Explore the future of the India agriculture industry, size at USD 268 billion, featuring market segmentation, farm mechanization trends, crop diversification, and agri-tech adoption across key states.
Market Overview
India Agriculture Industry Overview
The size for India Agriculture market has been valued at USD$268 billion at a CAGR of 3.6%. In 2029, the market is expected to reach USD$439.5 billion at CAGR of 8.6%. The market is expected to grow further due to rising urbanization, government initiatives & automation & agricultural machinery. One of the major challenges in Indian agriculture is balancing sustainable agricultural practices while ensuring productivity. Uttar Pradesh, Maharashtra, Punjab & Rajasthan are major agricultural clusters across India.
India Agriculture Market Definition
Market Definition of India Agriculture: The India Agriculture Industry can be defined as the sum total of Gross Production Value (USD), encompassing cereals, fruits, oil crops, and vegetables. This definition explicitly includes staple crops such as rice, wheat, and maize, a diverse range of fruits, crucial oilseed crops, and various vegetables. Notably, it excludes components such as meat, milk, and other livestock, ensuring precision in delineating the industry's scope.
Taxonomy
India Agricultural Market Ecosystem
India Agriculture Market Size (gross production value in USD Bn), 2019-2023
India Agricultural industry witnessed a significant growth from USD 225 Bn in 2019 to USD 268 Bn in 2023. The market reported a CAGR of 3.6% during the historic period of 2019-2023. The industry has been valued at $210.6 billion in 2020, $240.6 billion in 2021 and $256 billion in 2022. Agriculture in India is expected to grow further due to rising urbanization, government initiatives & automation of agricultural machinery.
India Agriculture Market Analysis
Rising exports
Indian agricultural & processed food exports have seen a constant upsurge. In 2018, the figure reached US$38.21 billion, followed by a slight slump in the industry in 2022 as it reached US$18.91 billion. The industry bounced back quickly as the exports touched $43 billion in 2023. Total foodgrain production has been estimated at 330.5 million tonnes. The share of GVAs of agriculture & allied sectors in India in 2022-23 was 18.3% with a growth rate of 3.3%. Rising export have provided Indian farmers & businesses access to newer markets & supply chains. This has increased sector competitiveness & encouraged innovation & growth.
Emergence of e-NAM
National Agriculture Market or e-NAM has managed to integrate 1260 APMC mandis from 22 states and 3 Union Territories (UTs) in 2023. With e-NAM, farmers are able to sell their produce at lucrative prices & this has facilitated digital transformation of mandis & agricultural commodity e-trading. Till December 2022, more than 17.4 million farmers and 0.229 million traders have registered on the e-NAM portal.
National E-Governance Plan in Agriculture
Construction of Digital Plan Infrastructure (DPI), digital registries etc., the government has taken a number of steps to ensure access to IT across the nation.
Soil Health Card
Soil Health Card site has been connected with a Geographic Information System (GIS) system, allowing all test results to be captured & shown on a map. Under the new system which has been implemented from April 2023, samples are now being gathered with a mobile application
Agriculture Technology Management Agency (ATMA)
Implemented in 704 districts across 28 states and 5 Union Territories (UTs) to educate farmers. Grants-in-aid are released to the State Government with the goal of supporting State Governments' efforts to avail the latest technologies & good agricultural practices in various areas.
PM Formalisation of Micro Food Processing Enterpirses (PMFME)
Launched in July 2022, which aims to provide financial, technical & business support for setting up/upgradation of micro food processing enterprises in the country worth $1.27 billion
Krishi Vigyan Kendras
729 Krishi Vigyan kendras have been established at district levels across the country to ensure that newer technologies like improved variety seeds of crops, new breeds of livestock & fish and improved production & protection technologies reach farmers.
Pradhan Mantri Kisan Samman Nidhi Yojana (PM-Kisan)
PM of India transferred US$284.48 million to bank accounts of more than 10 million beneficiaries in 2019. In Union Budget 2021-22, US$8.9 billion was allocated to PM-Kisan in 2022.
Sustainability & climate change
The manner in which agriculture is practiced has a significant bearing on the quality of air, water & land. The bulk of water usage in the country is for agriculture and more than 40 per cent of land area is under agriculture. Agriculture in India has led to over exploitation of natural resources, especially water in the country.
Low Efficiency & Price Led Growth
Growth in India’s agricultural industry suffers from lower productivity levels. The pace of modernization is slow & the much-needed technology has been visible at a larger scale. For many crops, increase in productivity has led to an increase in average cost of production which also means an increase in output price.
Technology Dissemination and R&D
Adoption of improved & frontier technology in the country remains low due to poor extension. R&D in Indian agriculture has failed to pick up pace due to lack of adoption of smart farming techniques & lower application of advance sciences in agriculture.
Viability of Small Holders
85 per cent of land holders perform farming on a land less than 2 hectares. Small farm holders operate with usual agricultural practices but are unable to generate a higher income for living. For overcoming these challenges, farmers should be encouraged to grow high value crops & encourage life stock activities, or they can be supplemented with non-agricultural incomes like business & trading.
India Agriculture Future Market Outlook
Indian agriculture market is expected to grow till $439.5 billion in 2029, as compared to $268 billion in 2023. During the forecast period (2023-2029), the industry is forecasted to grow at a CAGR of 8.6%. The industry is expected to maintain constant growth during the forecasted period as the industry is estimated to reach $293.9 billion in 2024 followed by $315.8 billion in 2025, $341.4 billion in 2026 and $368.1 billion in 2027. The industry is expected to reach $402.2 billion in 2027 followed by $439.5 billion in 2029. The agriculture industry in India is expected to gain momentum in the next few years due to increased investment in agricultural infrastructure like irrigation facilities, warehousing and cold storage. Moreover, the use of genetically modified crops is likely to increase the yield for farmers. India is expected to become self-sufficient in pulses in the upcoming years, due to concerted efforts of scientists in pulses in the coming years due to scientists’ concerted efforts to get early maturing variety of pulses and increase in minimum support price (MSP). Through the Ministry of Food Processing Industries (MoFPI), the government is taking all the necessary steps to boost investments in the food processing industry in India. Government of India has continued the PM Kisan Samman Yojana Scheme with an allocation of $559.4 million till 2026.
India Agriculture Market Macroeconomic Indicators
Rising population is a crucial factor which has been driving the growth of Indian agriculture. India's population is currently 1417 million in 2022, increasing 40 million from 1407 million in 2022. By the end of 2025, India's population is predicted to reach 1500 million. Therefore, agriculture sector is also expected to progress rapidly.
Till 2023, India comprises of majority of the middle-class population which is 57% of the total population of India. After the middle class comes the lower-class category which comprises 33% of the total population of India. The remaining 10% of the population belongs to high-income class.
India's GDP is expected to reach USD$3390 billion, up from USD$3160 billion in 2021. In 2023, the contribution of agriculture in India’s GDP has been at 39 per cent of rural gross domestic product. Madhya Pradesh had the highest GDP contribution towards agriculture at 52 percent.
In 2022, India’s inflation rate stands at 6.73% an increase of approximately 3.5% from 2017 inflation rate of 3.33%. During Covid-19 Pandemic in 2020 the inflation rate in India surge unexpectedly to 6.62% from 3.72% in 2019. Higher inflation means a higher income for sellers but also means increasing cost of inputs for seeds, fertilizers and equipment for farmers.
Frequently Asked Questions
Find quick answers to common questions about India’s Agriculture Market
In 2023, India Agriculture market has been valued at $263 billion in 2023.
India Agriculture market is expected to grow at 8.6% between 2023-2029.
Agriculture in India contributes about 18 per cent of the total economy.
Population growth, rising exports across the world & government initiatives supporting agriculture are driving the market.
Failure of technology dissemination, low efficiency & price-led growth, climate change is likely to hinder market’s growth.
