Mint Explainer | Why India needs to ramp up its food grain warehousing capacity

What is India’s current food grain storage capacity?

The total food grain storage capacity in India—in both the public and private sectors—is about 87 million metric tonnes, with facilities concentrated primarily in the north and west.

India uses two types of food grain storage systems: covered storage such as traditional godowns and modern silos and open storage, known as covered and plinth (CAP). While most grains are stored in covered facilities, CAP is used when additional space is required. Food grains in CAP are stored on elevated plinths and in wooden crates.

The Food Corporation of India (FCI) buys grains such as paddy and wheat from farmers, mainly in production-surplus states such as Punjab, Haryana, Uttar Pradesh and Madhya Pradesh. The procured grains are stored in owned and hired facilities. The total food grain storage capacity, including CAP, with FCI stood at 44.34 million tonnes as on 30 June.

What is the estimated requirement for food grain storage capacity by 2030?

Ramesh Chand, a member of Niti Aayog, said warehousing requirements will far outpace food grain production growth, making it crucial to prioritise the quality of storage. According to the Working Group report on Crop Husbandry, Agriculture Inputs, Demand and Supply 2024 prepared by Niti Aayog, food grain production is set to increase to almost 368 million tonnes by 2030-31, following improvements in cropping intensity and yield. Rice and wheat will remain the dominant crops.

The output increase generates a significant storage capacity deficit estimated at 69 million metric tonnes by 2030, according to a report by the PHD Chamber of Commerce and Industry. The food grain warehousing market, valued at ₹37,336 crore in 2025-26, is projected to grow to ₹43,953 crore by 2030-31.

This expansion positions India for a multi-crore-rupee opportunity, fuelled by PPP-based silo projects, rising buffer stock requirements and the involvement of private companies.

Why must India ramp up its food grain warehousing capacity?

Warehousing is needed to sustain buffer stocks of grain to support the growing requirements of the Public Distribution System and to maintain price stability of food, which is a major portion of household consumption expenditure.

As production rises, there is a need to ensure safe storage of the larger volumes of grains procured. Strengthening storage and post-harvest systems is a necessity to safeguard food security, boost farmer incomes and cut avoidable losses. Without significant expansion, the gap between output and storage availability will widen, leading to higher risks of wastage, spoilage and distress sales for farmers.

A stronger warehousing network is critical to ensure the long-term sustainability of procurement operations by the FCI and state government agencies. At present, storage assets are unevenly distributed, with most capacity concentrated in the northern and western states.

As procurement increases in the eastern and central regions under initiatives such as crop diversification and decentralized procurement, the lack of modern warehouses will restrict efficient handling and distribution.

“Currently, warehouses are at consumption centres. They are not in the villages or near production centres, so there is a gap. In such a scenario, easy financing for construction will give a fillip to this sector," said Amit Agarwal, chief executive officer and co-founder of StarAgri Warehousing & Collateral Management Ltd, which maintains a storage capacity of about 5 million tonnes.

Which key private companies operate in this space?

Adani Agri Logistics, Globus Warehousing, LT Foods, StarAgri, NCML (a Fairfax India company) and Keventer Agro are among the key private companies in silo construction, warehousing and collateral management, frequently working in collaboration with government agencies.

These companies operate across verticals, including conventional warehousing, steel silo construction, collateral management, digital grain tracking and logistics.

What challenges does the sector face?

The sector faces hurdles such as limits on the height of storage stacks, disputes over inflation-linked contract clauses, and the lack of trained staff. Private warehouses struggle with limited revenue streams, seasonal underuse and difficulties in securing credit or using warehouse receipts.

While government schemes, including Private Entrepreneurs Guarantee, Agriculture Infrastructure Fund and public-private partnership silo projects, have strengthened the policy environment, further reforms in contracts, land access and financing are needed to fully unlock private investment, according to experts.

They are of the view that the future of India’s grain management will be shaped by advanced technologies such as climate monitoring based on Internet of Things, automated quality labs and blockchain for end-to-end traceability.

“In the foodgrain warehouse sector, a gap exists in terms of actual capacity required and peak capacities. There is a need to lay thrust on digitization of the entire warehousing process, integrating private and public warehousing capacities, minimising warehousing losses and creating a resilient and adaptive system of warehousing," said Ajay Kakra, leader—food and agriculture at Forvis Mazars, which provides audit, assurance, tax, advisory and consulting services globally.