Agriculture Infrastructure Fund 2026 — 3% Interest Subvention for Agri Projects
Think about what happens to fruits and vegetables after harvest in most Indian villages.
A farmer grows tomatoes. Within 3 to 4 days they begin to spoil. There is no cold storage nearby. The mandis are flooded with supply. The price crashes. The farmer sells at ₹4 per kg a product that will sell in a city supermarket for ₹40.
This post-harvest infrastructure gap is one of the most damaging problems in Indian agriculture. It causes massive income loss for farmers every single year.
The Agriculture Infrastructure Fund (AIF) was launched specifically to fix this gap.
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What is the Agriculture Infrastructure Fund?
The Agriculture Infrastructure Fund is a Government of India scheme launched on August 9, 2020, under the Aatmanirbhar Bharat Abhiyan. It provides a ₹1 lakh crore financing facility for medium- and long-term investment in post-harvest management infrastructure and community farming assets.
The scheme is implemented by the Department of Agriculture and Farmers Welfare (DA&FW) through an online AIF Management Information System portal at agriinfra.dac.gov.in.
The scheme is operational from 2020-21 to 2032-33 — giving applicants a long window to plan and apply.
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The Core Benefit — 3% Interest Subvention
The most attractive feature of AIF is the 3% annual interest subvention on loans up to ₹2 crore.
This means if the bank charges you 9% interest on your loan, the government reimburses 3% directly to the bank — so your effective interest rate becomes just 6%. This subvention is provided for a period of 7 years.
For loans above ₹2 crore, the subvention benefit does not apply — but the loan itself can still be sanctioned.
Additionally, for loans up to ₹2 crore, the government pays the CGTMSE credit guarantee fee on your behalf. This means you get collateral-free borrowing and the guarantee fee is not charged to you.
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What Projects are Eligible?
This is one of the most versatile government schemes because it covers a wide range of agricultural infrastructure projects:
Post-harvest infrastructure:
- Cold stores and cold chains
- Warehouses and silos
- Assaying, grading, and packing units
- Ripening chambers and waxing plants (for banana, mango, etc.)
- Primary and secondary processing units
Community farming assets:
- Custom hiring centres (tractors, harvesters, planters, balers, and drones)
- Smart irrigation and sensor-driven precision agriculture infrastructure
- Organic input production units — vermicompost, biofertiliser
- SHG-run drone services for pest scouting and spraying
- Hydroponics, vertical farming, and mushroom cultivation units
- Seed and nursery infrastructure
Other eligible projects:
- Beekeeping infrastructure
- Food processing units
- E-marketing platforms for agriculture produce
If your project helps move agricultural produce from farm to market more efficiently, it likely qualifies.
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Who Can Apply?
The AIF is unusually broad in terms of eligible applicants:
- Individual farmers
- Farmer Producer Organisations (FPOs)
- Primary Agriculture Credit Societies (PACS)
- Marketing Cooperative Societies
- Self-Help Groups (SHGs)
- Joint Liability Groups (JLGs)
- Multi-purpose Cooperative Societies
- Agri-Entrepreneurs and Agriculture Startups
- Central and State Government agencies
- Urban Local Bodies sponsoring agriculture projects
- PPP Agriculture Projects
There is no upper limit on loan amount for state agencies and FPO federations.
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Loan Terms and Financial Structure
- Interest subvention: 3% per annum for 7 years (up to ₹2 crore)
- Interest rate: up to ₹2 crore — 6M MCLR + 1% (capped at 9% per annum); above ₹2 crore — as per bank guidelines
- Moratorium period: minimum 6 months to maximum 2 years (cash flows determine this)
- Maximum repayment period: 10 years including moratorium
- Margin money: minimum 10% of project cost for loans up to ₹2 crore; 25% for loans above ₹2 crore
- Credit guarantee: CGTMSE coverage up to ₹2 crore at government expense
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How to Apply
Step 1: Visit the AIF portal at agriinfra.dac.gov.in and register as an applicant.
Step 2: Fill in your project details — type of infrastructure, location, estimated cost, land availability, and funding requirement.
Step 3: The system routes your application to an empanelled bank or financial institution in your region.
Step 4: The bank processes the loan application, conducts technical and financial appraisal, and sanctions the loan.
Step 5: Once the loan is disbursed, the bank registers the loan on the AIF system and the interest subvention begins automatically.
You can also approach any of the 24 commercial banks, 40 cooperative banks, or NABARD directly and ask to apply under the Agriculture Infrastructure Fund scheme.
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AIF Converges With Other Schemes
One of the most powerful aspects of AIF is that it can be combined with other government schemes. This means you can simultaneously benefit from multiple support programmes on a single project:
- PMEGP (subsidy from MSME ministry)
- NHB or MIDH (horticulture subsidy)
- PM-KUSUM (solar power for agri units)
- ACABC (Agri Clinics and Agri Business Centres)
- State government schemes
This convergence makes AIF particularly powerful for complex agri-processing or horticulture projects.
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Important Conditions to Know
- The project report must clearly demonstrate economic viability and cash flow sufficiency for loan repayment
- Misrepresentation in the application can lead to subsidy recovery with interest and legal action
- Physical verification of the project is mandatory before and after disbursement
- The AIF portal tracks real-time progress of each funded project
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Summary
- Scheme corpus: ₹1 lakh crore
- Interest subvention: 3% per annum on loans up to ₹2 crore for 7 years
- CGTMSE guarantee: government pays the fee for loans up to ₹2 crore
- Moratorium: 6 months to 2 years
- Repayment: up to 10 years
- Who can apply: farmers, FPOs, SHGs, agri-entrepreneurs, cooperatives, and more
- Apply at: agriinfra.dac.gov.in or through any empanelled bank
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*Disclaimer: AIF scheme guidelines, interest rates, and eligible project categories may be revised by DA&FW. Always verify current terms on the official AIF portal.*
For AIF project report preparation and loan documentation, contact Pragati Saathi Private Limited, Bhopal — www.pragatisaathi.in
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