Agriculture Infrastructure Fund: A Complete Guide

Every year, a meaningful share of India's agricultural produce is lost not to poor farming, but to poor infrastructure: inadequate storage, weak cold chains, and fragmented logistics that let good harvests spoil before they ever reach a fair market. For farmers, agri entrepreneurs, and rural enterprises, building the warehouses, cold storage units, and processing facilities that could fix this has always required serious capital, capital that has historically been hard to access on affordable terms, especially for smaller players without significant collateral.

The Agriculture Infrastructure Fund (AIF), launched by Prime Minister Narendra Modi on August 9, 2020 under the Aatmanirbhar Bharat Abhiyan, was built to change that. As a Central Sector Scheme with a substantial Rs. 1 lakh crore corpus, AIF mobilizes medium and long term debt financing specifically for post harvest management infrastructure and community farming assets at the farm gate and aggregation point level. Rather than lending directly, the government works through banks and financial institutions, making loans meaningfully more affordable and accessible through interest subvention and credit guarantee support, so the burden of building critical agricultural infrastructure does not fall entirely on farmers and entrepreneurs already operating on thin margins.

The Funding Opportunity: What AIF Actually Offers

• Loan provision: a total financing facility of Rs. 1 lakh crore has been made available through participating lending institutions, with loan interest rates capped at 9 percent.
• Interest subvention: all AIF loans carry a 3 percent per annum interest subvention from the central government, applicable on loans up to Rs. 2 crore per project, for a maximum period of 7 years from the date of first disbursement. For loans exceeding Rs. 2 crore, the subvention benefit is capped at the Rs. 2 crore portion.
• Credit guarantee coverage: eligible borrowers can access credit guarantee coverage for loans up to Rs. 2 crore under the Credit Guarantee Fund Trust for Micro and Small Enterprises, with the government bearing the guarantee fee, meaning many small borrowers can access financing without offering traditional collateral. For Farmer Producer Organizations, an alternative guarantee track through NABSanrakshan Trustee Company is also available, often with enhanced coverage.
• Repayment structure: loan tenure runs up to 7 years, with a moratorium period of 6 months to 2 years depending on project cash flow, during which interest remains payable.
• Scheme duration: AIF operates from 2020 21 through 2032 33, though loan disbursement under the scheme was structured to conclude within six years, by the end of FY 2025 26.
• Multiple projects: a single borrower can pursue up to 25 projects across different locations under AIF, with each project independently eligible for the Rs. 2 crore interest subvention benefit.

As of the government's most recent disclosure, dated January 26, 2026, AIF has sanctioned loans totaling roughly Rs. 80,224 crore across more than 150,000 projects since its inception, reflecting substantial, sustained uptake across the country's agricultural infrastructure landscape.

Who is eligible

• Farmers, agri entrepreneurs, Primary Agricultural Credit Societies, Farmer Producer Organizations, Self Help Groups, Joint Liability Groups, cooperatives, federations, and Agricultural Produce Market Committees.
• Public Private Partnership projects supported by central or state governments are also eligible.
• Eligible activities span warehouses, cold storage units, sorting and grading facilities, ripening chambers, primary and secondary processing units, and broader supply chain infrastructure including e marketing platforms.
• Loans are extended through Scheduled Commercial Banks, Scheduled Cooperative Banks, Regional Rural Banks, Small Finance Banks, Non Banking Financial Companies, and the National Cooperative Development Corporation.

How the process works

1. Identify an eligible post harvest infrastructure or community farming asset project that fits AIF's supported activity list.
2. Apply through a participating lending institution: banks, NBFCs, cooperative banks, or regional rural banks empaneled under the scheme.
3. The lender evaluates your application through standard credit appraisal, factoring in AIF's interest subvention and credit guarantee support where applicable.
4. Once sanctioned, the loan is disbursed with the 3 percent interest subvention applied directly, and CGTMSE or NABSanrakshan guarantee coverage activated for eligible amounts, reducing your effective borrowing cost and collateral burden.

Since AIF benefits can be combined with other central or state government subsidy schemes for the same project, such as PM KUSUM solarisation components, it is worth checking with your lending institution about convergence opportunities that could further reduce your overall project cost.

Where AIF Fits in the Broader Ecosystem

AIF is frequently mentioned alongside AgriSURE, since both were highlighted together as part of the government's broader push to strengthen agricultural infrastructure and entrepreneurship. The distinction matters. AIF finances physical infrastructure, the warehouses, cold chains, and processing units that reduce post harvest losses, through interest subvented bank loans, while AgriSURE provides equity and debt capital directly to agri startups and agripreneurs building businesses in the sector. A rural enterprise might reasonably use both: AgriSURE to fund the startup itself, and AIF to finance the physical infrastructure that startup needs to operate.