India’s food supply chain is one of the most expansive and complex in the world, feeding a population of 1.4 billion through an intricate network of farmers, intermediaries, processors, and retailers. Despite being a global leader in food production, inefficiencies across the chain—ranging from poor infrastructure and cold storage shortages to fragmented market access—lead to massive post-harvest losses and food wastage.
This article explores the key components of India’s food supply chain, identifies major discrepancies that hinder its performance, and highlights promising solutions—such as government schemes, digital tools, and startup innovations—that can transform it into a more resilient and efficient system.
When we think of the supply chain in food production, we often picture a straightforward sequence: production → processing → preservation → marketing → consumption. However, the reality is far more complex, involving intricate systems and procedures designed to ensure the safe, timely delivery of food with minimal wastage.
With a population of 1.4 billion, India’s food supply chain is not only vast but also highly intricate—encompassing small-scale farmers, a wide network of intermediaries, and retailers operating across both urban and rural regions. This complex system plays a critical role in ensuring food security and makes India home to one of the most significant and challenging supply chains in the world.
Despite being the world’s second-largest producer of fruits, vegetables, and milk; the fifth-largest producer of eggs; and the sixth-largest producer of fish, inefficiencies persist. A fragmented supply chain and the lack of adequate cold chain infrastructure result in significant losses and reduced overall efficiency.
With its vast and intricate supply chain, India’s food ecosystem involves numerous stakeholders and interconnected stages that work together to deliver food from farms to consumers.
Let’s take a closer look at each component of this system — and explore the key challenges and gaps that continue to affect the efficiency and equity of India’s food supply chain.
Production: Indian farmers form the backbone of the food supply chain, producing a diverse range of crops such as rice, wheat, pulses, fruits, and vegetables. However, both small and large-scale farmers face persistent challenges. These include limited access to modern farming techniques, irrigation infrastructure, quality seeds, fertilizers, and pesticides. In addition, issues like fragmented landholdings, volatile market prices, and unpredictable weather conditions often go underrepresented in mainstream discussions yet significantly impact productivity and livelihoods.
One of the most persistent challenges faced by Indian farmers is the sale and distribution of their produce. Middlemen—such as traders, agents, and wholesalers—play a central role in the food supply chain, connecting farmers to markets and distributors. These intermediaries purchase produce directly from farms and transport it to mandis, urban warehouses, and other distribution hubs.
While they facilitate the movement of agricultural goods across the country, the role of middlemen has long been debated. They often claim a substantial share of the profits, leaving farmers with minimal returns. Due to limited direct access to markets and a lack of bargaining power, many farmers are forced to depend on these intermediaries, putting them at a significant disadvantage during price negotiations.
Retail and processing: After produce is acquired by middlemen, it moves further along the supply chain to reach processors, retailers, and ultimately, consumers. The food processing sector plays a vital role in adding value to raw agricultural products, while also ensuring their preservation, packaging, and market readiness. This includes a wide range of activities—from milling grains and extracting oils to manufacturing packaged snacks and beverages.
India’s retail landscape is diverse, spanning traditional markets such as local vendors and kirana stores, as well as modern retail formats like supermarkets and growing e-commerce platforms. Together, these channels serve millions of consumers each day.
However, this vast distribution and processing network faces critical challenges. One of the most pressing issues is food wastage, largely due to inadequate storage infrastructure, especially cold chain facilities. The absence of sufficient temperature-controlled logistics leads to significant spoilage of perishable items before they can reach the end consumer, undermining both farmer incomes and food security.
Commenting on the current scenario in food supply chain, Abhilash Amule, CEO and Founder of ReeferON Supply Chain Solution Pvt Ltd says –
“In the evolving quick commerce landscape, where 10–15-minute deliveries are becoming the norm, convenience and speed are no longer enough—consumer trust in product quality is now critical. While we’ve made strong progress in improving delivery reliability, the next step is prioritizing “Moral Compliance”—going beyond regulatory standards to embed ethical values across the value chain. This includes ensuring proper storage conditions in dark stores, fair treatment of store staff, and safe, respectful working conditions for delivery partners. Every element of the process should reflect a commitment to quality and ethics. By doing so, we not only meet customer expectations but also build long-term trust and accountability across our operations.”
Minimum support price: One of the most prominent policy tools supporting Indian farmers is the Minimum Support Price (MSP), which guarantees a fixed price for select crops. Acting as a financial safety net, MSP ensures that farmers receive a minimum income for their produce, shielding them from volatile market fluctuations.
While the MSP has offered crucial support to many, it has also drawn criticism. Critics point out that it disproportionately benefits growers of staple crops like rice and wheat, leaving those cultivating fruits, vegetables, and coarse grains with limited protection. Moreover, the scheme has been linked to unintended consequences such as the overproduction of water-intensive crops, particularly rice, in regions already facing water scarcity—raising serious concerns about long-term environmental sustainability.
Beyond these major challenges, the food industry grapples with several additional issues that hinder its ability to effectively nourish the nation, these include:
Inadequate Infrastructure: Many regions in India, especially rural areas, suffer from poor road connectivity and limited logistical support. This hampers the efficient transport of food from farms to markets. In the case of perishable items such as fruits, vegetables, and dairy products, delays in transportation often lead to significant spoilage and wastage, impacting both farmers’ incomes and food availability.
While highlighting crucial hinderances in India food supply chain, Manvendra Pandey, Co-founder and Partner, Heaven of spices and herbs (HoSH) and an Agri entrepreneur says –
“India’s food supply chain is in a real pickle. Farmers are struggling with high waste, poor infrastructure, and inefficient middlemen, which means they’re losing money and consumers are paying more. Despite promising agritech solutions, these issues have been tough to fix because of a few factors. Tech doesn’t always meet farmers’ real needs, often because it’s too expensive, people in rural areas don’t know how to use it, and they don’t have access to reliable data and the internet. Farming is also small-scale, making it hard to reach smallholder farmers, and traditional communities are resistant to change. So, agritech innovations haven’t been widely adopted or scaled up.”
Lack of Cold Storage Facilities: India is one of the world’s largest producers of fresh food, yet a significant portion of this produce is lost due to inadequate refrigerated storage and transportation infrastructure. The shortage of cold chain facilities results in high post-harvest losses, forcing farmers to either sell their produce at distress prices or watch it perish. Strengthening the cold chain through better road connectivity and increased investment in cold storage infrastructure could greatly enhance the efficiency and reliability of the food supply chain.
Food wastage: An estimated 40% of food produced in India is wasted, primarily due to inefficiencies across the supply chain, inadequate storage, and transportation challenges. Food loss occurs at multiple stages—on farms due to overproduction or inefficient harvesting practices, during transit because of poor logistics and infrastructure, and at markets or retail outlets due to mismatches between supply and demand or lack of proper inventory management.
Keeping up with regulatory standards: The Indian food supply chain must meet strict regulatory standards to ensure safety and quality. While essential, these regulations often challenge small farmers and businesses lacking resources or awareness. Compliance with FSSAI norms, quality certifications, and export rules can be costly and complex, involving testing, certification, and procedural adjustments. For many small producers, the burden of paperwork and regulatory red tape becomes overwhelming, limiting their ability to access broader markets or scale operations despite producing safe, quality food.
Climate change: Climate change poses a major threat to India’s food supply chain. With agriculture heavily reliant on monsoon rains, disruptions in rainfall patterns—such as floods, droughts, or unpredictability—can drastically reduce crop yields. Rising temperatures also impact crop and livestock health, lowering productivity. Farmers are witnessing changes in growing seasons and crop patterns, forcing them to adapt. However, smallholders often lack the resources and technology needed for climate-resilient practices, leaving them especially vulnerable to the adverse effects of a changing climate.
According to Sanjay Pal, a supply chain and logistics consultant –
“Beyond logistics, the real concern lies in the glaring gaps in food safety and governance. Alarming reports of adulterated paneer and unhygienic storage at major e-grocery hubs reveal the daily risks faced by consumers. The way forward is clear—strengthen cold chain infrastructure, enable easier market access through digital platforms like e-NAM, empower Farmer Producer Organizations (FPOs), and enforce robust food safety regulations. Reimagining India’s food supply chain isn’t just about curbing wastage—it’s about empowering farmers, safeguarding food quality, and securing a more sustainable future.”
India’s food supply chain discrepancies can be effectively addressed through the integration of modern technology, improved infrastructure, and the active involvement of startups. Digital tools like blockchain, IoT, and AI enhance traceability, streamline inventory management, and enable real-time decision-making across the supply chain, reducing post-harvest losses and increasing transparency. Startups play a vital role by offering tech-enabled solutions for cold storage, route optimization, demand forecasting, and direct farmer-to-market linkages. Many startups like NinjaCart and Cropin are developing digital platforms that bridge gaps between farmers, suppliers, and retailers, ensuring timely delivery and better price realization. Moreover, centralized market systems and government initiatives can further empower small-scale producers. Startups often bring agility, innovation, and customized models that are scalable and inclusive. Their efforts, supported by policy reforms and farmer training, can collectively build a more resilient, efficient, and sustainable food supply chain across India.
To boost the food supply chain and to address the discrepancies, the government introduced the Central Sector Scheme, SAMPADA (Scheme for Agro-Marine Processing and Development of Agro-Processing Clusters), which was launched in May 2017 with an initial allocation of ₹6,000 crore. Its continuation as the Pradhan Mantri Kisan SAMPADA Yojana (PMKSY) has been approved with an outlay of ₹4,600 crore until March 31, 2026.
As of February 28, 2025, the Ministry of Food Processing Industries (MoFPI) has approved 1,608 projects under various components of PMKSY, including 41 Mega Food Parks, 394 Cold Chain projects, 75 Agro-processing Clusters, 536 Food Processing Units, 61 projects for Creation of Backward & Forward Linkages, and 44 Operation Greens initiatives. A total of ₹6,198.76 crore has been disbursed as grants or subsidies since the scheme’s inception.
PMKSY aims to:
India’s agricultural sector is on a promising growth trajectory, supported by rising exports, improved horticultural output, and a strong push toward sustainable practices like organic and natural farming. The sector has seen a 1.15% increase in horticulture cultivation area in 2023–24, with production reaching 355.25 million tonnes, driven by better infrastructure and post-harvest management. Large-scale vegetable production clusters near major consumption centers are also being developed to boost efficiency and reduce transit losses.
Looking ahead, India’s agricultural economy is forecast to grow steadily at 3.6–3.8% in 2024–25, playing a key role in the country’s overall economic growth. Enhancing supply chain efficiency—through better logistics, cold chain infrastructure, and digital connectivity—will be critical in achieving this potential. A streamlined, tech-enabled supply chain will not only reduce post-harvest losses and food wastage but also ensure farmers receive fair returns, thereby strengthening rural incomes, boosting exports, and securing the nation’s food and nutritional needs.
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