Top 5 Potential Agribusiness Product Categories in India

India’s agribusiness industry is booming with confluence of factors like rising demand, growth in exports, increased investments in agricultural infrastructure, evolving dietary preferences, and much more.

The Indian agribusiness market amounted to USD 479 billion in 2023 and is all set to reach at USD 598 billion by 2029. The market will grow at a CAGR of 3.7% during the forecasted period. Agribusiness contributes almost 30% to the country’s GDP and employs 45% of India’s workforce.

India’s agribusiness has also witnessed substantial growth in the field of exports and thus there is a need for market research in agribusiness industry. The revenue generated through exports stood at USD 11.8 billion in 2023 and is poised to grow exponentially. The country’s strategic location and diverse weather provide a competitive edge to cater a wide range of agricultural goods. India exported cereals worth USD 3.4 billion in 2023, making them one of the topmost categories in the list of export goods. Other than these the nation have successfully exported other agricultural commodities like tea, coffee, sugarcanes, fruits, milk, oil crops, vegetables, forestry and other livestock products.

On the other hand, the agricultural production market also faces various hurdles like climate change, extreme temperatures and trade barriers. These circumstances affect crop yields and soil fertility. Inadequate usage of modern technology such as precision farming, drones etc. also hinders cost reduction, efficiency improvement, and increased yields. Agricultural producers also face competition from low-cost imports, which can undermine local production.

Market Growth Drivers:

High disposable income coupled with India’s rising population have generated a huge demand for agricultural products in the market. India is the most populated country in the world with over 1.4 billion citizens. This broad group of consumers provides a stable market for food grains, fruits, vegetables, tea, coffee, and other agricultural products.
Rise in exports coupled with government initiatives and trade agreements has opened a new window for Indian agribusiness market. In 2023, the export value of fruits and vegetables climbed approximately 20%, which had a positive impact on thousands of farmers.
Government initiatives such as Minimum Support Price (MSP), and Paramparagat Krishi Vikas Yojana have been crucial in the development of the Indian agribusiness. These helped farmers with invaluable resources, consistent prices, and methods of environmentally safe agriculture leading to greater production.
The agribusiness in India has been expanding with improved agriculture infrastructure, including investments in irrigation, construction of cold chains, and rural roads. These investments have been accompanied by evidence of better productivity, reduced post-harvest losses, and better marketing opportunities for farmers. Also, business research on Indian agribusiness industry becomes mandatory.
India’s agribusiness is poised to grow with enhanced technological advancements. These developments include precision farming, data analytics, drones, and automation. Using these techniques is beneficial in reducing costs, improving yields and optimize resource use.

Top 5 Agribusiness Products:

Tea:

India is the second largest producer of Tea and comprises 18% of the global consumption. In 2023, India produced 1.37 million tons of tea. Nilgiris, Northeast, and North Bengal are the hotspots of tea production in India.
In 2024, combined revenue (at-home & out-of-home) generated from tea sector is estimated to reach at USD 22.3 billion. The market will grow at a CAGR of 7.67% from 2024 to 2029.
Though the tea market of India is 80% unorganized, some well-known players include Red Label, Tata, Tazza, and Tetley. Tetley is the market leader with 6% of the total revenue generated in 2023.
Health benefits associated with tea combined with innovation are driving the market growth. Consumers are seeking healthier beverage alternatives which is boosting demand for categories like green tea, lemon tea, yellow tea, etc. This trend is particularly strong in Asia, Europe & UK.

Coffee:

India is 3rd largest producer of coffee in Asia and ranks 6th globally. Almost 60-70% of the coffee produced is exported and due to its good quality beans, the country can double down its current market share globally. Coffee is mainly produced in the states of Kerala, Karnataka, Tamil Nadu, etc.
The coffee market of India is growing at a steady pace and the revenue generated in 2024 was valued to be USD 1.09 billion.
Driven by changing consumer behavior and urbanization the domestic consumption of coffee has been on the rise. Arabica coffee beans known for their unique flavor and aroma have been the choice of the nation, hence it accounts for majority of India's production.
E-commerce and café culture have been the game changer for the further expansion of coffee brands in India. Café Coffee Day, Costa Coffee, Starbucks, Blue Tokai Coffee are some of the major coffee-related players in India.

Peanuts:

The peanut butter market of India was valued at USD 104.9 million in 2023, and the market is set to grow at a CAGR of 8.02%. The market is primarily driven by health awareness, rising disposable income, and the protein-rich properties of peanuts.
In 2021, an average Indian consumed 4.54 kg of peanuts which has been steadily increasing with the rise of gym and fitness culture. In 2022, approximately 1.6 million tons of peanuts were consumed in India.
Saurashtra, also known as the “groundnut bowl of India” is the largest producer of peanuts across the nation. Rajasthan, Andhra Pradesh, Karnataka, and Madhya Pradesh are other states famous for peanut production. Also, India is the largest producer of peanuts globally.
In FY 22, total peanut production in India amounted to 9.86 million tonnes, growing at a CAGR of 5.73% in the past 5 years.

Sugarcane

India is a global leader in terms of sugar production. The country is all set to produce 34 million metric tons of sugar in 2024. Uttar Pradesh, Maharashtra, and Karnataka are the top three states accountable for producing sugar. Market Study Services For Agribusiness In India gives many insights that helps in success in the business venture.
India’s sugarcane market is poised to reach USD 9.7 billion by the end of 2028, growing at a CAGR of 6.87%. The market is driven by a combination of factors like rising imports & exports, government initiatives & subsidies, changing dietary habits, and rising population.
India is one of the major exporters of sugar and raw cane. Some of the key export destinations include Bangladesh, Malaysia, Saudi Arabia, and Indonesia.
Byproducts of sugarcane such as molasses and bagasse can also be utilized since it has various properties and can be used in many industries. Also, the government has been promoting ethanol production from sugarcane as a renewable fuel source.

Edible Oil:

The Indian edible oil consumption is growing at a staggering pace, as a result, oil seed production in India crossed 40 million tons in 2023 growing at a CAGR of 5.02%.
In 2024, the edible oil market of India generated a revenue of USD 34.7 billion, and the market is expected to grow at a CAGR of 4.94% from 2024 to 2029. The average volume per person is expected to amount to 5.20kg in 2024.
Structural parameters such as large population, expansive middle class, a surge in per capita income, and evolving consumer lifestyle will continue to drive demand for edible oil in India.
Mustard oil, sunflower oil, vanaspati oil, coconut oil, sesame oil, etc. are the most used edible oils in India. Meanwhile, the demand for soybean oil, rice bran oil, and sunflower is also growing fast due to its health-beneficial results.

How The India Watch can Help?

The India Watch is a market research, insights, and feasibility study reports for agribusiness industry in India advisory, largely focused on the Indian market. We work with various organizations, investors, family run businesses, start-ups, etc. If you are planning to enter or expand into the edible oil or other FMCG categories, we can help with tailor-made research & insights services. Our range of services includes though not limited to the following

Feasibility studies for new ventures and start-ups.
Market research for retail sector in India surveys including consumer behavior surveys, brand surveys, customer loyalty surveys, competitive benchmarking, etc.
New product launch strategies & insights
Tailor made market research insights and studies
Capability deck, investor pitch, corporate presentation, white paper, etc.

For any further information, feel free to drop us a mail at info@theindiawatch.com

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