Agriculture represents an important component of the Indian economy in terms of both employment opportunities offered by it and its contribution to the GDP of the country. Presently, India is the third largest agricultural producer across the globe in terms of value, after the United States and China. There have been numerous transformations in the agricultural sector of India, over the past few years, which include growth in contract farming, increasing penetration of the organised sector, easy loan facilities, rising mechanisation of agriculture, increasing use of agrochemicals and rise in exports. A new research report by IMARC Group, titled “Agriculture Industry in India: Growth and Opportunities”, estimates that the market was worth INR 44,488 Billion in 2017. The report further anticipates the market to cross INR 86,410 Billion by 2023, at a projected CAGR of nearly 12% over the forecast period.
Drivers/Constraints of Agriculture Industry in India:
- The sustained economic growth in India has led to an increase in the per capita income levels due to which there has been a rise in the consumer base for agricultural products. This is one of the primary factors driving the market.
- Across rural areas, there is an easy availability of credit owing to several developments and initiatives which include Kisan credit cards and microfinance. This has led to a boost in agricultural production across the region as the farmers are enabled to get credit easily for numerous activities such as buying fertilisers, land, equipment, etc.
- There has been a rise in the organised food retail sector in India which offers a diversified range of products that are directly or indirectly related to the agriculture sector. This has, in turn, contributed towards the augmented market growth.
- Cost of logistics in India is higher as compared to other regions owing to poor conditions of road, lack of cold chain facilities and improper warehousing methods after harvesting. This is one of the major obstacles which is hindering the growth of the agriculture industry in India.
The agriculture industry in India has been segregated into 17 sectors which include farming, agriculture equipment, fertilizers, pesticides, warehousing, cold chain, food processing, dairy market, floriculture, apiculture, sericulture, seeds, fisheries, poultry, animal husbandry, animal feed and bioagriculture market. Currently, the farming sector (consisting of vegetables, fruits, cereals, plantation crops, spices and pulses) is the largest segment in the agriculture industry in India. The farming, dairy and food processing segments together accounted for the majority of the entire industry revenues. Cold chain, sericulture and floriculture, on the other hand, represent the fastest growing segments.
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