He called for greater participation of private players in government procurement and storage operations, arguing that expanding the minimum support price (MSP) ecosystem could improve efficiency, increase warehousing capacity, and reduce the burden on public agencies.
“Government agencies continue to dominate procurement and storage under the MSP system. There is a strong case for allowing efficient private players to participate in these operations,” Agarwal told ET Digital in an interview.
According to Agarwal, agencies such as the Food Corporation of India (FCI) and state procurement bodies continue to play the central role in purchasing and storing crops under MSP operations. However, he believes private infrastructure operators can complement these efforts by leveraging technology, warehousing networks, and operational expertise. “Today, procurement and storage are largely handled by government agencies and their warehousing networks. Private companies can procure, store, and manage stocks efficiently while providing complete digital traceability,” he said.
Agarwal argued that allowing accredited private players to procure grains at MSP on behalf of the government would create fresh investment opportunities in the sector while reducing pressure on public infrastructure. Under such a model, private operators could procure crops from farmers, make payments, store commodities, and subsequently transfer stocks to government agencies when required, he said.
Warehousing gap remains a major challenge
India’s warehousing infrastructure continues to be concentrated around major consumption centres rather than production regions, limiting farmers’ ability to store crops and sell when market conditions are favourable. Agarwal said India needs a large-scale expansion of village-level storage infrastructure. “We have warehouses near consumption centres, but not enough storage capacity close to farms. Farmers need access to storage facilities within their production clusters,” he said.
Notably, India has around 92 million tonnes (MT) of storage capacity for central pool foodgrain stocks, comprising about 82 MT of covered storage and 10 MT of cover-and-plinth (CAP) facilities. The infrastructure has been created largely by the FCI and state agencies, with support from the Central Warehousing Corporation (CWC) and state warehousing corporations (SWCs).
India could face a storage capacity shortfall of about 69 MT by 2030, even as foodgrain production is projected to rise to around 368 MT in 2030-31, according to a PHDCCI report released in November 2025.
StarAgri currently operates about 2,000 warehouses with a storage capacity of nearly 50 million tonnes, making it one of the largest private warehousing networks in the country.
The company began operations nearly 18 years ago with warehouse receipt financing, enabling farmers and traders to use stored commodities as collateral for bank loans. Today, it manages a collateral-backed financing portfolio of around Rs 20,000 crore in partnership with banks.
Push for farmer-owned storage infrastructure
Agarwal suggested that policymakers should encourage farmers and rural entrepreneurs to build warehouses through long-term financing support.
Drawing parallels with housing finance, he said warehouse creation in rural areas would accelerate if farmers received access to long-tenure loans spanning 30 to 40 years. Such facilities, he added, could be professionally managed by specialised operators, allowing farmers to benefit from storage without having to handle warehouse operations themselves.
“Farmers should be able to store their produce locally and decide when to sell. Professional warehouse operators can manage the infrastructure and ensure quality standards,” he said.
Evolving storage models
Commodity storage and warehousing are set for significant changes globally, driven by food security concerns and evolving trade flows. In the Middle East, countries, such as the UAE and Saudi Arabia, are investing heavily in storage infrastructure and free-zone ports to position themselves as regional food hubs, says Agarwal. A key emerging model is “grow in Africa, store in the UAE,” where agricultural produce from Africa and other producing regions is warehoused in the Gulf before being distributed to markets across Asia and the Middle East, notes Agarwal. The availability of duty-free storage and efficient transshipment facilities is expected to accelerate this trend.
In India, warehousing capacity is expanding, supported by government initiatives and growing interest from banks in agricultural financing. However, most storage infrastructure remains concentrated near consumption centres rather than production hubs.
The next phase of growth will require warehousing closer to farms and villages. Industry players argue that this can be achieved if farmers receive long-term, low-cost financing, similar to housing loans, to build storage facilities on their land, he said. These warehouses could then be professionally managed by third-party operators, allowing farmers to store produce and sell when market conditions are favourable, he adds. While a majority of Indian farmers are small and marginal, a sizeable segment has the scale and capacity to adopt such a model if adequate financing becomes available.
IPO plans
As it expands its warehousing, financing and technology businesses, StarAgri is preparing for a stock market listing within the next year, subject to market conditions. The company in December 2024 filed a DRHP with market regulator Sebi for its initial public offering (IPO).
The company reported revenues of Rs 697.5 crore in FY23, Rs 1,006.7 crore in FY24 and Rs 1,560.4 crore in FY25. Profit after tax (PAT) rose from Rs 28.8 crore in FY23 to Rs 46 crore in FY24 and RS 68.5 crore in FY25.
“The company is closely monitoring global market volatility and may defer its listing if conditions remain unfavorable. However, if liquidity improves over the next three to four months, we may plan to proceed with the public offering. The proposed IPO is expected to raise around Rs 2,000 crore and could help reshape investor perceptions of the agricultural sector by highlighting the scalability and profitability of agri-infrastructure and supply chain businesses,” said Agarwal.