AgTech Projected To Grow To USD 35 Billion Market By 2025

Having more than 42.6 percent of the total workforce engaged, agriculture is still one of the prominent sectors in India 2019. Though it gives employment to a large chunk of the population, the share of Indians working in agriculture is declining.

Like Education and Health, the agriculture industry is also facing thousands of changes due to invasion of technology, regulation, investment and other related interests. As per a report by consultancy firm Bain & Company titled “Indian Agriculture: Ripe for Disruption”, agribusiness, agricultural supply and related businesses in India will be valued at around $30-35 billion by 2025. The report is based on in-depth correspondences with different stakeholders, including industry experts in agriculture, farmers, and agritech start-ups.

India received $1 billion in Agritech funding between 2017 and 2020. Experiencing extreme interests from Investors side, India's agritech industry ranked third in terms of funding and number of start-ups after the USA and Germany. Investments in Indian agritech companies are expected to reach USD 30-35 billion by 2025.

New technologies in India’s agricultural sector are enabling it to overtake the traditional approach of developing, processing and marketing the produced food. Use of High-yielding varieties HYV seeds and other genetic modifications after the Green revolution has already changed critically. Conventional farming practices will change and improve over time, and the entire agricultural value chain will build a unique value pool of $ 30-35 billion in the years to come.

‘‘As India recuperates from the devastating impacts of COVID-19, which disrupted an already damaged economy, the $370 billion agriculture sector is pegged to undergo a complete change on the back of significant technology and regulatory changes.’’

Market Value and Forecasts

As per a survey conducted by Deloitte India, the number of smartphone users will reach 1 billion by 2026. This increased number of smartphones will subsequently be responsible for awareness among people, eventually fostering the growth of all sectors including agriculture. Farmers are also expected to be nurtured by high internet penetration and high mobile connectivity, thereby fostering the development of the Indian Agtech industry. The government has also performed an essential role in developing the sector by creating incubators, providing grants and using public-private partnerships.

In September 2021, the Union Minister of Agriculture & Farmers Welfare, Narendra Singh Tomar, announced the initiation of the Digital Agriculture Mission 2021–2025, while signing five memorandum of understandings (MoUs) with CISCO, Ninjacart, Jio Platforms Limited, ITC Limited and NCDEX e-Markets Limited (NeML), to forward digital agriculture through pilot projects. The Digital Agriculture Mission 2021–2025 aims to support and accelerate projects based on new technologies, like AI, block chain, remote sensing and GIS technology and use of drones and robots.

As part of the Digital Agriculture Mission 2021-2025, Narendra Singh Tomar, Union Minister of Agriculture & Farmers Welfare, signed five memorandums of understanding (MoUs) with CISCO, Ninjacart, Jio Platforms Limited, ITC Limited and NCDEX e-Markets Limited (NeML), to advance digital agriculture through pilot projects. During the Digital Agriculture Mission 2021-2025, the government will support and accelerate projects that use new technologies, such as AI, block chain, remote sensing and GIS technologies, and drones and robots.

India ranks third in terms of agricultural technology funding after the United States and Germany and is the third-largest hub of agritech start-ups after the United States and the United Kingdom. In 2020, India received $329 million in investment from PE/VC companies, with an astonishing combined annual growth rate of 53% from 2017 ($ 91 million) to 2020 ($ 329 million).

What New Reforms brought For Indian Agritech 

A report by the Bain & Company says that the three land reform bills passed by the government in September 2020 encourage direct farmer purchases by corporations, free movement of food items from production to consumption centres, and private investments in storage facilities.

With the help of agricultural production expansion, institutional and technological reforms, and improved post-harvest management, the government hopes to double farmers' wages by 2022. A new online platform for trading agricultural products, eNAM, was launched by the government in 2016. In order to form a national online marketplace for farm products, the platform integrates all members of the Agricultural Produce Market Committees (APMCs) mandis.

What does the future hold - Tips for Indian Agritech Start-ups?

There is significant development potential in the Indian agricultural science and technology sector. Investors around the world are interested in this industry as it has reached a critical point. It is considered the backbone of the Indian economy. Agricultural technology enables farmers to digitize their entire supply chain and embrace cutting-edge technologies such as the Internet of Things (IoT), analytics, big data, artificial intelligence, and others.

Technology advancements, legislative reforms, increased investment and a sector transformation in India can benefit young entrepreneurs and budding agricultural entrepreneurs (Agri-preneurs). The business community needs to create sustainable solutions that are easy for farmers to use and affordable for the ordinary farmer, even those in remote areas.

In order to build a robust agricultural technology policy framework for India, stakeholders should seek inspiration from countries such as the U.S. and Israel. Agrarian communities, agricultural technology companies, processors, and many other market players will be able to participate in this sector, thereby driving it to success.