Unlocking India's Agribusiness Potential: A Path to Rural Development


Apurva Dhamankar

12/27/20232 min read

Do you know how much does Agriculture sector contributes to our GDP and employment?

It's 20.19% and decreasing despite having about 50 to 60 % population is employed in this sector, which is highest compared to other sectors.

Also despite having the majority of the population engaged in this sector the contribution to GDP is very low compared to the service sector contributing over 50% to GDP with just around 25% employment in the sector.

To make this sector productive and efficient, Agribusiness is a perfect option as we advance for the growth of India as well as the path to rural development as the majority of the population employed is from Rural areas only.

So how can we unlock India's agribusiness potential?

1) Improving Technology and Adoption

To improve operational efficiencies in agriculture, digital intervention is required like Artificial Intelligence (AI), Machine Learning, blockchain, IoT, and the use of drones and robots. The use of these technologies has already shown results with more and more startups succeeding in this sector namely 1) Cropin providing solutions related to AI, Crop Health, Machine Learning, and Precision farming. 2) Ninjacart provides solutions related to Fresh Produce Supply Chain, Advisory, Data Science, and Agri-tech & 3) Aibono provides similar technology.

Due to low farmer awareness and a high percentage of small landholdings, penetration of digital solutions is still going slow. To solve this problem government has launched Digital Agriculture Mission (2021 - 2025). Along with this government should also provide incentives to agri-tech start-ups through interest-free loans and tax incentives.

2) Improving the Supply chain Through Infrastructure Development

A greater need for agro logistics has arisen due to the increased production of fruits, vegetables, and processed food items, especially dairy, meat, frozen food, etc. A good number of startups have paved the way in improving this problem like 1) Agrowave 2) Bighaat 3) Dehaat & 4) Ergos. Still, more improvement is required and government can play a pivotal role by providing financial assistance and marketing facilities to entrepreneurs for setting up businesses, such as food processing and milk processing plants.

3) Ease Of Doing Business

Improving the ease of doing business in India's agriculture sector involves digitization, land reforms, infrastructure development, market reforms, and simplifying regulatory processes. Additionally, focusing on skill development, robust insurance mechanisms, government support, and fostering public-private partnerships is crucial for creating a more conducive business environment and promoting growth in the sector. For on-ground improvement, budgetary allocations should be made by the government

4) Market Access has to be Improved

To see growth in the agriculture sector and rural development, market access has to be improved by developing apps and e-portals to lower input costs and better price realization for the farmer. Madhya Pradesh's development in this area is remarkable by developing a farm gate app.

Thank you.


Milan Purohit,

Kautilya, IBS Mumbai.