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AGRI INFRA FUND

The Agricultural Infrastructure Fund (AIF) provides medium to long-term financing for projects such as cold storage, warehouses, grading and sorting units, primary processing centers, and supply chain facilities. By offering interest subvention and credit guarantee support, the scheme encourages farmers, cooperatives, FPOs (Farmer Producer Organizations), and agri-entrepreneurs to invest in modern agri-infrastructure. This initiative not only promotes value addition and efficient logistics but also strengthens rural economies by creating employment opportunities and enhancing market connectivity. Ultimately, AIF aims to make Indian agriculture more competitive, resilient, and sustainable, ensuring that farmers receive better returns and consumers have access to quality produce year-round.

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Description

Key features of the Agricultural Infrastructure Fund include: 

Financial support: The AIF provides financial assistance to various entities including farmers, farmer producer organizations (FPOs), agri-entrepreneurs, startups, agri-tech players, and other private sector stakeholders involved in agricultural infrastructure development.

Infrastructure development: The fund supports the creation and expansion of various agricultural infrastructure facilities such as cold storage, warehouses, sorting and grading units, packaging units, processing units, market yards, and transportation facilities.

Interest subvention: The AIF offers interest subvention on loans availed by eligible beneficiaries for setting up agricultural infrastructure projects. This helps in reducing the cost of borrowing and makes the loans more affordable.

Tenure and repayment: The tenure and repayment terms of loans availed under the Agricultural Infrastructure Fund are designed to be flexible, considering the gestation period and revenue generation cycle of the infrastructure projects.

Priority sectors: The fund prioritizes investment in infrastructure projects that focus on reducing post-harvest losses, improving supply chain efficiency, enhancing value addition, and promoting agricultural exports.

The Agricultural Infrastructure Fund is implemented by various financial institutions such as commercial banks, regional rural banks (RRBs), cooperative banks, and non-banking financial companies (NBFCs) in collaboration with the National Bank for Agriculture and Rural Development (NABARD) and other concerned agencies at the state and central levels. 

Overall, the Agricultural Infrastructure Fund plays a crucial role in modernizing and strengthening agricultural infrastructure in India, thereby contributing to the overall growth and development of the agriculture sector and improving farmers' income. 


Frequently Asked Questions

Browse practical answers curated by our CA and CS desks for AGRI INFRA FUND.

Purpose & Applicability
Key Requirements & Eligibility
Process & Compliance
Benefits, Risks & Best Practices

Purpose & Applicability

It is a government-backed financing facility aimed at promoting investment in post-harvest management infrastructure and community farming assets. The scheme provides long-term debt funding to boost agricultural productivity and reduce losses.

Eligible beneficiaries include farmers, agri-entrepreneurs, start-ups, farmer producer organisations (FPOs), self-help groups (SHGs), cooperatives, joint liability groups (JLGs), and state or central agencies.

The AIF was introduced to address the gap in agriculture infrastructure, minimize post-harvest losses, enhance value addition, and improve income for farmers by creating better market linkages.

Projects such as warehouses, cold chains, food processing units, sorting and grading facilities, primary processing units, and farm-gate infrastructure are eligible.

Key Requirements & Eligibility

Registered farmers, agri-business entities, FPOs, cooperatives, local bodies, and public or private sector entities involved in agriculture can apply.

Loans up to ?2 crore are eligible for a 3% interest subvention per annum. Credit guarantee coverage is also provided under the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

Applicants must submit project reports, registration certificates, land or lease documents, identity proofs, financial statements, and a loan sanction letter from a lending institution.

Yes, applicants can undertake multiple projects under AIF, provided each project meets the scheme’s viability and compliance criteria.

Process & Compliance

Applicants must prepare a detailed project report (DPR), approach an eligible lending institution, and apply through the official AIF online portal or via the lending bank.

Projects should generally be completed within 2–3 years from the date of loan sanction, depending on size and nature.

Beneficiaries must maintain transparent fund utilization records, provide regular progress updates, and ensure the asset is used strictly for its approved agricultural purpose.

Non-compliance may lead to withdrawal of financial benefits, recovery of subsidies, or disqualification from future assistance under the scheme.

Benefits, Risks & Best Practices

AIF offers interest subvention, improved access to finance, modern agri-infrastructure development, enhanced supply chain efficiency, and better income opportunities for farmers.

Common challenges include preparing detailed DPRs, ensuring creditworthiness, managing project timelines, and fulfilling post-loan documentation requirements.

Applicants should conduct feasibility studies, choose infrastructure aligned with crop type, maintain financial discipline, and engage professional consultants for technical and financial planning.

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