For higher crop yields, availability of good quality healthy seeds is a major challenge which is directly related to post-harvesting proper seed storage. Various reasons for significant seed storage losses includes varying temperature, humidity and presence of rodents, insects and microbial infestation. In this study, a new type of seed storage bag is produced using electrospun polyurethane (PU) nanofibers encapsulated with neem oil. The effect of neem oil loading (3, 5, and 10% w/v) on fiber morphology, wettability, and water vapor permeability is studied. The interaction of neem oil with PU is investigated and correlated with thermal stability and mechanical strength. The physico-mechanical characteristic then compared with commercial polypropylene storage bags to confirm its applicability. The real time storage experiment carried out for 75 days infers that 90% seeds stored in nanofibrous bags were uninfected, whereas 70% seeds in commercial bags found to be infected with storage fungi. These nanofabric bags show a great potential toward reducing seed storage losses and may be a game changer for achieving food security as one of the goal for sustainable development. © 2020 Wiley Periodicals LLC.