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India's Arya.ag brings $2 billion in grain-backed lending to Avalanche
India's largest agricultural warehousing operator, Arya.ag, has started using Avalanche technology to tokenize grain inventories, warehouse receipts and loan data. The system is designed to make it easier for banks to verify assets that farmers use as collateral.
The initiative was unveiled by Infosys co-founder and Aadhaar digital identity project leader Nandan Nilekani at the Global Fintech Festival in Mumbai. The Finternet project is also helping develop rules for interactions between warehouses and lenders.
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Arya.ag stores around $2 billion worth of agricultural products in its warehouses. Through its existing business, the company facilitates about $1.3 billion in loans annually, while its non-bank financial arm Arya Dhan directly provides another roughly $230 million.
Banks will be able to verify collateral onchain
Farmers in India can store their harvested crops in warehouses and use them as collateral for loans instead of selling them immediately. However, information about inventories, existing pledges and outstanding debt can currently be held in separate systems, making it more difficult to verify collateral.
Arya.ag plans to move this data to a shared distributed ledger. This includes electronic negotiable warehouse receipts (e-NWRs), which are already legally recognized in India and can be used to obtain bank loans secured by stored agricultural products.
The company will create its own layer-1 blockchain using Avalanche technology. Arya.ag will initially operate the network, but other warehouse operators are expected to join it later.
According to Devika Mittal, head of India at Ava Labs, any bank will be able to join the network. Three major banks are already in the process of connecting to the system.
The companies have not disclosed how much in assets or loans has already moved to the new infrastructure. They have also not provided a timeline for scaling the project or disclosed the financial terms of the partnership between Arya.ag and Ava Labs.
Tokenization moves beyond financial assets
The project is primarily focused on improving the infrastructure for warehouse-backed lending. Potential benefits such as faster loan approvals, lower costs and broader access to financing for farmers will still need to be demonstrated as the system scales.
The issue is particularly relevant in India, where farmers account for around 40% of the population but only about 15% have access to formal credit. A significant share of borrowing still comes through informal and often more expensive channels.
Interest in Avalanche is also being supported by growing institutional demand for real-world asset tokenization. AVAX recently recovered above $8 and outperformed Bitcoin and Ethereum, although resistance around $8.20 continues to limit further gains.
Earlier, we reported that India is preparing to launch the country's first tokenized corporate bond in September. The project will combine digital securities with the Reserve Bank of India's wholesale central bank digital currency to enable near-instant settlement.
This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.
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