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.
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.
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