Why is India Emerging as “The Land of Agritech Business Opportunity?”
“Agriculture is the most healthful, most useful and most noble employment of man.” – George Washington
AgriTech is the abbreviation of Agricultural technology. It means the application of technology in Agriculture to enhance the yield, efficiency, and profits.
Why India is the best place for the AgriTech business?
Nearly 58% of India’s population is dependent on agriculture as their main source of livelihood. India is a substantially agrarian economy and so there is huge potential for growth of the AgriTech industry in India.
At an earlier time, agriculture was a powerful economic sector of India. However, with the rise in industrialization, service & manufacturing-based economy, and rural to urban migration of labors, agriculture failed to get the attention it deserves from entrepreneurs & policy-makers.
The decrease in land holdings, shrinking agricultural land but increasing population, depletion of groundwater, poor seed quality, and lack of agricultural mechanization are the major problems that hinder the growth of agriculture here. Further, a disorganized supply chain & produce marketing system, malpractices within that system, farmer exploitation, lack of proper transport & storage facilities, lack of access to credit as well as the latest technology has pathetically lowered the incomes of farmers.
Consequently, there is a huge demand & enormous opportunity for AgriTech start-ups in India. There is immense scope in improving crop yield & farming efficiency, enriching the nutritional value of crops, cutting down input costs, improving the supply chain & creating minimal wastage distribution. There is also a brilliant possibility in the segment of market linkages like retail, B2C as well as B2B market. Banks have also been cooperative in developing new platforms that can provide solutions that may contribute to AgriTech start-ups’ transformation.
The future of the AgriTech market in India
India will witness AgriTech as a rapidly booming industry with no signs of slowing down in the coming times. The AgriTech segment in India is preparing itself for growth in the next two decades and so will surely attract investors and create excellent infrastructures as well as make way for sustainable market connections. Food production is always a huge concern here due to the increasing population.
In 2013, India had only 43 start-ups in this sector, but it progressively increased to 1000 start-ups in 2020. The numbers are expected to grow further with the rising interest of the investors. The catalysts factor responsible for the growth of this number includes a rise in digital infrastructure & increasing internet penetration in rural parts of the country.
The turnover of the AgriTech market in India in the year 2020 is 204 million USD & is still under 1% of its market potential.
India’s AgriTech market is estimated to grow up to 24.1 billion USD by 2025.
The five chief AgriTech market segments that seize the largest share of the AgriTech market value include:
- Supply chain tech & output market linkages
- It is the largest segment with an estimated value of 12 billion USD by 2025.
- Financial services
- It is the second-largest segment with an estimated worth of 4.1 billion USD by 2025.
- Precision Agriculture & farm management
- It is estimated to reach up to 3.4 billion USD by 2025.
- Quality management and traceability
- It is estimated to grow up to 3 billion USD by 2025
- Supplying farm inputs
- This segment is estimated to value up to 1.7 billion USD by 2025
AgriTech Trends in India
Farming-as-a-Service (FaaS)
It involves offering pay-per-use-based technology solutions, farm services & agricultural equipment leasing at a reasonable price for efficient farming. EM3 Agri Services is the company that introduced FaaS to India.
Big Data
Utilizing Big Data Technology to offer farm management solutions, input channel solutions, and enhance sustainability. It also includes combining technology & advanced analytics for risk mitigation, forecasting solution, Traceability & compliance. CropIn, AgNext, and Airwood are some of the companies working on this idea.
Robotic Technologies
Robotic technology is applied in agriculture to boost productivity in processes like spraying, weeding, crop-harvesting, fruit-picking, etc., and nowadays often in doing more intricate and precise tasks. Its demand is rising due to its immense help in solving problems like labor shortage, high labor cost, and the shortcomings of traditional methods. TartanSense, and Grobomac are examples of companies that apply robotics for farming.
Crop Monitoring Technologies
It is about monitoring crops utilizing advanced drones technology and satellites all through their growth, harvesting, and storage phase to eliminate any possible risks of losses. Examples include Equinox’s Drones and SGS India.
Supply Chain and Logistics
It utilizes technology to improve crop storage, packaging & shelf life, food security & traceability. Examples include the Farm to business companies like Crofarm & Ninjacart. These companies source produce from farmers and supply it to businesses. These companies offer digitized Agri-supply chains thus offering efficient, zero wastage distribution.
IoT sensory system
Advanced IoT based software is used to track & give precise information related to
- Soil parameters like moisture, pH level, temperature, etc.
- Environmental parameters like humidity, temperature, light intensity
- Realtime Geographical parameters
to improve productivity, maximize yields, curtail waste, and conserve resources like water & fertilizer. Companies that execute this technology include AIGROEDGE & Infosys.
Vertical farming
It is a smart farming system in which the crops are grown stacked in vertical layers to solve the space shortage problems. The most popular method of several vertical farming techniques includes:
Hydroponics
This technique needs no soil to grow crops by adding mineral nutrients of the correct amount in the water they are grown.
UGF (URBAN GREEN FATE) farms, Homecrop, and Pindfresh are a few examples of vertical & hydroponics farming solutions offering companies in India.
Drones in Farming
Drones in Farming contribute to lower down the cost. Drones help farmers to overcome challenges by consolidating raw data, which decodes very useful information for farm nursing.
What support does the Indian government provide to the AgriTech Start-ups?
The Indian government provides multiple incentive schemes to encourage AgriTech Start-ups in India. Here are the various steps taken to provide a major boost to India’s Agricultural Industry:
- The government of India has launched ASPIRE to create a network of tech technology centers and incubation centers to promote AgriTech Start-ups.
- The Government’s NSTEDB start-up scheme offers limited, one-time, non-recurring financial aid, up to INR 25 Lakhs.
- The quantum of SFAC Venture Capital Assistance will be subject to the project cost and can be the minimum of the following:
- > 26% of the promoter’s equity
- > INR 50 Lakhs.
- SERB has no maximum-minimum limit for a project grant. The budget depends on the need for its successful implementation.
- Soil Health Cards have been launched to improve the productivity of certain crops reasonably and shall be issued to all 14 crore holdings in India. About 248 lakh samples are to be analyzed in 3 years cycle.
In 2020, The ministry of agriculture planned to invest INR 36.71 Cr to support 346 AgriTech & allied sector Startups.