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Published on June 1st, 2017 | by Guest

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How is Indian cold chain an emerging industry?

It should be noted that Indian cold chain management is upcoming owing to the fact of India being the largest consumer of food and the thirdlargest producer of agriculture in the world. The food processing industry itself covers around 32% of India’s complete food industry and about 13% of exports from India.

However, execs at Gati Logistics believe that markets or farmers are often subject to inefficiencies of the supply chain and the lack of cold storage logistics. With the right cold storage solutions for the country, a lot is achievable in the food distribution and marketing networks.

Indian cold storage market potential

The earliest cold storage in the country appeared in in 1892 in the city of Kolkata. However, growthin this sector did not show up until the 1960s onwards. In 1964 the Cold Storage Act was passed.

As per studies by Gati logistics, India holds a great promise for the use of cold storage and supply chains with the food processing industry putting in 1.5%into the GDP anda huge amount of perishable farm produce, such as fruits and vegetables holding promise of good value addition to the output.

Current Status

There are several ways in which cold chain products can be transported in cold storage. This includes refrigerated trucks, railcars, refrigerated cargo ships, and lastly Air cargo. The cold chain sector in India is a mixture of surface storage and refrigerated transport. The Indianindustry has shown 20% of growth in the past 3 years, as per CAGR. Amongst these cold storages deliverthe main revenue as part of the cold chain industry.

As of now, there are 6,300 cold storages in India. There is an installed capacity of 30.11 million metric ton. In the past decade, growth has averaged 3 to 4% with the private sector leading in ownership and public sectors standing at around 10%.

Currently the following food industry parameters have been driving the growth of the cold chain industry:

  • India ranks first in global milk production at 138 million tons/ annum output. India is also home to more than half milk processing units.
  • In vegetable output, India ranks second in the world at around 280.4 million tons.
  • Fish and meat industries that are cold chain intensive have shown constant growth.

Future Prospects

The future prospects of cold chain logistics cold storage are bright. This is owing to the high number of global food retail chains that will be targeting the markets in India.In addition, an upcoming FDI will happen in the world of Indian retail.Besides, the Indian government is also in the process of pushing forward the food safety and security bill that is going to generate more cold storagedemand in the country.

There is also going to development in existing roadways and railway infrastructure and development in the current lifestyle of the consumers across the country.

Under these circumstances, it is expected that the Indian cold chain industry will grow 28% (CAGR) in the next 3 years and approach a market size of $13 billion.

It should also be noted that all good supply infrastructures dealing with fruits and vegetables have at their centre a highly effective cold chain. An area that is traditionally ignored in India.

Development of cold chain in India will lead to a huge push for the whole economy can be generated by generating this segment.

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