India is among the 15 leading exporters of agricultural products in the world. Agricultural export from India reached US$ 38.54 billion in FY19 and US$ 35.09 billion in FY20.
The organic food segment in India is estimated to reach US$ 10.73 billion by 2025
The Indian food processing industry is expected to reach US$ 535 billion by 2025-26 on the back of government initiatives.
And, from now on, the adoption of many food safety and quality assurance mechanisms by the food processing industry will offer several benefits and the Agri export from India is likely to reach the target of US$ 60 billion by the year 2022.
The idea of adopting AgriTech’s practices in India is quite recent, but it is a necessary and recognized reality. 70% of the country’s agricultural land continues to depend on rainwater for irrigation and statistics prove that these farms produce 40% less than those with modern irrigation systems.
The agricultural sector in India has always faced many difficulties that are worsening with the reduction of groundwater levels, supply chain failures, economic barriers and fragmented land properties. The need to apply modern technologies is already recognized as the best way to improve the agricultural experience in India
According to a report at Inc42, Agritech’s Indian market is expected to reach US$ 24.1 billion in 2025. Agritech startups in India registered only US$ 204 million in 2020, which shows that this segment has not yet been explored.
The EU-India Innocenter supports Startups from different sectors at all stages of their journey to India and is a reliable and safe way to unite European solutions to the opportunities and needs of the Indian market.
For this article, we interviewed Abhilash Sethi from Omnivore about the opportunities and challenges that the market offers for startups in this sector.
Omnivore is a venture capital firm, based in India, which funds entrepreneurs building the future of agriculture and food systems. Check out the full interview below:
Where is India currently operating & plans to step in the upcoming 5 years?
I would say that we have 3 main problem-solving stages in the Agri Industry. The first would be to make market linkages efficient and make farmers earn better revenues from their products.
The second would be to optimize the cost of cultivation, reducing the cost of capital and precision farming technologies.
At the moment, India is operating well in these two problems. We hope that the focus will reach the third problem in the next 4-5 years, which would be to increase farms productivity through various technologies, such as biotechnology.
Your views on creating better Market Linkages in this sector to increase Productivity and Revenues for Farmers?
Market linkages will not solve the productivity problem of the farmers. It will ensure information symmetry so that supply-demand matching happens and farmers realize better revenues. It will help in solving the supply chain losses issue.
Various full stack and platform models are working successfully in this sector. Opportunity is huge here as the market is worth a couple of hundred billion dollars. Exports are going to be a huge driver of growth in India with the Government planning to increase exports to US$ 100 billion.
Share some insights on the Horticulture sector in India / Change in Diet / Future outlook on the Indian diet.
India will remain a carbohydrate-heavy market for the foreseeable future because of the large population. But, since the mid-1990s, the horticulture and protein sectors are growing at double-digits.
As the country will be moving from developing to developed in the coming years, diet is going to change to more proteins and horticulture products and percentage of carbohydrate will reduce.
What are the pain points of Farmers in India? How they can optimize their cost/margins associated with this sector. How Farmers can generate more revenues? Highlight the role of innovation in this dynamic.
Market linkage will be the key to make farmers realize better revenues. Digitized market linkages will ensure farmer get access to institutional credit thereby lowering their cost of capital. Precision farming technologies will play a role in reducing the cost of cultivation.
Scope in India concerning industries and companies that EU startups can work with. How do Farmer’s protest impact this Sector/Startups and innovation ecosystem?
EU startups can collaborate with startups and industries from extending their technology innovation point of view.
The farmer’s protest is geographical in nature and we have seen farmers openly adopting startups and their technology to do smart farming across India. It doesn’t have any serious impact.
Best practices for Foreign Agri tech Startups to enter Indian Markets (Ex: Israel Startups, Kesan, etc.)
A very good tip is: have a team in India. It’s is very important to partner with existing players to understand the dynamics on the ground and have them as your GTM channel
India is a complex nation and each region is like a different country in itself, that’s why geographical focus and understanding each region characteristics is key.
Your views on Indian solutions currently operational (JUGAAD Approach) for some of the problems wherein a structured solution is needed.
We don’t see any makeshift solutions for agriculture in India. We have government support, qualified professionals and currently companies and technologies are well structured and organized especially in the digital SaaS space. Of course, product companies still need to go a step further, but they have come a long way.
Where do you see the biggest opportunities for European founders to add value in the Agritech spectrum?
The country is growing visibly, the economy is strengthening and has impressive figures. We have a young and growing population and agriculture is in our blood and is part of our culture. It is an area that has a lot to offer. From my point of view, the great opportunities are in Biotechnology and some precision technologies.
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