§1What this business is
A large cold warehouse where potatoes (or fruit and vegetables) are kept for months; farmers and traders pay rent per kg. It is a rental model — the goods are theirs, the rent is yours. For potatoes it stays full for 8 months and empty for 4 months.
Capacity: 2,000 MT, single temperature zone, potato.
§2Is it right for you?
Who it is for
Someone with land in the potato belt, ₹1.5 Cr+ arranged, and a good name among traders and farmers.
Who it is not for
A small first-time entrepreneur — both the capital and the technical risk are large.
Advantages
- UP is the largest potato producer — demand is assured
- Rental model — the price risk on the goods stays with the farmer
- Long-life asset
- Large subsidy under NHB/MIDH
Drawbacks
- Very large capital
- Electricity cost, and the risk of goods rotting during power cuts
- Empty for 4 months
- Many areas already have more cold storage than needed — pressure on rent
Skills you need
- Understanding of refrigeration
- Storage management
- Dealing with farmers and traders
- Power and backup planning
Why difficulty 5/5: Capital in crores, a technical system and power risk.
§3Market
Who buys
- Potato farmers
- Traders and wholesalers
- Farmers keeping seed potato for the next crop
How it sells
- Rent charged per kg of stored produce for the season
Good to know
- The Bihar model DPR (2,000 MT) charges ₹2.85 per kg for an 8-month potato season; the store is mostly empty for the other 4 months.
- More than 15% of potatoes go to waste for lack of cold storage (Bihar model DPR).
- Plant and machinery is ₹34.45 lakh, or ₹38.58 lakh with 5% transport and 7% insurance (Bihar model DPR).
- NHB cost norm for a basic single-zone (Type 1) cold store is ₹8,000 per MT up to 5,000 MT; multi-zone (Type 2) is ₹10,000 per MT.
§4Raw material & machinery
| Item | Qty | Cost |
|---|---|---|
| Refrigeration units, insulation, air circulation, temperature and humidity monitoring, pallet racking, ventilation and fire suppression (lump sum) | 1 | ₹10.00 lakh |
| Silent diesel generator set, 320 kVA, 3-phase | 1 | ₹16.00 lakh |
| Transformer, 630 kVA, 11/0.433 kV, oil-cooled (IS-2026) | 1 | ₹8.30 lakh |
| Water pump motor, 1.5 HP shallow-well jet pump | 1 | ₹10,000 |
| PVC garden hose pipe, 30 mm | 50 kg | ₹4,650 |
From: Directorate of Horticulture, Govt of Bihar – Model DPR: Cold Storage Type-I, 2000 MT (Potato) (2023)
- Potatoes stored by farmers and traders (no raw material is bought)stock comes from UP, West Bengal and local farms; farmers also store seed potato
From: Directorate of Horticulture, Govt of Bihar – Model DPR: Cold Storage Type-I, 2000 MT (Potato) (2023)
Suppliers in Building Business Bazaar
Bombay Ammonia · Delhi →Guru Nanak Refrigeration Corporation · Delhi →Sunder Singh and Sons · Delhi →
In our raw material database
§5Licences & registration
- UP Cold Storage registration/licence (Horticulture Dept)
- FSSAI (storage)
- Fire NOC
- Electrical safety / lift inspection
- Factory licence
- UPPCB consent (ammonia/refrigerant)
§6Schemes & subsidies
- NHBCentralActive35% back-ended subsidy
- AIFCentralUnclear3% interest subvention, up to ₹2 crore
- CGTMSECentralActiveNo collateral, up to ₹10 crore
- Stand-Up IndiaCentralClosed₹10 lakh – ₹1 crore loan
NHB/MIDH capital subsidy (credit-linked, 35% general area); AIF gives a 3% interest subvention on loans up to ₹2 Cr — cold storage is directly eligible; CGTMSE/Stand-Up India on the loan side.
§7Money
How the investment is worked out: Min = Bihar Horticulture model DPR total project cost ₹1,31,24,188 (civil ₹85.85 L, site dev ₹3.12 L, P&M ₹38.58 L, furniture ₹1.69 L, pre-op ₹2.00 L; no working capital). Max = MIDH/NHB cost norm ₹8,000/MT × 2,000 MT = ₹1.60 Cr (norm quoted in the same DPR and in NHB cost norms).
Working capital: Working capital is nil in the DPR — rental model; electricity and staff cost ~₹32 L/year.
DPR 2023 (BCD SOR 2022 rates); NHB norm document 2015. The DPR understates the refrigeration cost — get a real quotation.
§8Export potential
Confirm the HS code in the DGFT ITC(HS) lookup before you export
Export council / board: APEDA
- A cold store sells storage space, not goods; export applies to the produce its customers keep in it.
- Fresh potatoes fall under APEDA's Fruits & Vegetables group.
§9Risks — where people fail
- Power failure/spoilage
- Over-capacity in region
- Rent rate pressure
- High fixed cost
§1030 / 60 / 90-day plan
A general plan that applies to any business. A plan for this business will be added after research.
- Days 1–30: Visit a working cold storage (potato, 2000 mt) unit, ask 10 buyers about price and quantity, and get quotations from 3 suppliers.
- Days 31–60: Udyam and the licences you need (UP Cold Storage registration/licence (Horticulture Dept), FSSAI (storage)), a project report (DPR), and the scheme or loan file.
- Days 61–90: Space and machines, trial production, and first deliveries to 10 customers.
§11Who to connect with
Associations, clusters and training institutes — the directory is being built. Connect
§12Watch
There is no episode on this business yet. Shows are coming soon on the Podcast page.
Want to start Cold Storage (Potato, 2000 MT)?
DPR, loan file or registration — ask us on WhatsApp.
¶Sources
- Directorate of Horticulture, Govt of Bihar – Model DPR: Cold Storage Type-I, 2000 MT (Potato) (2023)
- National Horticulture Board – Cost Norms and Pattern of Assistance (MIDH, XII Plan) (2015)
Data review: 6 October 2026. Spotted a mistake? Report it. For information only — not legal or financial advice.