Agriculture Industry in India Expected to Grow at 12%, Driven by Government Support and Entry of Organised Food Retail Outlets

Despite being a country largely dependent on agriculture for the sustenance of its people, India faces certain challenges inhibiting the growth of its agriculture industry. The government’s support along with the emerging trend of contract farming, organised retail outlets, easy credit availability and growing consumer base are expected to drive the growth of this industry at a CAGR of 9.5% during 2017-2022.



India represents the third largest agricultural producer by value, after US and China. Agriculture is an important component of the Indian economy as it provides employment to a large portion of the Indian population. According to a new report by IMARC Group entitled, Agriculture Industry in India: Growth and Opportunities”, the agriculture industry in India has grown at a CAGR of around 17% during 2009-2016, reaching a value of INR 34,889 Billion INR in 2016. The report finds that currently, India is the largest producer and consumer of dairy products and spices as well as the second largest producer of fruits, fishes, wheat, rice and raw silk, globally.

 

Highlights of the Indian agriculture market:

  • Farming represents the largest segment of Indian agriculture, accounting for more than a third of the entire agriculture market revenues.
  • Entry of organised food retail outlets has made the agriculture market more accessible and competitive.
  • Rising disposable income, huge consumer base, easy availability of credit and government support are expected to drive the Indian agriculture market.

 

The agriculture industry in India has been divided into 17 segments. For each of these segments, the report has provided an in-depth analysis of Indian agriculture market which includes current and historical market trends, drivers, challenges, market structure, competitive landscape, market forecast, etc. The farming segment (which consists of fruits, vegetables, plantation crops, cereals, pulses and spices) represents the largest segment of the Indian agriculture industry. Farming, food processing and dairy segments together accounted for around three-fourth of the entire industry revenues in 2016. On the other hand, the fastest growing segments of the industry include floriculture, cold chain and sericulture.

Despite being an important part of nation’s economy, the agriculture industry in India still faces certain challenges. India’s yield for major crops is highly heterogeneous and is below the global average and far below the highest standards. Owing to uneven penetration of new technologies, crop yield varies across different parts of India. Small landholdings and inadequate logistics support have also negatively impacted the growth of Indian agriculture market.

In order to overcome these challenges and provide better conditions, the government has extended support to the agriculture market. Subsidies have been provided to farmers on power, water and agriculture equipment, and Minimum Support Price (MSP) is also provided by government for certain crops to insure agricultural producers against any sharp fall in farm prices. Moreover, agricultural income is exempted from taxes and spending on agriculture infrastructure has also been increased. Furthermore, the Indian economy is flourishing and a continuous increase in disposable income has led to a continuous increase in the demand for agricultural products.

 

 The report by IMARC Group has examined the Indian agriculture market on the basis of the following segments:

  • Farming
  • Food processing
  • Dairy
  • Fertilisers
  • Poultry
  • Fisheries
  • Cold chain
  • Agri equipment
  • Animal husbandry
  • Warehousing
  • Animal feed
  • Seeds
  • Sericulture
  • Pesticides
  • Floriculture
  • Bioagriculture
  • Apiculture

 

 

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IMARC Group is a leading market research company that offers management strategy and market research worldwide. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses.

IMARC’s information products include major market, scientific, economic and technological developments for business leaders in pharmaceutical, industrial, and high technology organizations. Market forecasts and industry analysis for biotechnology, advanced materials, pharmaceuticals, food and beverage, travel and tourism, nanotechnology and novel processing methods are at the top of the company’s expertise.

 

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