The Civil Aviation Ministry on October 27, 2021, launched Krishi Udan 2.0 scheme. While launching the scheme, Union Civil Aviation Minister Jyotiraditya Scindia said that the scheme will give significant focus on optimizing and incentivizing air transportation of agricultural produce from hilly areas, northeastern states, and tribal regions across India. The scheme is a testament to the commitment of the Indian government towards doubling farmers' income.
What is Krishi Udan 2.0?The Krishi Udan 2.0 scheme proposes to optimize and incentivize transport Agri-produce by air transportation. The scheme shows the vision of improving value realization through better integration and optimization of Agri-harvesting and air transportation and contributing to Agri-value chain sustainability and resilience under different and dynamic conditions. The Krishi Udan 2.0 reflects the collaborative approach of the government towards policymaking. The scheme will boost the growth avenues for the agriculture sector and help them attain the goal of doubling farmers’ income by optimizing the supply chain, logistics, and transportation of farm produce. The first phase of the Krishi Udan 2.0 scheme will be implemented across 53 airports in India with the main focus on the Northeast and tribal regions. Apart from the primary focus on the Northeast region, the scheme will additionally cover the North, entire Western coast, and Southern India (including two islands). These airports have been strategically selected to offer access to the regional domestic markets and international markets as well. The scheme initially is expected to benefit farmers, freight forwarders, and Airlines. The Civil Aviation Ministry aims to launch a pilot scheme in 6 months. Based on the results, it will introduce amendments. |
Krishi Udan 2.0 – Key Highlights
Facilitate and incentivize air transport of agri-produce: The scheme will offer full waiver of Parking, Landing, RNFC, and TNLC charges for Indian freighters and P2C at selected airports of the Airport Authority of India with the main focus on Northeast, Tribal, and Hilly regions.
Strengthen cargo-related infrastructure at and off airports: The scheme will facilitate the development of a hub and spoke model and a freight grid. Airside transit and trans-shipment infrastructure will be built at Guwahati and Bagdogra airports. As a part of focus on the Northeast, tribal, and hilly regions, air transit and trans-shipment infrastructure will be set up at Leh, Srinagar, Nashik, Nagpur, Raipur, and Ranchi airports.
Reduce sales tax: The scheme will encourage the states to reduce the sales tax to 1 per cent on ATF for P2C aircraft and freighters as extended in UDAN flights.
Resource-pooling through convergence mechanism: The scheme will enable resource-pooling through a convergence mechanism wherein different government departments and regulatory bodies will collaborate to offer concessions and incentives to freight forwarders, airlines, and other stakeholders to improve air transportation of agri-produce.
Development of e-KUSHAL: The scheme will facilitate the development of e-KUSHAL (Krishi UDAN for Sustainable Holistic Agri-Logistics). The platform will enable the dissemination of information to all stakeholders. Further, e-KUSHAL will be integrated with National Agriculture Market (e-NAM).
Proposed locations for setting up a hub and spoke model under Krishi Udan 2.0
The Civil Ministry in collaboration with the Airports Authority of India (AAI) has proposed to set up a hub and spoke model across different locations to transport perishable products as follows:
| Year | Locations |
| 2021-22 | Agartala, Dibrugarh, Dimapur, Hubbali, Imphal, Jorhat, Lucknow, Lilabari, Srinagar, Silchar, Tezpur, Tirupati, and Tuticorin |
| 2022-23 | Ahmedabad, Bhavnagar, Jharsuguda, Kozhikode, Mysuru, Puducherry, Rajkot, and Vijayawada |
| 2023-24 | Agra, Darbhanga, Gaya, Gwalior, Pakyong, Pantnagar, Shillong, Shimla, Udaipur and Vadodara |
| 2024-25 | Salem and Holangi |
Krishi Udan 2.0 based on model of A2A – Agriculture to Aviation
The Krishi Udan 2.0 aims to converge two important yet diverse areas in India’s economic roadmap which are Agriculture and Aviation. Scindia noted that the Schemes like Krishi Udan which are based on the model of A2A (Agriculture to Aviation) enable the convergence of Agriculture and Aviation due to three primary reasons - Use of drones in the agricultural sector, evolutionary possible use of biofuel for aircraft in the future, and greater integration and value realization of agricultural products.
Who drafted the Krishi Udan 2.0?
The Krishi Udan scheme 2.0 was formulated by AAICLAS, a 100 per cent subsidiary of the Airports Authority of India and Invest India which is India’s national Investment Promotion & Facilitation Agency under the Ministry of Commerce and Industry.
About Krishi Udan 1.0
In February 2020, Finance Minister Nirmala Sitharaman had announced the Krishi Udan scheme in the Budget speech. The Krishi Udan scheme aimed at facilitating air transportation of agricultural and farm produce of the Northeastern states to benefit the local farmers.
The Northeastern region of India is famous for its rich organic farm produce. The Krishi Udan scheme aids in connecting them with regional and international markets at affordable freight rates.
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