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Importance of Agriculture

Agriculture plays a vital role in India’s economy. Agriculture, with its allied sectors, is the largest source of livelihood in India. 54.6% of the total workforce is engaged in agricultural and allied sector activities while 57.8% of rural households are engaged in agriculture. Taking small and marginal holdings together, agriculture constituted 86.08% of the total land holdings in 2015-16, according to the Annual Report (2020-21) of the Ministry of Agriculture and Farmers Welfare. Importantly, 30.33% of total cultivators and 40.67% of agriculture labour are women.

India has the second-largest arable land resources in the world. With 20 agri-climatic regions, all the 15 major climates in the world exist in India. The country also has 46 of the 60 soil types in the world.

India is the largest producer of pulses, jute, milk, tea and the second largest producer of tobacco, wheat, rice, fruits and vegetables, sugarcane, cotton, and oilseeds.

India’s Position in World Agriculture
Sl.No. Crop India’s
(Million Tonnes)
(Million Tonnes)
% Share of
1 Pulses 21.56 84.69 25.45 1st
2 Jute* 1.76 3.52 49.95 1st
3 Wheat* 107.74 808.45 13.33 2nd
4 Sugarcane* 439.42 2025.97 21.69 2nd
5 Groundnut* 10.13 54.29 18.67 2nd
6 Paddy* 196.25 778.04 25.22 2nd
7 Tobacco 0.75 6.09 12.30 2nd
8 Tea^ 1.36 6.47 21.09 2nd
9 Potatoes* 56.18 374.84 14.99 2nd
10 Onion (Dry)* 26.64 106.59 24.99 2nd
11 Cotton^^ 5.3 25.2 21.05 2nd

Source: Pocket Book of Agricultural Statistics 2021, Ministry of Agriculture and Farmers Welfare, Govt. of India;  * FAOSTAT , ^ Tea Board of India (69th Annual Report) and ^ ^United States Department of Agriculture 

According to the Economic Survey 2022-23, agriculture sector has been growing at an average annual growth rate of 4.6 per cent during the last six years. It grew by 3.0 per cent in 2021-22 compared to 3.3 per cent in 2020-21. In recent years, India has also rapidly emerged as the net exporter of agricultural products.

The sector, which is the largest employer of workforce, accounted for a sizeable 18.8 per cent (2021-22) in Gross Value Added (GVA) of the country. Growth in allied sectors including livestock, dairying and fisheries has been the major drivers of overall growth in the sector.

Share of Agriculture in GDP and Employment
Sl.No. Country Agriculture, Forestry and Fishing
– Value Added
(% of GDP)
Employment in
(% of Total
1 India 18 43.0
2 Indonesia 13.3 29
3 China 7.3 25
4 Turkey 5.5 18
5 Mexico 3.9 12
6 Brazil 6.9 9
7 Russia 3.8 6
8 South Africa 2.5 5
9 Republic of
1.8 5
10 European
1.6 4

Source: World Development Indicators, World Bank; Pocket Book of Agricultural Statistics 2021, Ministry of Agriculture and Farmers Welfare, Govt. of India. 

India can be among the top five exporters of agro-commodities by shifting its focus on cultivation and effectively handholding farmers, according to the World Trade Centre. The total agricultural and allied products exports stood at US$ 41.25 billion in FY21.

Given the importance of the agriculture sector, Government of India has taken several steps for its development in a sustainable manner. Steps have been taken to improve the income of farmers. Further, to mitigate risk in the agriculture sector, a scheme “Pradhan Mantri Fasal Bima Yojana” (PMFBY)was also launched in 2016. Schemes such as Formation & promotion of 10,000 Farmer-Producers’ Organizations and the Agriculture Infrastructure Fund have also been launched recently to benefit the sector.

Pradhan Mantri Gram Sinchai Yojana (PMGSY) is another scheme aiming to irrigate the field of every farmer and improve water use efficiency to achieve the motto, `Per Drop More Crop’. Overall, the scheme ensures improved access to irrigation.

  1. Annual Report – 2020-21, Ministry of Agriculture and Farmers Welfare, Government of India
  2. The Economic Survey 2021-22, Government of India
  3. https://www.ibef.org/industry/agriculture-presentation