In the economic growth, the agriculture plays a crucial role of some of the greatest nations in the India. With continuously increasing populace and increasing requirement of agricultural output to meet the rising requirement, the investments in the agriculture technology solutions have been increasing at an impressive pace around the world.
According to the report analysis, ‘India Agritech Market Outlook to FY’2025-By Nature of Services (Input Market Linkage & Farming as a Service, Supply Chain, Post Harvest Management & Output Market Linkage, Precision Farming, Advisory & Analytics and Agri Fintech)’ states that the India Agritech Market is in early growth stage with increasing awareness among farmers due to growth in internet penetration and mobile connectivity. Many agritech startups have entered the industry, especially in the last 5 years, seeing the potential of the industry. Government impetus in the form of setting up incubators, grants and welcoming into public-private partnerships with such players has also enthused entry of players across the sector. The sector is also monitoring high level of investment activity, with growing interest from venture capitalist firms and international investors. Throughout 2020 alone, the investment in the sector crossed USD 300 million. The complete agritech industry monitored a revenue growth of ~85% throughout FY’2019-FY’2020.
The segment entails of agritech startups proposing solutions such as credit, insurance, warehouse receipt financing, trade financing, etc. The sector is still at a nascent stage and has observed the entry of players majorly during the last 5-6 years. Shortage of access to organized credit, collateral and formal documentation is the greatest challenge faced by farmers that are often in require to small ticket sized loans. Agritech players are leveraging technologies alike geo tagging of farm lands and distant crop monitoring to build risk profiles of farmers and determine their credit worthiness. By partnering with banks, NBFCs and input suppliers, agritech players propose the loans at lesser interest rates than the unorganized lenders.
In addition, startups in the precision farming, advisory & analytics sector are still at a nascent stage and face the challenge of monetization at scale. Cropin is the principal player in the precision farming section. Within the input market connection and farming as a service segment, Agrostar was witnessed to be the leading player. The agri fintech space is presently lead by Samunnati’s NBFC arm and Origo Finance. Most market players in the agritech industry contend on the basis of parameters such as number of farmers on-boarded, partnerships, physical touch points, geographical occurrence, and many other.
The industry is predicted to observe a CAGR of ~32.0% on the basis of revenue by FY’2025. The effective growth in rural smartphone and internet penetration is anticipated to contribute to greater adoption agritech solutions across the country. ~410 million new smartphone users are projected to be added to India’s present user base by 2025, without majority of the need coming from rural locations. Geographical expansion to dissimilar states by agritech players is also expected to be observed in the coming years. The entry of new players with end-to-end solutions along the agribusiness value chain is projected for the future.
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