NEW DELHI — The Agriculture Infrastructure Fund (AIF) has crossed the ₹1 trillion loan mark, the Ministry of Agriculture and Farmers’ Welfare said on Thursday. The milestone reflects cumulative disbursements since the fund’s launch in 2020 and includes financing for farm‑storage, cold‑chain, irrigation and other agri‑infrastructure projects across 28 states.
The Ministry’s latest data show that 4,732 projects have received AIF loans, with an average loan size of ₹21.1 million. About 62 % of the financing went to cold‑chain and storage facilities, while 18 % supported micro‑irrigation and water‑management schemes. The remaining 20 % covered logistics hubs, market yards and post‑harvest processing units.
Post‑2026 expansion plan
According to a statement released by the Ministry, the government intends to increase the fund’s annual outlay to ₹250 billion after the 2026 fiscal year. The expansion will target underserved regions in the northeast and central India, where storage capacity per hectare remains below the national average of 0.45 cubic metres.
The statement added that the Centre will introduce a risk‑guarantee component to attract private capital. The component, modeled on the Infra‑Risk Guarantee Fund discussed in a recent Business Standard column, will provide partial credit guarantees for high‑risk agri‑infra projects, thereby lowering the cost of borrowing for developers.
Funding sources and repayment
Loans under the AIF are sourced from a mix of public and private lenders, including state‑run banks, regional rural banks and non‑bank financial companies. The Ministry reports a weighted average interest rate of 7.2 % for the portfolio, with a repayment schedule of 10‑15 years depending on project type.
As of September 2026, the fund’s repayment rate stands at 84 %, with ₹842 billion already repaid. The remaining ₹158 billion is scheduled for repayment by March 2031. The Ministry said that timely repayments have enabled the fund to recycle capital and sustain its lending momentum.
Impact on agricultural productivity
Independent analysis by the National Institution for Transforming India (NITI Aayog) estimates that AIF‑financed cold‑chain capacity has reduced post‑harvest losses by 12 % in the last two years. The analysis also links increased irrigation coverage to a 4.3 % rise in yield per hectare for wheat and rice in the states of Punjab, Haryana and Uttar Pradesh.
Farmers’ unions have welcomed the increased access to credit but have urged the government to streamline application procedures. In a press briefing, the All India Kisan Sabha said that smallholder farmers often face documentation hurdles that delay loan approvals.
Future challenges
Officials highlighted three challenges for the post‑2026 phase: ensuring last‑mile connectivity for storage units, aligning loan terms with farmers’ cash‑flow cycles, and managing credit risk in regions with lower farm incomes. The Ministry indicated that it will work with state governments to set up dedicated project facilitation cells to address these issues.
Analysts note that the success of the risk‑guarantee component will depend on clear eligibility criteria and transparent monitoring mechanisms. The Business Standard column on the Infra‑Risk Guarantee Fund warned that without robust safeguards, the guarantee scheme could expose the government to fiscal strain in the event of widespread defaults.
