvest infrastructure under AIF. Lenders assess the produce supply tie-ups and the buyers or markets you will serve.
4Warehouse
Financed as a term loan against the project, with income from storage rent or your own trade. Warehouses for agricultural produce can fall under AIF.
5Packaging machinery and upgrades for an existing unit
A machinery loan or equipment finance, sometimes with state technology-upgradation support. See machinery and equipment finance and our article on biodegradable packaging.
Tell Us About Your Project
Share the product or storage capacity, location and estimated cost. GRO-MSME will call you back with the finance and scheme options.
- Free call back from GRO-MSME experts
- Eligibility check and document guidance
- Support from application to follow-up
Prefer to talk? +91-9811312259
Which FSSAI Registration Does Your Food Business Need?
Lenders and schemes ask for a valid FSSAI registration or licence. The category depends mainly on turnover and the type and scale of the business.
| Category | Usually for | Applied on |
|---|---|---|
| Basic registration | Petty food businesses with annual turnover up to ₹12 lakh | FoSCoS portal |
| State licence | Medium food businesses above the basic registration limit | FoSCoS portal (state authority) |
| Central licence | Large manufacturers, importers, exporters and businesses in specified categories | FoSCoS portal (central authority) |
Thresholds also depend on production capacity and activity. Confirm your category on foscos.fssai.gov.in. Early Grow’s FSSAI licence service can help you choose and apply.
What Documents Are Usually Required?
Lists vary by lender and scheme. Tick what you have.
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How to Get Started with GRO-MSME
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Share the project
Product or storage capacity, location, land, and estimated cost.
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Scheme and finance plan
We check which schemes the project may qualify for and in what order to apply.
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Project report
We help prepare a bankable project report with realistic capacity use and cash flows.
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Loan and scheme applications
We help you approach lenders and file on the scheme portals, then follow up.
What GRO-MSME Does, and What It Does Not Do
GRO-MSME helps you
- Map central and state schemes to your project
- Prepare project reports and loan applications
- Plan licences and registrations in the right order
- Follow up with lenders and scheme agencies
GRO-MSME does not
- Sanction loans or release subsidies
- Guarantee that a scheme will still be open when you apply
- Replace the technical approvals that some schemes require
Early Grow Advisory Services, which powers GRO-MSME, also covers farm and agri-business lending on its agriculture loan page.
Related GRO-MSME Services
Food Processing and Cold Storage Finance: Frequently Asked Questions
What is the PMFME scheme?
The PM Formalisation of Micro Food Processing Enterprises scheme, run by the Ministry of Food Processing Industries, gives eligible micro food processing units a 35% credit-linked capital subsidy on eligible project cost, up to ₹10 lakh per unit, along with training and handholding. SHGs, FPOs and cooperatives are also supported. Check the scheme portal for its current status.
Is there a subsidy for a cold storage loan?
Cold storage projects may get 3% interest subvention on loans up to ₹2 crore under the Agriculture Infrastructure Fund, a credit-linked subsidy from the National Horticulture Board for horticulture cold storages, and state incentives. Eligibility and the current status of each scheme must be checked before applying.
What is the Agriculture Infrastructure Fund?
It is a central financing facility for post-harvest and community farm infrastructure. Loans up to ₹2 crore get 3% a year interest subvention for up to 7 years, and credit guarantee cover is available for eligible borrowers. Projects include cold storages, warehouses and pack houses.
Do I need an FSSAI licence to get a food processing loan?
Food businesses need an FSSAI registration or licence, and lenders and schemes usually ask for it or for proof of application. The category depends on turnover, capacity and activity.
Can I get a food processing loan without collateral?
Some lenders offer collateral-free loans to eligible micro and small units with CGTMSE cover, and AIF provides credit guarantee cover for eligible loans. The decision rests with the lender.
What does a lender check in a cold storage project?
Lenders look at the location and produce catchment, capacity and expected occupancy, storage rent assumptions, technical specifications, land documents and the promoter’s experience.
Does GRO-MSME provide the subsidy?
No. Subsidies are sanctioned by the scheme authorities and loans by lenders. GRO-MSME helps with scheme mapping, the project report and applications.
Turn Produce into a Business That Lasts
Share your project, capacity and location, and we will map the finance and schemes that fit. Kheti Se Industry Tak — talk to GRO-MSME.
- Free call back from GRO-MSME experts
- Eligibility check and document guidance
- Support from application to follow-up
Prefer to talk? +91-9811312259