According to the Department of Industrial Policy and Promotion (DIPP), the Indian
agricultural services and agricultural machinery sectors have cumulatively attracted
Foreign Direct Investment (FDI) equity inflow of about US$ 2,278.3 million from April
2000 to March 2016.
Some major investments and developments in agriculture in the recent past are as
follows:
Intertek Group, a UK-based total quality assurance provider, has launched an agricultural technology
(Agritech) Laboratory in Hyderabad, which will perform high-tech deoxyribonucleic acid (DNA) analyses
for the agri-biotech, plant seeds.
ITC Ltd, one of India's leading fast-moving consumer goods (FMCG) company, plans to make Andhra
Pradesh a hub for its agricultural business operations.
Mahindra and Mahindra Ltd has acquired 35 per cent stake in a Finnish combine harvesters
manufacturer, Sampo Roselnew Oy, for US$ 20.46 million and will jointly focus on the combine
harvester business in Asia, Africa and Eurasian Economic Union countries.
The Small Farmers Agri-Business Consortium (SFAC) plans to organise camps in Madhya Pradesh and
Chhattisgarh to promote its venture capital assistance scheme (VCAS), which seeks to provide capital
and project development facility (PDF) to agri-business entrepreneurs.
Agri-research institute ICRISATs incubation arm is looking to set up a Rs.100 crore (US$ 14.67 million)
fund in a year, an initiative that could help small entrepreneurs from the agri-business and nutrition
space raise money.
Mahindra & Mahindra (M&M), Indias leading tractor and utility vehicle manufacturer, announced its
entry into pulses retailing under the brand NuPro. Going forward, the company plans to foray into eretailing and sale of dairy products.
Fertiliser cooperative IFFCO launched a joint venture with Japanese firm Mitsubishi Corp for
manufacturing agrochemicals in India.
Acumen, a not-for-profit global venture fund, has invested Rs 11 crore (US$ 1.7 million) in Sahayog
Dairy, an integrated entity in the segment, based at Harda district in Madhya Pradesh.
Rabo Equity Advisors, the private equity arm of Netherlands-based Rabo Group, raised US$ 100 million
for the first close of its second fund India Agri Business Fund II. The fund plans to invest US$ 1517
million in 1012 companies.
Oman India Joint Investment Fund (OIJIF), a joint venture (JV) between the State Bank of India (SBI)
and State General Reserve Fund (SGRF), invested Rs 95 crore (US$ 13.94 million) in GSP Crop
Science, a Gujarat-based agrochemicals company.
Government Initiatives
Given the importance of the agriculture sector, the Government of India, in its Budget
201617, planned several steps for the sustainable development of agriculture.
The government has drawn up a five-year roadmap to increase pulse production from nearly 17.06 MT
in 2015-16 to 24 MT in 2020-21 through a dedicated action plan.
Prime Minister Mr Narendra Modi has unveiled the operational guidelines for the Pradhan Mantri Fasal
Bima Yojana which aims to provide farmers with crop insurance as well as
The Cabinet Committee on Economic Affairs (CCEA) has approved Blue Revolution, an umbrella
scheme for integrated development and management of fisheries by Government of India, with total
financial outlay of Rs 3,000 crore (US$ 440.15 million) for a period of five years.
Mr Piyush Goyal, Minister of Power, Coal, New and Renewable Energy has announced that
governments plans to invest Rs 75,000 crore (US$ 11.08 billion) in an energy-efficient irrigation scheme
over the next three to four years.
The new crop insurance scheme for farmers 'Bhartiya Krishi Bima Yojana' aims to cover 50 per cent of
the farmers under the scheme in the next two-three years,
India and Lithuania have agreed to intensify agricultural cooperation, especially in sectors like food and
dairy processing.
Gujarat Government has planned to connect 26 Agricultural Produce Market Committees (APMCs) via
electronic market platform, under the National Agriculture Market (NAM) initiative.
The State Government of Telangana plans to spend Rs 81,000 crore (US$ 11.88 billion) over the next
three years to complete ongoing irrigation projects and also undertake two new projects for lifting water
from the Godavari and Krishna river.
The National Dairy Development Board (NDDB) announced 42 dairy projects with a financial outlay of
Rs 221 crore (US$ 32.42 million) to boost milk output and increase per animal production of milk.
Government of India has set up an inter-ministerial committee, which will look into ways to examine the
potential of Indian agriculture, identify segments with potential for growth, and work towards doubling
farm incomes by 2022.
The Government of India has allocated Rs 200 crore (US$ 29.9 million) for electronically linking 585
major wholesale agriculture markets across the country, thereby creating a National Agriculture Market
(NAM) in July 2015 for three years
Road Ahead
The agriculture sector in India is expected to generate better momentum in the next
few years due to increased investments in agricultural infrastructure such as
irrigation facilities, warehousing and cold storage. Factors such as reduced
transaction costs and time, improved port gate management and better fiscal
incentives would contribute to the sectors growth. Furthermore, the growing use of
genetically modified crops will likely improve the yield for Indian farmers.
According to the National Institution for Transforming India Aayog (NITI Aayog),
Indias agriculture sector is expected to grow 6 per cent in FY 2016-17 in case of
normal monsoon during the June-September period. The 12th Five-Year Plan
estimates the foodgrains storage capacity to expand to 35 MT. Also, a 4 per cent
growth would help restructure the agriculture sector in India in the next few years.