Agriculture in India
The World Bank calls India 'one of the agricultural powerhouses of the world', accounting for about 7.5% of global agricultural production. India is the world's largest producer of milk, pulses and spices, and the second largest producer of rice, wheat, cotton, sugar cane, farmed fish, mutton and goat meat, fruits, vegetables and tea.
The agricultural sector is also one of the largest and most important sectors for India itself, contributing about 18% to the GDP. The gross value added for the agricultural sector in 2020 was $276 billion.
India is among the fastest growing markets for the sale of agricultural machinery. This is because farmers are increasingly adopting modern agricultural technologies to increase their yields and the government has announced a number of incentives in this sector. These include creating hubs for high-tech agricultural equipment and making financial assistance available for farmers to buy machinery, in order to stimulate the growth of the sector.
In addition, the Indian government wants to make the country more self-sufficient in agriculture and increase farmers' income. The mechanisation of farms presents a huge opportunity for foreign companies who want to market their smart, technological solutions in the Indian market. Demand is high in every segment of the agriculture industry. There is a need for agricultural machinery and equipment as well as related product groups that can make the sector more effective.
Market statistics on the agricultural sector in India
India is one of the countries with the greatest biodiversity in the world. The country has various types of soil that are suitable for growing a large number of crops. Moreover, India is also the second largest fish-producing country in the world.
India is the second largest agricultural producer in the world, but when it comes to grain, it is the absolute number one. Grain production reached a new high of 305 million tonnes in the 2020-21 crop year.
Agricultural exports crossed the $40 billion mark for the first time in 2021, with the Indian government aiming to increase agricultural exports to $60 billion by 2023.
The budget of the Ministry of Agriculture and Farmers Welfare has been increased from $16.2 billion in 2022-23 to $17.3 billion in 2023-24.
The demand for agricultural supplies and related services such as storage and cold storage is growing rapidly.
Food processing infrastructure has an investment potential of USD 22 billion
Covid-19 Impact
Agriculture was identified as a key sector during the pandemic and as a result has come out relatively unscathed. The Indian agriculture sector is one of the few sectors that showed growth during the pandemic, at 3.4% in FY20-21.
The post-pandemic conflict between Russia and Ukraine is now creating new opportunities for India's agricultural sector in terms of exports of grain, sunflower oil, maize and barley.
Growth drivers of the Indian agricultural sector
A rapidly growing population and rising incomes are driving the demand for food. In addition, rising foreign demand for agricultural products is driving the booming export business in the agricultural sector.
The introduction of contract farming has had a positive impact on the agricultural sector, as it has reduced the number of taxes and increased reinvestment.
Indian agriculture is innovating more and more, stimulated by government initiatives. For example, drones are used to spread fertiliser and pesticides over the fields. This also increases the demand for affordable, technical solutions that can make farming in India more efficient.
The major players in the agricultural industry in India
National agricultural players in India
Rallis India limited
Nuziveedu seeds limited
Advanta Limited
Poabs Organic Estates
National Agro Industries
Godrej Agrovet limited
Rasi Seeds
Jain Irrigation Systems
International agricultural players in India
BASF
CNH Industrial
Bayer AG
Syngenta AG
DowDuPont
Deere & Company
CLAAS
Archer Daniels Midland Company
Cargill
Lemken India Agro Equipment Pvt. Ltd.
Interesting investment opportunities
There is a great need for innovative solutions to make Indian agriculture robust against climate change and to make its processes more efficient.
There is great interest in fertigation (fertilisation and irrigation), automation, substrate growth, semi-automatic climate control, modern cultivation techniques, data recording, etc.
Agtech aimed at improving supply chains and agricultural efficiency in India has an estimated potential of US$ 170 billion.
Do you have a specific question about the opportunities that exist in the Indian agricultural sector for your company or product?
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