Indian Agribusiness sector is set for a momentous shift in demand

The Indian agriculture industry is one of the major growth drivers of the economy. Today close to 50% of the Indian population depend on agriculture or allied business for their employment. In Rural India, around 70% of the population is engaged in agricultural activities. The rural economy is almost completely dependent on agriculture and related activities. During the time of independence, agricultural output defined the main GDP growth in India. Today service sector is the biggest contributor to GDP growth, yet agriculture still manages close to 20% of the GDP.

In FY 23, the total agricultural grain production amounted to 330.5 million tons, jumping significantly from the year before, when it was pegged at 316 million tons. From FY 17 to 23, the total agricultural production in India has grown at a CAGR of 3.1%. In FY 23, the total agriculture exports from India reached USD 53.2 billion, growing at a CAGR of 8.1%.

The Indian government also understands the importance of the agribusiness sector as it can enable better market access for farmers, boost rural infrastructure, optimize food wastage, and create better linkages between production and consumption. There is a link between growth in the agribusiness sector and the financial upliftment of the farmer community. This has led the government to come up with favorable policies to further boost the sector.

Opportunities in the Indian agribusiness sector 

India’s vast agricultural resources make it a prominent ground for developing the agribusiness sector. Though there is an accurate definition for agribusiness it can be broadly termed as the procurement, cleaning, processing, and packaging of agricultural produce. It is backward integrated with numerous sectors such as agriculture machinery, pesticides, insecticides, fertilizers, etc. It is forward-integrated with warehousing, cold chains, packaging, marketing & distribution. The extensive range of forward and backward integration further underscores the importance of the Indian agribusiness industry, which is a sunrise sector.

Mentioned below are some of the opportunities in India’s vast agribusiness sector

• Coffee: India is the 3^rd largest producer of Coffee in Asia (6^th in the world). A major tea-drinking nation, around 65-70% of the coffee produced in India is exported. The beans hold great potential in India, and the country can double down on its current market share in international trade (~ 3%). Coffee is mainly produced in the states of Kerala, Karnataka, Tamil Nadu, etc.
• Tea: India is the second largest producer of tea (after China) in the world and comprises 18% of global consumption. In FY 23, India produced 1.37 million tons of tea, growing marginally from 1.36 million tons in FY 22. In India tea production is mainly concentrated in Nilgiris, North East, and North Bengal.
• Edible Oil and Oil seeds: India’s vast population, growth in disposable income, plenty of agri-climate zones, and a rich gastronomic culture, drive edible oil consumption. The Indian demand outstrips supply resulting in imports of oil. This further indicates the vast potential of growing edible oil seeds and processing oil. In FY 21, the total oil seed production in India amounted to 36.5 million tons, growing from 33. Million tons in FY 20.
• Seeds: India can become the seed bowl of the world. In FY 22, the seed market in India was sized at USD 2.8 billion growing at a CAGR of 3.9%, as per the analysis by The India Watch. In the next 5 years, it is slated to grow at a CAGR of 7.1%
• Others: There is strong potential in a host of other categories such as millet, maize, peanuts, soybeans, etc. Likewise, there is also tremendous scope in the production of herbs and clinical plants, horticulture, agarwood, etc.

How The India Watch Can Help with Project Feasibility Study? 

The India Watch is a leading market intelligence, feasibility study, and market research advisory with a strong understanding of the Indian agribusiness and allied sectors. If you are an investor or a business looking to enter the space, you can commission us for the market study or feasibility study. Our studies come up with plenty of actionable information, data, and insights to help you with informed decision-making.

Our project feasibility study can include but is not limited to the following:

• Market sizing, trends, growth potential, etc.
• Value chain analysis with a key focus on backward and forward integration.
• Information on key vendors.
• Pricing inputs, information on export/ import, market potential evaluation
• Regulatory insights
• Strategic growth roadmap preparation

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