India Agriculture Market Outlook to 2028

India Agriculture Market Overview

• The India agriculture market is valued at approximately USD 372.9 billion, according to a comprehensive review of five-year historical data, and is propelled by increased government initiatives, advancements in technology, and a growing demand for food security to support the expanding population. Key drivers include subsidies on fertilizers, improvements in irrigation systems, and the promotion of precision agriculture practices. The market also benefits from a rise in agri-tech innovations that streamline supply chains and reduce waste, significantly enhancing productivity.

• In India, states like Punjab, Maharashtra, and Uttar Pradesh lead the agriculture sector, thanks to fertile land, favorable climatic conditions, and substantial government support. Punjab is well-known for its high productivity levels due to extensive irrigation systems, while Maharashtra excels in horticultural crops and has benefited from infrastructure for exports. Uttar Pradeshs dominance stems from its vast cultivable land and diverse crop production, particularly in staples like wheat and sugarcane. These states, due to their infrastructure and policy support, play a central role in the nations agriculture landscape.
• Launched to monitor soil quality, this scheme has distributed 110 million Soil Health Cards, which provide detailed analysis for nutrient management. This effort has improved yield and soil quality across major agricultural states in India.

India Agriculture Market Segmentation

By Crop Type: The India Agriculture market is segmented by crop type into cereals & grains, fruits & vegetables, oilseeds & pulses, cash crops, and others. Recently, cereals & grains have a dominant market share within this segment due to the high domestic consumption of rice and wheat as staple foods. Strong government support in the form of Minimum Support Price (MSP) for these crops, coupled with the National Food Security Act, has reinforced their position. Additionally, the public distribution system aids in stabilizing demand, leading to consistent production levels.

By Input Type: The India Agriculture market is also segmented by input type, including seeds, fertilizers, pesticides, and farm machinery. Fertilizers hold a dominant market share within this segment, driven by the critical need to enhance crop yields amidst limited arable land. Government subsidies on fertilizers, particularly urea, encourage farmers to adopt high-yield practices, increasing the overall demand. Fertilizers have become integral to intensive farming, making them the preferred input for most Indian farmers.

India Agriculture Market Competitive Landscape

The India agriculture market is influenced by a blend of local players and multinational corporations, with key companies such as ITC Limited, Godrej Agrovet, and Mahindra Agribusiness dominating due to their robust distribution networks and diverse product offerings. These companies are recognized for their focus on sustainability and digital farming solutions, positioning them as leaders in the rapidly evolving agri-tech landscape.

India Agriculture Industry Analysis

Growth Drivers

• Government Support and Subsidies: Indias agricultural sector has seen significant support through government subsidies and schemes, with direct benefits to approximately 146 million farmers (Ministry of Agriculture, India). The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) disbursed INR 1.75 trillion in direct transfers between 2019-2023, supporting small farmers incomes. Government subsidies for fertilizers, which reached INR 2.25 trillion in 2023 (Union Budget), have eased the financial burden on farmers, ensuring affordable input costs. This financial support has driven crop productivity and improved food security by enhancing crop yield.
• Technological Advancements in Farming Techniques: Modern farming technologies are increasingly integrated into Indias agriculture, with over 300,000 farm equipment units distributed through the Farm Machinery Training & Testing Institutes (FMTTI) since 2022 (Agricultural Census, India). The use of mechanized tools has resulted in a productivity gain of 15-20%, especially in high-yield crops such as rice and wheat. Digital platforms for crop monitoring have been expanded, directly improving resource efficiency across Indias 157 million hectares of agricultural land.
• Rising Demand for Food Security: Indias food grain production reached 326 million tonnes in 2023, marking an increase driven by the national focus on self-sufficiency. Amid increasing population and climate concerns, food security remains a priority. The government has strengthened procurement channels for crops, ensuring that around 85 million metric tonnes are secured annually for the Public Distribution System, benefiting over 800 million people across rural and urban India

Market Challenges

• High Dependency on Monsoon: Agricultural output is heavily monsoon-dependent, with nearly 52% of farmland being rainfed (Ministry of Jal Shakti, India). Inconsistent rainfall patterns have resulted in crop yield variability, impacting annual output levels. The Indian Meteorological Department (IMD) reported a 6% rainfall deficit in 2023, which affected key kharif crops like paddy, leading to food inflation concerns.
• Fragmented Landholdings: Indias average farm size is approximately 1.08 hectares, limiting economies of scale and efficient resource utilization (Agricultural Census, India). Small landholdings restrict mechanization and reduce productivity potential, especially in high-value crop sectors like horticulture. Fragmented holdings present challenges in managing irrigation, machinery, and technology, which are crucial for sustained agricultural productivity.

India Agriculture Future Outlook

Over the coming years, the India agriculture market is projected to undergo significant growth driven by supportive government policies, advancements in farm mechanization, and rising investments in sustainable agricultural practices. The integration of digital platforms to enhance supply chain efficiency and the adoption of organic farming practices are also expected to play a key role in shaping the sectors future. This evolution is anticipated to lead to increased production capabilities and sustainable growth for farmers and agri-businesses alike.

Opportunities

• Expansion of Organic Farming: Indias organic farming sector covers over 2.8 million hectares, ranking among the largest globally. The shift towards sustainable agriculture is encouraged by subsidies under the Paramparagat Krishi Vikas Yojana (PKVY), benefiting more than 1.5 million farmers in 2023. Rising global demand for organic produce provides further opportunity, as India exported 140,000 tonnes of organic food worth INR 7,500 crore in 2023.
• Increasing Exports of Agricultural Produce: Agricultural exports grew to INR 4.5 trillion in 2023, with major contributions from rice, wheat, and spices (Directorate General of Foreign Trade, India). Export facilitation policies have increased shipments to markets like the Middle East and Southeast Asia, securing demand for Indias diverse produce and strengthening the market position of Indian agribusinesses.