A period of prosperity lies ahead for the India agritech sector after Union Budget 2023 announcement | CPT PPP Coverage

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India has predominantly been an agrarian economy, and has grown to become a global agricultural powerhouse over the years. Agriculture is a significant contributor to the country’s GDP, accounting for approximately 16 per cent of the GDP and providing employment to 44 per cent of the national workforce. Bringing the golden touch of technology to the agriculture sector of the country, agritech ventures in the country have reimagined the farming and agrifood processing domains.

As per a report by Ernst & Young, agritech startups in India offer an opportunity of $24 billion by 2025. Still significantly untapped, the industry has so far received private equity investment amounting INR 66 billion. India’s agriculture sector has grown 4.6 per cent over the last six years with over 1,000 agritech start-ups having emerged in the sector. The government has been quite supportive of digitization of various sectors, and agritech, as a tech-enabled concept, has greatly benefitted from it. 

The government’s vision for the Indian economy is to create a technology-driven and knowledge-based economy. The Government of India has been increasingly adapting to the ongoing innovations and changes in the agricultural sector to keep up with the pace at which the sector is developing globally. Through government support in terms of policymaking, agritech sector in India has prospered over the years. The latest announcement for the Union Budget 2023 is expected to further propel this growth.

The agri-tech industry is one of the most important pillars to build a sustainable future due to its high demand in India and the global market. The Economic Survey of India 2022-23 highlighted that. Taking cognizance of the crucial nature of the sector, the government, in its budget announcement for this year, included a host of new provisions created to boost the nascent agritech ventures in the country, the most notable one being an Agriculture Accelerator Fund to be set up to encourage agri-startups in rural India. 

Agritech brings new changes and innovation to existing agricultural practices with the help of digitalisation and modern techniques. Infrastructural challenges plague the sector. However, the government has addressed this issue by announcing the computerisation for 63,000 primary agricultural credit societies through an investment of INR 2,516 crore, and a greater emphasis on digital payments through a scheme for digital agriculture infrastructure. In the past, a greater impetus has been provided by the government for infrastructural development in agriculture through Agriculture Infrastructure Fund (AIF), which, working as a part of the nation’s agriculture fund, has supported more than 18,321 projects totalling INR 13,681 crore.

The boost that the digitization of agriculture has received from the policymakers, combined with the launch of an Agriculture Accelerator Fund, will pave way for fresh opportunities for businesses and individuals in the country and for the global community at large. Through steady steps taken in the direction of creating a robust agritech ecosystem, India today offers a huge scope for investment in the agritech sector. The agritech sector in India is ready to cement the country’s position as the agrarian leader of the world through the modernization and digitization of agricultural practices and related processes, ushering in a new era of prosperity.

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