Setting up a commercial dairy or animal feed plant?
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Government Subsidies
NABARD Dairy Subsidy & AHIDF 2026: 3% Interest Subvention & Capital Grants for Dairy Units
Launch or scale a commercial dairy farm, milk chilling center, or cattle feed plant with 3% interest subvention and capital subsidies under Central AHIDF and NABARD guidelines.
Dairy farming in India is transitioning rapidly from subsistence backyard milch animal holding into high-efficiency commercial agribusiness. A dairy farm with 20 to 100 high-yielding crossbred cows or Murrah buffaloes, paired with automated milking parlors and bulk milk coolers (BMC), generates stable daily cash flow.
To support this transformation, the Central Government operates the Animal Husbandry Infrastructure Development Fund (AHIDF) with a fund size of ₹15,000 Crore, alongside NABARD's refinancing frameworks.
1. Animal Husbandry Infrastructure Development Fund (AHIDF)
AHIDF provides commercial credit support for establishing:
- Dairy Processing & Value Addition: Cheese manufacturing, paneer processing, ice cream plants, flavored milk, and packaging lines.
- Bulk Milk Chilling Infrastructure: Setting up BMCs at village collection nodes.
- Meat Processing Facilities: Modern hygienic processing and cold chain setups.
- Animal Feed Manufacturing Plants: Total Mixed Ration (TMR) blocks, cattle feed pellets, bypass protein units.
2. The 3% Interest Subvention for Up to 8 Years
- Interest Subvention: The Central Government provides a 3% interest subvention on the term loan for a period of up to 8 years.
- Moratorium Period: Up to 2 years moratorium on principal repayment while the dairy sheds, processing plants, and livestock are being established.
- Credit Guarantee: Eligible for credit guarantee coverage through NABSANRAKSHAN (a NABARD subsidiary) covering up to 25% of the credit facility for MSMEs.
3. Promoter Margin Slabs
- Micro & Small Enterprises: Minimum promoter equity is only 10%. The remaining 90% is financed via bank term loan!
- Medium Enterprises: Minimum promoter equity is 15%.
- Other Borrowers / Corporates: Minimum promoter equity is 25%.
4. How to Apply
- Prepare a CA-vetted DPR detailing livestock procurement, fodder management, milk yield calculations, and buyer off-take agreements.
- Submit the application online via the SIDBI Udyami Mitra Portal (
ahidf.udyamimitra.in). - The Ministry of Fisheries, Animal Husbandry & Dairying screens the file before passing it to your nominated scheduled commercial bank.
General Educational Disclaimer: Information published on the PSBLOAN Knowledge Center is provided for general educational purposes and should not be considered financial, legal, or lending advice. Loan eligibility, interest rates, fees, approval, and other terms are determined by the respective lender based on its policies and the applicant's profile.