Agriculture is one of the main sectors of the Indian economy. It is indispensable, especially, in terms of its contribution to the gross domestic product (GDP) and as a source of employment to millions of people. More than 70% of the people who live in rural areas depend on agriculture as the principal basis of their livelihood. Along with fisheries and forestry, agriculture represents 1/3rd of the Indian GDP and is, therefore, its single largest contributor.
The growth witnessed by the Indian agriculture sector, in the recent years, is due to the growth in the income and consumption of the population, the growth in the food processing sector as well as the increase in agricultural exports. An increasing participation of the private sector in Indian agriculture coupled with a rise in the adoption of organic farming and usage of information technology contribute to the upward trend of the sector.
The Indian agriculture industry spans across multiple business areas like canned, dairy, processed and frozen foods, fisheries, meat, poultry and food grains. India is not only the largest producer of milk (with an annual output of 130 MT and the largest milk-producing animal population of more than 118 million), but also the biggest producer of pulses (with 19 MT) in the world. Furthermore, the Indian subcontinent hosts the second largest sugar production worldwide. The new government under Narendra Modi and his Make in India campaign have set a target to increase the exports from 1.3 MT in 2013 to an average of 2 MT in 2014 and 2015. 1/5th of the total exports of India are agricultural products. Most spices and spice products of the world are produced, consumed and exported by the Indian subcontinent.
Industry experts expect the spice export to reach US$ 3 billion by 2016-17 and according to the data provided by the Department of Economics and Statistics (DES), India achieved a record food grain production of 264 MT in 2013-14, beating the previous year’s (2012-13) 257 MT.
The Indian agriculture sector has great potential for growth in the coming years. An increase in investment in agricultural infrastructure (like irrigation facilities, warehousing and cold storage), reduction in transaction costs and time, better port gate management and fiscal incentives are sure to fuel the growth in this sector. Furthermore, the increased use of genetically modified crops is also expected to better the yield of the Indian farmers.
To read the latest news on Agriculture in India click Agriculture Newsletter