Operational costs stifle PPP progress

Sharing his viewpoint, Nihar Parida, a Supply chain expert states as India’s cold chain logistic market witnesses growth, challenges and opportunities abound. Initiatives such as enhancing tracking technologies to nurturing public-private partnerships are instrumental in strengthening the cold chain infrastructure and meeting evolving market demands.

How is the emergence of PCM-based cold chain boxes impacting the logistics sector?

The India Cold Chain Logistics Market, estimated at USD 11.64 billion in 2024, will reach USD 18.19 billion by 2029, growing at a CAGR of 9.72 percent during the 2024-29 forecast period. 

Following the COVID-19 pandemic, increased awareness exists regarding cold chain infrastructure development. Previously, the Government of India’s (GOI) focus and incentives in this area were directed towards agriculture. However, there is now a shift towards pharmaceuticals, previously left to be managed by private players. During the pandemic, the GOI took cognisance of the lack of cold chain infra for Pharma. Due to high Investments and low returns, the market remains unfocused. However, with the entry of big players and growing consumer demand for temperature details, the cold chain logistics sector is opening up. 

The mid-mile and last mile—1mg and Pharmeasy delivery boys now require cold chain boxes, which has led to the emergence of the PCM-based cold chain box market. Additionally, a focus on reducing the use of thermocol is driving the demand for PCM-based reusable boxes. This market is poised to drive high growth in the agri-food and pharmaceutical markets.

How are solar-powered refrigerators shaping the future of cold chain logistics in India?

Today, we cannot track the cold chain at the box level. Our major Polio Vaccine campaigns lack proper control. The Asha workers carrying cold chain boxes remain untracked. The technology currently being looked at involves IoT devices at the box level. These can track real-time location, temperature, humidity, box opening times, and impact details. In addition, companies are developing small active cold chain boxes. Some have already introduced small cold-chain refrigerators charged with solar power. With incentives for solar energy, small dispensaries in rural areas can easily store vaccines, increasing our immunisation percentage from 65 to 99 percent.

Please talk about initiatives needed to propagate cold chain business in India.

With a lot of Government of India (GOI) initiatives such as the Mission for Integrated Development of Horticulture, National Horticulture Mission (NHM), Horticulture Mission for North East and Himalayan States (HMNEH), and others, there are challenges in achieving high returns on investment in the cold chain sector. National Horticulture Board (capital investment subsidy for construction, expansion, modernisation of cold storages and storages for horticulture products), Pradhan Mantri Kisan SAMPADA Yojana, Mega Food Parks with Cold Chain, Scheme for Integrated Cold Chain, Value Addition and Preservation Infrastructure, Small Farmer Agri-Business Consortium (SFAC) Assistance, etc., are the other more  Initiatives.

Private players are increasingly involved in Public-Private Partnership (PPP) models. However, operational expenses like power tariffs and operating issues still need to be solved, making it hard to pass on costs. The government’s solar power scheme is a positive step, but the bottleneck is that state governments are not providing the extra power cost passed on to the grid. This can result in big cost reductions. 

The Media can play a role in educating the masses about the importance of cold chains in food and pharmaceuticals. Today, the masses are unaware of the significance of the cold chain. In fruits and vegetables, we still believe cold food is not fresh, but it is the opposite. As in urban areas, we eat vegetables and fruits which have already stayed at Normal temperature for 2-3 days and have lost their nutritional value. However, the cost of transporting these items via cold chain remains high.  I am sure the moment EV comes, the costs will also come down.