Agriculture Infrastructure Fund (AIF)

The Agriculture Infrastructure Fund was launched in July 2020 to finance the infrastructure that sits between the field and the market. It is a ₹1 lakh crore medium-term debt financing facility: banks and financial institutions lend, and the government makes the loan cheaper and safer.

What the government adds to the loan

• 3% per annum interest subvention
• Credit guarantee through CGTMSE for loans up to ₹2 crore
• Each entity can take AIF benefits for up to 25 projects, each in a different LGD (local government directory) code

The 2024 expansion

The Union Cabinet widened the fund so that:

• Community farming assets are open to all eligible beneficiaries
• Secondary processing integrated with primary processing qualifies
• AIF converges with PM-KUSUM, so a solar project can draw on both
• NABSanrakshan provides additional credit guarantee support for Farmer Producer Organisations

• 3% interest subvention per year on the loan.
• Credit guarantee cover for loans up to ₹2 crore under CGTMSE, with extra FPO cover through NABSanrakshan.
• Loans of up to 25 separate projects per entity, in different LGD codes.
• Convergence with PM-KUSUM and with state capital subsidy schemes, so one project can stack support.

What you can build with it

Post-harvest management

• Supply chain and e-marketing infrastructure
• Warehouses and silos
• Cold stores and cold chains
• Sorting, grading and packaging units
• Reefer and insulated vehicles, ripening chambers
• Crop residue management, primary processing centres

Community farming assets

• Organic input units such as vermicompost
• Compressed bio-gas (CBG) plants, biostimulant units
• Smart and precision agriculture — drones, sensors, IoT, blockchain and AI
• Nurseries, tissue culture, seed processing
• Custom hiring centres, solar pumping
• Spirulina, honey and sericulture processing centres
• Plant quarantine units

Group projects only

• Hydroponic, vertical, aeroponic and mushroom farming
• Poly-houses and greenhouses
• Logistics facilities
• Tractors

Eligible borrowers are:

• Farmers and agri-entrepreneurs
• Start-ups
• Cooperatives, including federations of cooperatives
• Farmer Producer Organisations (FPOs) and their federations
• Self Help Groups (SHGs) and Joint Liability Groups (JLGs), and their federations
• Central and state agencies, and mandis (APMC market committees)

Hydroponic, vertical, aeroponic and mushroom farming, poly-houses, logistics facilities and tractors are available to groups only, not to an individual borrower.

• Tractors, poly-houses, logistics facilities and hydroponic, vertical, aeroponic and mushroom farming are not available to individual borrowers — these are group-only activities.
• The interest subvention applies to the loan; the credit guarantee is capped at loans of ₹2 crore.
• The benefit is limited to 25 projects per entity, and each must sit in a different LGD code.
• AIF is a loan facility, not a grant. The principal is repaid to the bank.

How to apply

1. Prepare a project report for what you want to build, with costing and expected returns. Banks assess AIF proposals like any other term loan, so this document decides the outcome.
2. Apply through the official AIF portal or at a participating bank — commercial banks, regional rural banks, cooperative banks and NABARD-refinanced institutions all lend under AIF.
3. State on the application that you are seeking AIF interest subvention and CGTMSE credit guarantee, and whether you are applying as an individual or as an FPO, SHG or cooperative, since that decides which activities you can take up.
4. If your project also involves solar pumping or solar power, ask about convergence with PM-KUSUM, and about any state capital subsidy you can dovetail.

Open the official Agriculture Infrastructure Fund portal

• Project report with costings
• Identity and address proof; registration documents for an FPO, SHG, cooperative or company
• Land ownership or lease document for the project site
• Bank account details and existing credit history