The Indian government plans to expand its wheat silo capacity from 2.8 million tonnes (MT) to 9 MT over the next three years, modernising the country’s grain storage infrastructure. The Food Corporation of India (FCI) has initiated bids to construct 2.5 MT of new storage facilities under the public-private partnership (PPP) model, with contracts expected to be awarded by February 2025.

Currently, 35 silos with a combined capacity of over 2.8 MT are operational. Contracts for an additional 3.5 MT capacity across 80 locations have already been awarded to private entities, with completion expected in the next two years. The expansion is part of a Rs 90 billion project to develop wheat silos across 250 sites in states including Punjab, Haryana, Madhya Pradesh, Uttar Pradesh, and Gujarat.

Major companies, such as Adani Agri Logistics and National Collateral Management Service, have secured contracts for the construction. These facilities will operate under 30-year leases, with FCI paying private entities fixed storage charges on a per-tonne, per-year basis. The silos are being built using two models: the DBFOT (design, build, fund, own, and transfer) model, where FCI owns the land, and the DBFOO (design, build, fund, own, and operate) model, where private entities provide the land.

The estimated cost of constructing 1 MT of silos is Rs 10 billion. These facilities, designed as sub-mandi yards, aim to ease procurement for farmers and reduce logistical costs significantly.

In addition to wheat, the FCI is piloting steel silos for rice storage. A 12,500-tonne rice silo has been completed in Buxar, Bihar, to be operational next month. The government is developing technology to store rice at controlled temperatures of 15°C to minimise wastage.

The FCI annually stores 40-50 MT of rice and wheat to support the National Food Security Act, with silos ensuring better preservation and reduced grain losses. The move aligns with recommendations from a high-level committee in 2015, which proposed adopting a ‘hub-and-spoke’ model to overcome land acquisition challenges for railway sidings in silo construction.