Agritech Has Potential To Add $95 Bn To Indian Economy
The Union Budget 2025 emphasizes agriculture, with the sector contributing 16-18% of GDP and employing 44-45% of India’s workforce. Agritech, with a $24 billion opportunity, is key to boosting productivity and farmer incomes. Investments in AI, IoT, and Blockchain are driving growth, with agritech startups exceeding 1,000. The sector could add $95 billion to India’s economy by 2027.
The Union Budget-2025 has laid utmost thrust on agriculture sector. One has to keep in mind that the agriculture industry in India contributes significantly to the country’s economy, accounting for nearly 16 per cent of the GDP and employing 44 per cent of the national workforce. Redseer Strategy Consultants, in its report, puts the figures at a marginally higher level. According to Redseer, India’s agriculture business contributes significantly to the country’s economy, accounting for roughly 18 per cent of GDP and employing 45 per cent of the national workforce. Going by Press Information Bureau (PIB) figures, India ranks 8th with a share of 2.33 per cent among the world’s top agricultural exporters.
There is another study by Ernst & Young, which suggests that agritech firms in India present a $24 billion opportunity, although the market is still largely untapped (with only 1.5% penetration). Little wonder therefore that agritech, or agricultural technology, is one of the driving forces of India’s economy for more reasons than one. Agritech has the potential to add $95 billion to India’s economy by increasing farmer incomes, reducing input costs, and improving productivity.
The sector ensures jobs in addition to food production. Agritech uses technology to solve challenges in agriculture, such as growing crops in any environment, faster planting, and better harvesting. The government, on its parts, is therefore, encouraging stakeholders to use digitalization to increase efficiency and yield, and reduce dependency on climate and socio-economic uncertainties.
The number of agritech startups in India has increased from 43 in 2013 to over 1,000 in 2020. It is much higher now. Private equity (PE) investment in agritech businesses has also increased by 50 per cent. Some technologies used in agritech include Artificial intelligence (AI), The Internet of Things (IoT), and Blockchain.
Agritech is already boosting Indian agriculture. Between 2013 and 2020, the agtech landscape in India grew from less than 50 start-ups to more than 1,000, fuelled by increased farmer awareness, rising internet penetration in rural India, and the need for greater efficiency in the agriculture sector. Moreover, India’s regulatory environment is gradually evolving to facilitate the growth of digital technologies in agriculture. Existing agriculture incumbents use digital technologies to either go direct to the farmer or to expand products and services across adjacencies. Suppliers are becoming buyers, advisers are adding finance—any combination is possible and happening, points out a recent McKinsey report. Once fully nurtured, the agtech ecosystem has the potential to propel Indian farmers’ incomes to grow by 25 to 35 per cent, and add $95 billion to the Indian economy, through reduction of input costs, enhanced productivity and price realization, cheaper credit, and alternative incomes. The market size of agritech is expected to more than double from 2022 to 2027, rising from $4 billion to a whopping $34 billion (Avendus report). The food crop segment alone is predicted to rise from $3 billion to $25 billion by 2027. Fibre crops, cattle and dairy, poultry, and aquaculture are all expected to grow significantly. The digitalization of agriculture and the introduction of an Agriculture Accelerator Fund will open new vistas for the country’s enterprises and individuals, as well as the global community at large. India has enormous potential for investment and growth in the agritech sector, including Agritech start-ups, digital infrastructure assistance, and cutting-edge technology.
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Source : Bizz Buzz
