Agriculture Infrastructure Fund — ₹1 Lakh Crore AIF Scheme Guide
Complete guide to the Agriculture Infrastructure Fund — 3% interest subvention for 7 years, CGTMSE credit guarantee, post-harvest infrastructure financing for FPOs, PACS, agri-entrepreneurs, and startups.
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Agriculture Infrastructure Fund — Step-by-Step Guide
Prepared by TaxClue's expert team. Updated for 2026.
What Is the Agriculture Infrastructure Fund?
The Agriculture Infrastructure Fund (AIF) is a ₹1 lakh crore financing facility launched in July 2020 under the Atmanirbhar Bharat package. It provides medium-to-long term debt financing for investment in post-harvest management infrastructure and community farming assets. The fund addresses India's massive gap in agricultural infrastructure — the country loses 15–20% of produce annually due to inadequate cold chain, storage, and processing facilities. AIF offers interest subvention of 3% per annum for 7 years and CGTMSE credit guarantee for eligible borrowers. The scheme is managed by the Department of Agriculture & Farmers Welfare with implementation through all scheduled banks, NABARD, NCDC, and NBFCs.
3% Interest Subvention for 7 Years
The most attractive feature of AIF is the 3% per annum interest subvention on loans for a period of 7 years from the date of first disbursement. This means if the bank charges 9% interest, the effective rate for the borrower is only 6%. The subvention is credited directly to the borrower's loan account by the government. The 3% benefit applies on loans up to ₹2 crore per project. For loans exceeding ₹2 crore, the interest subvention applies on the first ₹2 crore while the remaining amount is at the normal bank rate. This makes AIF one of the most affordable financing options for agricultural infrastructure.
CGTMSE Credit Guarantee
Loans up to ₹2 crore under AIF are covered by CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) credit guarantee. This means the borrower does not need to provide collateral or third-party guarantee for loans up to ₹2 crore — the government guarantees the loan to the bank. The guarantee fee is paid by the government for the initial period. This is a game-changer for small farmers, FPOs, and agri-entrepreneurs who often cannot provide adequate collateral. The CGTMSE coverage combined with interest subvention makes AIF the most farmer-friendly financing facility in India.
Eligible Beneficiaries
AIF is available to a wide range of beneficiaries: Farmer Producer Organisations (FPOs), Primary Agricultural Credit Societies (PACS), Marketing Cooperative Societies, Self Help Groups (SHGs), individual farmers, agri-entrepreneurs, startups, state agencies, APMCs, and joint liability groups. Companies, partnership firms, and proprietorship firms engaged in agriculture are also eligible. Central/state government agencies and local bodies can apply for community farming assets. The scheme does not restrict based on landholding size, making it accessible to marginal and small farmers as well. Multiple loans can be taken by the same entity for different projects.
Eligible Projects & Infrastructure
AIF covers a comprehensive range of post-harvest and community farming infrastructure: cold stores and cold chain (pack houses, reefer vans, ripening chambers), warehouses and silos, assaying and grading units, sorting and packaging facilities, primary processing centres, e-marketing platforms and rural markets, organic input production units, smart agriculture projects (precision farming, IoT-based monitoring), supply chain infrastructure, and community farming assets (custom hiring centres, farm machinery banks). Bio-stimulant production, bee-keeping infrastructure, and marine/inland fisheries infrastructure are also covered. The project must be viable and create tangible agricultural infrastructure.
Moratorium Period — 6 Months to 2 Years
AIF loans come with a moratorium period of 6 months to 2 years on principal repayment, depending on the nature of the project and the lending bank's assessment. During the moratorium, only interest is payable (at the subvented rate). This gives the borrower time to construct the infrastructure, commission operations, and start generating revenue before repayment begins. The total loan tenure can extend up to 10–15 years depending on the project type. Banks have flexibility in structuring repayment schedules based on the seasonal cash flow patterns of agricultural businesses. This long-tenure, low-interest structure makes projects financially viable even with moderate returns.
How to Apply — Online Portal & Banks
Step 1: Register on the AIF portal at agriinfra.dac.gov.in using Aadhaar or PAN. Step 2: Select the project category and fill in project details including location, capacity, and estimated cost. Step 3: Upload required documents — identity proof, land documents, project report, and bank account details. Step 4: Submit the application online. Step 5: The application is forwarded to your selected bank branch for appraisal. Step 6: The bank conducts due diligence and project assessment. Step 7: Upon bank approval, the loan is sanctioned with 3% interest subvention and CGTMSE guarantee (if applicable). Step 8: Disbursement is linked to project milestones. You can also apply directly through your bank branch, which uploads the application on the AIF portal.
Convergence with Other Schemes
AIF can be converged with other government schemes for comprehensive project support. Key convergences include: PMKSY (Pradhan Mantri Krishi Sinchai Yojana) for irrigation infrastructure, RKVY (Rashtriya Krishi Vikas Yojana) for agricultural development, PM FME for food processing, MIDH (Mission for Integrated Development of Horticulture) for horticulture infrastructure, NFSM for food security projects, and state-level agriculture schemes. The convergence means that the capital subsidy from one scheme can be combined with AIF's interest subvention for the loan component, making the total cost of the project significantly lower. The AIF portal facilitates identification of convergence opportunities.
Progress & Impact
Since launch, AIF has sanctioned loans for over 70,000 projects across all states and union territories. Total sanctions have crossed ₹50,000 crore, with an average loan size of approximately ₹70 lakh. The top project categories include warehouses, cold stores, custom hiring centres, and primary processing units. States like Madhya Pradesh, Rajasthan, Uttar Pradesh, Andhra Pradesh, and Tamil Nadu have been among the top beneficiaries. FPOs and PACS together account for a significant share of sanctions, demonstrating the scheme's reach to grassroots agricultural organisations.
How TaxClue Can Help
TaxClue assists agri-entrepreneurs, FPOs, and farmers with end-to-end AIF support — project report preparation, financial projections, bank loan application, AIF portal registration, and documentation. Our CA/CS team handles the complex requirements of project financing including DPR preparation, cost estimation, revenue modelling, and bank coordination. We also assist with FPO registration, PACS compliance, GST registration for agri-businesses, income tax filings (including agricultural income exemptions), and convergence with other government schemes for maximum benefit.
Need Expert Help?
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