AgriTech in India presents abundant opportunities for entrepreneurs who are doing a startup in the Agritech sector. The South Asian country India is known to be one of the fastest growing economies in the world, and Indian products and practices are making their mark all over the world. In a country of over 1bn people, still, around 51% of the total workforce is engaged in agriculture and its allied sectors. India is expected to remain a predominantly agricultural society for most of the 21st century. Agrarian growth here plays a vital role in securing and feeding India’s food and nutritional needs, as well as in improving rural incomes in India. It is interesting to note, that according to the World Bank, India has 395 million acres of land available for cultivation, out of which only 215 million acres are cultivated. Owing to the mentioned factors, AgTech (Agriculture Technology) or Agritech is an interesting space in India.
Agriculture in India is an unimaginably huge sector. Not only is India the largest producer of milk, but also the second largest producer of sugar. On the contrary, India is also the largest importer of Pulses. It is interesting to note that the current Indian government, along with efforts of the various state departments, are making efforts to improve the lives of farmers in India. The current PM, Mr. Narendra Modi’s government, has an aim to double a farmer’s average income by 2022. This also opens up doors for technology to enter and help farmers increase livelihood and income levels, making AgTech or Agritech in India a social movement.
By 2020, the Indian population is expected to be 1.4 billion by 2020. The growing income, with the rising population, will lead to more demand for non-food and food grain crops. This puts a lot of pressure on Indian agriculture to achieve and maintain a consistent and higher growth rate of 4% per annum.
We had earlier shared that the investment trend for agritech in India was booming as India raised $313 million from 53 startups in 2016. The growing entrepreneurship sector here with added support and a renewed interest in agriculture from a social point of view is ensuring that more and more companies are innovating in the agritech space. It is also essential to take into account an increase in startup activity has occurred due to an increase in internet connectivity as well as mobile usage in India. Presently, more than 88% households in India have access to mobiles, and increased usage of 3G and 4G enabled smartphones.
Agriculture in India, the demand-supply gap and opportunity for Agritech startups in India
It is very tough to fathom how big the agriculture sector is in India, and what an important role it plays as a contribution to GDP as well as in the socio-economic fiber of the country. The total food grain production in May 2017 was at 273.38 million tonnes, as stated by the Ministry of Agriculture in India. There was a wheat import of more than 2.7 million tonnes in 2017 (until January 16, 2017) and an additional 1.2 million tonnes are to be imported by February 2017.
It is estimated that India’s GDP will grow at 7% in 2016-17, due to increasing consumption. In the same year, the agriculture GDP of India is also expected to increase at 4%, and reach USD 1630 billion. It is interesting to note that India’s food grain production in 2016-17 is touted to be 271.98MT. Due to these factors and increased government intervention, the Indian agriculture is set to grow leaps and bounds. This is also good news for agritech in India as it gives more opportunities of AgTech to grow.
But there a number of problems that the agriculture industry face here in India. One of the main reasons for lower farm productivity in India is lack of access to new age and smart technology. The average farmer in India (more than 85% of them actually) earns a small amount of INR 6400 (less than USD 100) p.m. on an average and are owners of less than 2 hectares of land. Some of the other reasons for lower productivity include erratic monsoon seasons, decreasing arable land, unpredictable climate, and inefficiencies in the supply chain.
Agritech Startups in India
AgriTech in India is currently gaining a lot of internal and foreign support. There are opportunities for startups in this space in areas like improving nutritional value, organic farming, increasing crop production, reducing wastage and improving the overall supply chain, easy availability of farm mechanization as well as increasing connectivity of farmers to the masses by linking consumers and producers.
Over $3.23 bn has been invested in the Agritech companies worldwide, and this includes over 53 startups from India agritech space, totaling an investment of USD 313 million. Internationally, more than 40% of the funding was grabbed by food e-commerce or food marketplaces; biotechnology startups came second in the list by grabbing 22% of the total funding. Innovative concepts on precision agriculture tech like devices for capturing data and management software for farms grabbed more than USD 405 million. The fourth popular category was Novel Farming Systems, which means companies that are using tech innovatively for production of agricultural products, with over USD 247 million grabbed by this sector.
There are a number of interesting startups in Agritech in India using innovative technologies to leverage this sector. Some of them are:
RML AgTech – RML AgTech, a company providing agricultural support solution on mobile phones to farmers, was in the news recently for raising $4 million from IvyCap Ventures, a private equity firm.
Distinct Horizon – They are unique as they have created a machine that helps place urea fertilizer deeply in plants, to promote the increase in crop productivity and change farming in India.
RavGo – RavGo is better known as an uber for large farm machinery. It is an online rental marketplace for farm machinery which gives renewed hope to farmers that might not be able to afford expensive, heavy machinery.
AgroStar – AgroStar is using tools of agronomy, data analytics, and m-commerce to create solutions for the average Indian farmer to help digitize their farms, by simply a missed call or via the app.
KisanNetwork – A Y Combinator-backed company, Kisan Network is an online marketplace for Indian agriculture. It allows the Indian farmer to sell his produce directly to institutional buyers.
V Drone Agro – Using the advanced tool of thermal imaging, VDrone Agro use drone cameras and an inbuilt software that helps read thermal images of food making plants. They are then able to analyze the images and to tell the farm owner which areas of farm are fertile and which are not.
Plantix – A mobile crop advisory platform for farmers, Plantix can diagnose plant diseases, pests and nutrient deficiencies affecting your crops using artificial intelligence algorithms and geo-tagging.
Other than this, there are a number of platforms in agtech or Agritech in India that are selling farm vegetables and fruits directly online like WayCool Foods, Paalak.in, E-Vegetailing, Farmily, MandiTrades, Lawerencedale and Lemon Leaf.
Some strategic developments in the Agritech sector are ensuring the Agritech in India has a bright future. For example- India has signed a bilateral investment agreement with Brazil for encouraging and enhancing cooperation in agriculture, amongst other sectors.
Way forward for AgriTech in India
With some factors on the demand side driving the agriculture growth like increasing population, rise in income levels and exports and increased consumption. Clubbed with government and local as well as foreign VC support, agritech in India has a bright future. The need is for all stakeholders to come together and build for a stable future of this sector. Owing to all these factors and increased adoption of technology, we can expect a number of innovative startups in AgriTech in India.
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