The time is now for European agricultural companies to make investments in the Indian market

 

In light of the fact that the world's population will reach 7.9 billion this November and is expected to reach 9.8 billion by the year 2050, food security has emerged as a major issue. Action must be taken immediately in order to address the shortage of resources, access and distribution problems, and the requirement to increase agricultural outputs. To address this crisis, policymakers around the world are looking for sustainable ways to integrate agricultural practices with technology.

India's agricultural sector's economic contribution

The farming (crops and horticulture), forestry, livestock (milk, eggs, and meat), and fisheries industries make up the bulk of the Indian agricultural sector. It contributes 11.9 percent of the $3,320.4 billion in global agriculture gross value added (GVA), which is second only to China, and accounts for 12 percent of India's exports. The sector also affects the dynamics of consumption and production in non-agricultural sectors like consumer goods, retail, chemicals, and e-commerce.

The agricultural sector is crucial to India's economic output and potential for growth due to economic interconnections. It's another reason why the industry desperately needs reform.

India's agricultural economy is disorganized and fragmented

The entire value chain—from the supply of agricultural inputs to the production and transformation of agricultural products to their distribution to final consumers—is covered by the agribusiness ecosystem, which includes all business activities carried out from farm to fork. The rapid urbanization, diet diversification, shifting consumer preferences, and growth of the food markets have all contributed to the ecosystem's further expansion into segments like e-commerce and hyperlocal.

The agriculture value chain still has multiple levels of intermediaries and middlemen, so it is still largely disorganized and fragmented. In spite of the fact that 86 percent of India's small and marginal farmers continue to be its main sources of food and nutrition, they are still limited by things like having extremely small landholdings of less than two hectares.

How does agritech boost India's agricultural sector's productivity and efficiency?

Agritech is primarily used to describe an ecosystem of businesses and startup ventures that are leveraging technological advancements to offer goods or services for boosting yield, efficiency (both in terms of time and cost), and profitability for farmers across the agriculture value chain. The various agritech industry segments that support the overall value chain include:

1) Market linkage: farm inputs are linked to the market through physical infrastructure and a digital marketplace.

2) Biotech: studying the biology and genomics of plants and animals.

3) Agriculture as a service: pay-per-use rental of farm machinery.

4) Precision agriculture and farm management: using geospatial or weather data, IOT, sensors, robotics, etc. to increase productivity; farm management solutions for resource and field management, etc. are examples of precision agriculture and farm management.

5) Farm mechanization and automation: mechanization and automation in agriculture: industrial automation that uses equipment, tools, and robots for planting, handling raw materials, harvesting, etc.

6) Farm infrastructure: Farm infrastructure includes farming methods like drip irrigation, indoor-outdoor farming, greenhouse systems, and environmental controls like heating and ventilation.

7) Quality management and traceability: Production monitoring, quality control, analysis, and traceability during storage and transportation are all aspects of quality management.

8) Supply chain technology and output market linkage: Linking the market for farm output and the supply chain requires a physical infrastructure and digital platform to manage the post-harvest supply chain.

9) Financial services: Credit facilities for purchasing equipment, inputs, and other items, as well as crop insurance or reinsurance.

10) Advisory/Content: Information platforms for pricing, market, and agronomic information are available online.

Why do agricultural businesses from Europe invest in the Indian market?

1) A sizable and expanding market: India has a sizable agricultural sector and a sizable population that depends on farming for a living. There is a sizable demand for agricultural products due to the nation's expanding middle class, urbanization, and population growth. European businesses can take advantage of this enormous market opportunity and meet the changing demands of Indian consumers.

2) Governmental Reforms and Initiatives: The Indian government has carried out a number of reforms and initiatives to strengthen the agricultural industry. These consist of budget allocation increases, modernization plans for agriculture, and welcoming foreign investment policies. These government initiatives can be used by European businesses to build a strong presence and gain access to favorable regulations.

3) Technology and Innovation: When it comes to cutting-edge farming methods and technological developments, European agricultural companies frequently lead the way. The adoption of these cutting-edge technologies, such as crop management solutions, smart irrigation systems, and precision farming, can benefit India's agriculture industry. Such technologies can be introduced and put into use by European businesses to help modernize and increase the productivity of Indian agriculture.

4) Organic and Sustainable Farming: In India, there is a rising awareness of and demand for organic and sustainable farming methods. India is a willing market for European businesses with experience in organic farming, sustainable agriculture, and agroecology. More and more buyers are looking for goods that are safe for the environment, free of dangerous chemicals, and made using sustainable methods.

5) Collaborations: Partnerships between European and Indian agricultural companies can promote information sharing, technology transfer, and joint R&D projects. European businesses can collaborate with their Indian counterparts to take advantage of local knowledge, gain access to distribution networks, and modify their goods and services to meet the demands of the Indian market.

6) Opportunities for Export: Investing in the Indian agricultural market can give European businesses the chance to export their goods to India and its neighbors. India's proximity to other Asian markets gives European businesses access to a larger customer base, allowing them to increase their market share and level of global competitiveness.

7) Long-Term Potential: As the nation continues to invest in agribusiness development, irrigation systems, and agricultural infrastructure, India's agricultural sector has the potential to grow over the long term. European businesses can position themselves for long-term growth and take advantage of the changing demands of the agriculture sector by entering the Indian market.

Bottom Line

In conclusion, there are compelling reasons for European agricultural companies to invest in the Indian market. Along with government initiatives and reforms, India's sizable and expanding market offers numerous opportunities for growth and financial success. European businesses bring cutting-edge technologies, novel approaches, and sustainability knowledge that can cater to the changing needs of Indian consumers and help modernize the agricultural industry. Collaborations with Indian partners can promote market access and knowledge sharing. The possibility of exporting goods to India and its neighbors also adds to the allure of making investments in India. The Indian market presents a promising opportunity for business expansion and success for European agricultural companies thanks to its long-term growth potential and friendly business environment.