State of the economy podcast. Why is India’s cold chain industry still in a nascent stage?

In this state of the economy podcast, TE Raja Simhan speaks to Ravichandran Purushothaman, the President of Danfoss India, on the link between Cold chain industry and the logistics sector.

Ravichandran Purushothaman, the President of Danfoss India, has emphasised the transformative potential of the cold chain industry in India, recognising it as a crucial element in the nation’s food supply chain. Despite its significance, Purushothaman points out that “the cold chain industry in India is still in its nascent stage with a penetration rate of only 7-8%, which is significantly low compared to countries like the US and China with penetration rates between 60-80%.”

Purushothaman underscores the broad importance of cold chain logistics, noting that they are “not just about storing food; they are crucial for vaccines, pharmaceuticals, and animal husbandry, making it a vital yet underappreciated sector.” This multifaceted importance highlights the need for a robust cold chain infrastructure to ensure the safe and efficient delivery of a wide range of perishable goods.

A significant challenge that Purushothaman identifies is the difficulty in connecting production centres with consumption centres. He states, “Connecting production centres with consumption centres is a major challenge due to disconnected supply chain models and low market linkages.” Addressing these challenges is essential for the development of an efficient cold chain system.

Purushothaman is optimistic about the growth potential of the cold chain market in India. He projects that “the cold chain market in India, currently valued at around $350 million, could grow to $1.2 to $1.4 billion by 2028, driven by increasing per capita income, changing lifestyles, and a rising demand for processed and nutritious foods in urban centres.” This expected growth indicates a significant opportunity for investment and development in this sector.

To achieve this potential, Purushothaman advocates for a collaborative approach between the government and the private sector. He suggests that “the government should play an enabling role by providing basic infrastructure and encouraging private sector participation. Successful models in the pomegranate, mango, and dairy industries show the significant contributions private players can make to the development of the supply chain.” This collaboration could create a more integrated and efficient cold chain system, benefiting producers and consumers alike.

Listen in!

Host: TE Raja Simhan; Producer: Anjana PV

About the State of the Economy podcast

India’s economy has been hailed as a bright spot amid the general gloom that seems to have enveloped the rest of the world. But several sectors continue to stutter even as others seem set to fire on all cylinders. To help you make sense of the bundle of contradictions that the country is, businessline brings you podcasts with experts ranging from finance and marketing to technology and start-ups.