1. INDIAN
AGRICULTURAL
INDUSTRYAgriculture is the main occupation of the Indian peoples. Performance of
Indian economy is dependent upon the growth of Agriculture sector. It
contributes nearly 22% of India’s Gross Domestic Product (GDP). It
provides employment to 52% of the country’s work force and livelihood
security to more than 620 million people. Agriculture plays an important
role in economic development, such as provision of food to the nation,
enlarging exports, transfer of manpower to non-agricultural sectors,
contribution to capital formation, and securing markets for
industrialization. Agriculture forms the backbone of Indian Economy.
22% of Indian GDP
58% Rural Household
Dependency
Largest Producer of
Pulses
2nd Largest Producer of
Sugar
World’s 2nd Largest
Agricultural Land
Swaroop Pandao
swarooppandao@gmail.com

2. Indian Agricultural Industry Date: 24/09/2015
Swaroop Pandao
Agriculture Industry
Introduction
Agriculture plays a vital role in India’s economy. Over 58 per cent of the rural households
depend on agriculture as their principal means of livelihood. Agriculture, along with fisheries
and forestry, is one of the largest contributors to the GDP.
As per estimates by the Central Statistics Office (CSO), the share of agriculture and allied
sectors (including agriculture, livestock, forestry and fishery) was 22 per cent of the Gross
Value Added (GVA) during 2014–15 at 2011–12 prices.
The country is the largest producer, consumer and exporter of spices and spice products. It
ranks third in farm and agriculture outputs. Agricultural export constitutes 10 per cent of the
country’s exports and is the fourth-largest exported principal commodity. The agro industry in
India is divided into several sub-segments such as canned, dairy, processed, frozen food to
fisheries, meat, poultry, and food grains.
The Department of Agriculture and Cooperation under the Ministry of Agriculture is
responsible for the development of the agriculture sector in India. It manages several other
bodies, such as the National Dairy Development Board (NDDB), to develop other allied
agricultural sectors.
At 157.35 million hectares, India holds the second largest agricultural land in the world. With
20 agri-climatic regions, all 15 major climates in the world exist in India. India is the largest
producer of spices, pulses, milk, tea, cashew and jute; and the second largest producer of wheat,
rice, fruits and vegetables, sugarcane, cotton and oilseeds. Further, India is 2nd in global
production of fruits and vegetables, and is the largest producer of mango and banana. It also
has the highest productivity of grapes in the world.
Total food grains production in India reached an all-time high of 251.12 million tonnes (MT)
in FY15 (as per 3rd Advance Estimates). Rice and wheat production in the country stood at
102.54 MT and 90.78 MT, respectively. India is among the 15 leading exporters of agricultural
products in the world.
Market Size
Over the recent past, multiple factors have worked together to facilitate growth in the
agriculture sector in India. These include growth in household income and consumption,
expansion in the food processing sector and increase in agricultural exports. Rising private
participation in Indian agriculture, growing organic farming and using information technology
are some of the key trends in the agriculture industry.
As per the 3rd Advance Estimates, food grain production is estimated at 251.12 million tonnes
(MT) for 2014-15. With an annual output of 138 MT, India is the largest producer of milk. It
also has the largest bovine population.
India is the largest producer and importer of pulses at 19.0 MT and 3.4 MT, respectively.
India, the second-largest producer of sugar, accounts for 14 per cent of the global output. It
is the sixth-largest exporter of sugar, accounting for 2.76 per cent of the global exports.
Spice exports from India are expected to reach US$ 3 billion by 2016–17 due to creative
marketing strategies, innovative packaging, strength in quality and strong distribution
networks. The spices market in India is valued at Rs 40,000 crore (US$ 6.42 billion) annually,
of which the branded segment accounts for 15 per cent.
The procurement target for rice during marketing season (MS) 2014–15 has been finalised as
35.10 MT.

3. Indian Agricultural Industry Date: 24/09/2015
Swaroop Pandao
Growth Drivers of Indian Agriculture
The services enhanced by the Green Revolution in the agriculture sector of Indian economy
are as follows:
 Acquiring more area for cultivation purposes
 Expanding irrigation facilities
 Use of improved and advanced high-yielding variety of seeds
 Implementing better techniques that emerged from agriculture research
 Water management
 Plan protection activities through prudent use of fertilizers, pesticides, and cropping
applications
Growth
Drivers
Demand
side
drivers
Policy
Support
Supply
side
drivers
 Hybrid and
genetically
modified seeds
 Mechanisation
 Irrigational facilities
 Green revolution in
Eastern India
 Population and
Income growth
 Increasing exports
 Favourable
demographics
 Growing
Institutional credit
 Increasing MSPs
 Introduction of new
schemes
 Opening up of
exports of wheat
and rice

4. Indian Agricultural Industry Date: 24/09/2015
Swaroop Pandao
All these measures taken by the Green Revolution led to an alarming rise in the wheat and rice
production of India's agriculture. Considering the quantum leap witnessed by the wheat and
rice production unit of India's agriculture, a National Pulse Development Programme that
covered almost 13 states, was set up in 1986 with the aim to introduce the improved
technologies to the farmers. A Technology Mission was introduced in 1986 right after the
success of National Pulse Development Programme to boost the oilseeds sector in Indian
economy. Pulses too came under this programme. A new seed policy was planned to provide
entree to superior quality seeds and plant material for fruits, vegetables, oilseeds, pulses, and
flowers.
The Indian government also set up Ministry of Food Processing Industries to stimulate the
agriculture sector of Indian economy and make it more lucrative. India's agriculture sector
highly depends upon the monsoon season as heavy rainfall during the time leads to a rich
harvest. But the entire year's agriculture cannot possibly depend upon only one season. Taking
into account this fact, a second Green Revolution is likely to be formed to overcome the such
restrictions. An increase in the growth rate and irrigation area, improved water management,
improving the soil quality, and diversifying into high value outputs, fruits, vegetables, herbs,
flowers, medicinal plants, and bio-diesel are also on the list of the services to be taken by the
Green Revolution to improve the agriculture in India
Major seasons: Kharif and Rabi
 There are two major agricultural seasons in India: Kharif and Rabi
 Kharif season lasts from April to September (summer); rice (paddy) is the season’s
main crop
 Rabi season lasts from October to March (winter); wheat is the season’s main crop
 Total food grains production in India reached an all-time high of 257 million tonnes in
FY14;
 According to 3rd advance estimate for FY14-15 by Ministry of Agriculture, total food
grains production is estimated to be 251.12 million tonnes in FY15
104 121 131 132 129
114
124
128 124 128
0
50
100
150
200
250
300
FY10 FY11 FY12 FY13 FY14
Production of Food Grains in Kharif and Rabi Season(Million
tonnes)
Kharif Rabi

5. Indian Agricultural Industry Date: 24/09/2015
Swaroop Pandao
Investments
Several players have invested in the agricultural sector in India, mainly driven by the
government’s initiatives and schemes.
According to the Department of Industrial Policy and Promotion (DIPP), the Indian agricultural
services and agricultural machinery sectors have cumulatively attracted foreign direct
investment (FDI) equity inflow of about US$ 2,182 million from April 2000 to May 2015.
Some major investments and developments in agriculture in the recent past are as follows:
 Rabo Equity Advisors, the private equity arm of Netherlands-based Rabo Group, raised
US$ 100 million for the first close of its second fund – India Agri Business Fund II.
The fund plans to invest US$ 15–17 million in 10–12 companies.
 Oman India Joint Investment Fund (OIJIF), a joint venture (JV) between the State Bank
of India (SBI) and State General Reserve Fund (SGRF), invested Rs 95 crore (US$
15.25 million) in GSP Crop Science, a Gujarat-based agrochemicals company.
 The world's seventh-largest agrochemicals firm, Israel-based ADAMA Agrochemicals
plans to invest at least US$ 50 million in India over the next three years.
 Belgium-based Univeg recently collaborated with Mahindra & Mahindra to develop a
fresh fruit supply chain.
 Companies from the US, Canada, Australia, Israel, the Netherlands and other European
countries have shown strong interest to transfer the best practices, linkages between
scientific institutes, agriculture storage, cold-chain management, market access, and
productivity enhancement such as the introduction of new technology in seed and plant
biotech.
 Canada-based International Food Security Research Fund has major investments in
food security research in several Indian universities. These strengthen food-processing
and sustainable agricultural techniques.
Government Initiatives
Given the importance of the agriculture sector, the Government of India, in its Budget 2015–
16, planned several steps for the sustainable development of agriculture. The government has
already taken steps to address two major factors (soil and water) critical to improve agriculture
production. Steps have been taken to improve soil fertility on a sustainable basis through the
soil health card scheme and to support the organic farming scheme ‘Paramparagat Krishi Vikas
Yojana’. Other steps include improved access to irrigation through ‘Pradhanmantri Gram
Sinchai Yojana’; enhanced water efficiency through `Per Drop More Crop’; continued support
to MGNREGA and the creation of a unified national agriculture market to boost the incomes
of farmers.
The central government recognises the importance of microirrigation, watershed development
and ‘Pradhan Mantri Krishi Sinchai Yojana’; thus, it allocated a sum of Rs 5,300 crore (US$
830 million) for it. It urged the states to focus on this key sector. The state governments are
compelled to allocate adequate funds to develop the agriculture sector, take measures to
achieve the targeted agricultural growth rate and address the problems of farmers.
The Department of Agriculture and Cooperation under the Ministry of Agriculture has inked
MOUs/agreements with 52 countries including the US. In addition, the Department of
Agriculture Research & Education (DARE) and the Department of Animal Husbandry,
Dairying & Fisheries (DAHD&F) under the Ministry of Agriculture have signed
MOUs/agreements with other countries, taking the number of partnerships with other countries
to 63. These agreements would provide better agricultural facilities in areas such as research

6. Indian Agricultural Industry Date: 24/09/2015
Swaroop Pandao
and development, capacity building, germ-plasm exchange, post-harvest management, value
addition/food processing, plant protection, animal husbandry, dairy and fisheries. The
agreements could help enhance bilateral trade as well.
Given the correlation between improvement in agriculture and the development of the country,
the Government of India adopted several initiatives and programmes to ensure continuous
growth. It allocated Rs 25,000 crore (US$ 3.9 billion) for the Rural Infrastructure Development
Fund (RIFD), Rs 1,500 crore (US$ 234 million) for the long-term rural credit fund, Rs 45,000
crore (US$ 7.03 billion) for the short-term cooperative rural credit finance fund and Rs 25,000
crore (US$ 3.9 billion) for the short-term RRB refinance fund. It also marked an ambitious
target of Rs 8.5 lakh crore (US$ 132 billion) of agriculture credit during 2015–16.
Some of the recent major government initiatives in the sector are as follows:
 The National Dairy Development Board (NDDB) announced 42 dairy projects with a
financial outlay of Rs 221 crore (US$ 35.47 million) to boost milk output and increase
per animal production of milk.
 The government planned to invest Rs 50,000 crore (US$ 8.0 billion) to revive four
fertiliser plants and set up two plants to produce farm nutrients.
 The Ministry of Food Processing Industries took some new initiatives to develop the
food-processing sector that would enhance the income of farmers and export of agro
and processed foods, among others.
 Israel increased contribution to Indian agriculture and helped farmers multiply their
income with better practices and yields. It also helped choose the right crops or
vegetables to make this a success story, which is strengthening bilateral ties.
 The Government of Telangana allocated Rs 4,250 crore (US$ 682.31 million) for the
first phase of the farm loan waiver scheme. The scheme is expected to benefit 3.6
million farmers who took loans of Rs 100,000 (~US$ 1,600) or below before March 31,
2014.
Road Ahead
The agriculture sector in India is expected to generate better momentum in the next few years
due to increased investments in agricultural infrastructure such as irrigation facilities,
warehousing and cold storage. Factors such as reduced transaction costs and time, improved
port gate management and better fiscal incentives would contribute to the sector’s growth.
Furthermore, the growing use of genetically modified crops will likely improve the yield for
Indian farmers.
The 12th Five-Year Plan estimates the foodgrains storage capacity to expand to 35 MT. Also,
a 4 per cent growth would help restructure the agriculture sector in India in the next few years.

7. Indian Agricultural Industry Date: 24/09/2015
Swaroop Pandao
Thank You