Indian agriculture is at an inflection point. The $370 billion sector will undergo a complete transformation in the coming years on the back of significant technology and regulatory changes.
Agriculture’s contribution to the country’s gross value added (GVA) is about 20%, and agriculture in India continues to be dominated by small and marginal land holdings. Additionally, close to 55% of the Indian population still depends on agriculture for their livelihood.
The idea of doubling farmer incomes in the next few years is likely to become a reality based on the technological and regulatory changes in this sector. In addition, the agritech and agri-ecosystem sectors have seen significant interest from the investor community over the past few years. India is the third-largest nation in terms of funding received and start-ups in the agritech space. We believe there will be significant value creation in the agricultural value chain across the entire ecosystem over the next two decades, which will fundamentally change the way we produce and consume food, in India and globally.
There is no turning back from the road ahead. Indian agriculture is ripe for disruption. We see the sector benefiting from a ‘today forward, future back’ approach, where organisations can maximise the potential of the current business by becoming cheaper, better, faster, broader, and greener while taking the first steps towards a future vision. These technological changes, capabilities, and investment on the anvil will fundamentally change the productivity and landscape of Indian agriculture. In fact, our estimates indicate that approximately $30 billion to $35 billion of value pool will be created in agri-logistics, offtake, and agri-input delivery by 2025.
With the scenario above, we believe that there are three key ways for firms across sectors to capitalise on the opportunity to reinvent Indian agriculture by leveraging the technology ecosystem:
- Companies in the agriculture sector could build an integrated agritech platform.
- Companies in the agriculture sector could digitally transform internal business processes to adapt to regulatory and technological changes.
- Companies in other sectors could exploit the rapidly developing agritech ecosystem through a corporate venture capital centre of excellence (CoE).