India’s agritech sector is witnessing a surge in innovation, with startups leveraging AI, IoT, and machine learning to transform agriculture. The sector, already home to over 3,000 startups, plays an important role in enhancing productivity and efficiency. As the government prepares the upcoming budget, industry leaders emphasize the need for eased regulations, better financing options, and increased R&D funding. Will the new budget address these aspirations and propel India’s agricultural innovation to new heights?
Image credit: Adobe
India is becoming a global leader in startups, ranking third after the US and China. A big part of this growth comes from agri-tech startups. These startups are transforming the agricultural value chain by connecting farmers, input dealers, wholesalers, retailers, and consumers. They ensure timely delivery of quality products and create strong marketing linkages.
Agritech is attracting investors, entrepreneurs, and other stakeholders. India had about 3,000 agritech startups in 2022, growing at 25% annually. Agriculture contributes 18.3% to India’s GDP and employs 158 million people. It’s essential for food security as the population is expected to reach 1.515 billion by 2030. Over 1,300 of these startups use advanced technologies like AI, machine learning, and IoT to boost productivity and efficiency.
The Indian government supported this growth by allocating over US$ 290 million in 2021-22 to integrate technologies like drones, AI, and blockchain into agriculture. This funding aims to modernize the sector and increase output and efficiency.
Notable agri-tech startups include SatSure, which provides solutions used by the Andhra Pradesh government and major banks; Fasal, which uses AI and data analytics for farming forecasts; Aibono, which offers precision farming technologies; Cropin, which provides farm management and analytics solutions; and Gold Farm, which offers agricultural equipment through a smartphone app. These startups are leading the way with their innovative solutions.
However, there is still room for improvement, and industry experts have specific expectations from the upcoming budget. Prem Kumar Vislawath, CEO and Founder of Marut Drones, emphasizes the need for easing regulations for both manufacturers and buyers in the sector. He advocates for easy financing for commercial drone use and a 100 percent subsidy on drone training certification programs through the Skill India initiative.
“We would also expect that the PLI scheme should be extended to component manufacturers as well. We would also like to emphasize the necessity of allocating substantial funds for Research & Development in the drone technology sector,” said Vislawath.
Mr. Vislawath also highlights the necessity of faster approvals in the urban air mobility space and reduced interest rates for drone loans. He points out that the current GST rate of 18% on agricultural machinery is a significant burden for Indian manufacturers and suggests reducing this rate to 3% to promote domestic production. Additionally, he calls for more initiatives similar to the Drone Didi Yojana to accelerate the adoption of drone technology. These measures will facilitate quicker integration of advanced technology, driving innovation and efficiency in agriculture.
Considering the insights from industry experts, the upcoming budget has the potential to address critical issues and significantly boost the Indian agritech sector. Despite the strides made so far and its expanding global footprint, agritech in India remains at a nascent stage, penetrating only 1% of its potential market value of US$ 24 billion. By easing regulations, enhancing financing options, and increasing R&D funding, the budget can catalyze the sector’s growth. With vast untapped opportunities, the right policy support can propel Indian agritech to new heights, driving innovation, efficiency, and productivity in agriculture. Will the budget rise to the occasion and unlock the sector’s full potential is yet to be seen.
You must be logged in to post a comment.
Stay ahead in the dynamic world of trade and commerce with India Business & Trade's weekly newsletter.