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Agri Scenario

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Digital agriculture refers to the application of modern information and communication technologies (ICTs) to improve various aspects of agricultural practices, farm management, and rural development. It involves the integration of digital tools, data analytics, sensors, and other technologies into agricultural processes to enhance productivity, efficiency, and sustainability.

As part of the Digital India programme, India can potentially unlock $50-70 billion through digital agriculture by 2025. The Digital Agriculture initiative announced by the Government of India for the next five years is a step in this direction. With the scale of government, relevant datasets can be digitized for easy access to government schemes and advisories. The availability of anonymised datasets on weather, remote sensing images, crop yield can lead to innovative and scalable solutions by companies and startups.

Key elements of the concept of digital agriculture in India

Farm Management Systems: Digital platforms and applications are used to manage and monitor various farm activities such as crop planning, soil and water management, pest and disease control, and farm equipment utilization. These systems help farmers make informed decisions based on real-time data, weather information, and predictive analytics.

Precision Agriculture: Digital technologies like Global Positioning Systems (GPS), remote sensing, and satellite imagery are employed to collect data about soil conditions, crop health, and weather patterns. This data is analyzed to enable precise and targeted application of inputs such as fertilizers, pesticides, and water, resulting in optimized resource utilization and increased yields.

Agricultural Extension Services: Digital tools are utilized to disseminate agricultural knowledge, best practices, and market information to farmers. Mobile applications, online portals, and SMS-based services are used to provide timely advice on crop management, weather alerts, market prices, and access to credit and insurance.

Market Linkages: Digital platforms and e-commerce solutions connect farmers directly with buyers, eliminating intermediaries and improving market access. Online marketplaces enable farmers to sell their produce at competitive prices and reach a wider customer base. Digital payment systems also facilitate secure and transparent transactions.

Data Analytics and Artificial Intelligence: Advanced analytics techniques and AI algorithms are applied to agricultural data to generate insights, predict crop yields, identify disease outbreaks, and optimize resource allocation. This helps farmers make data-driven decisions, reduce risks, and improve overall productivity.

Internet of Things (IoT) and Sensors: IoT devices and sensors are deployed in the field to collect real-time data on soil moisture, temperature, humidity, and crop growth. This data is transmitted wirelessly to central systems for analysis, enabling timely interventions and efficient resource management.

The concept of digital agriculture in India aims to address the challenges faced by farmers, such as resource constraints, climate variability, market volatility, and limited access to information and services. By harnessing digital technologies, it seeks to transform Indian agriculture into a more sustainable, productive, and profitable sector, contributing to food security, rural livelihoods, and overall economic development.

Policies enabling private sector partnerships with governments in digital agriculture are the need of the hour as this can leapfrog innovation and provide immense benefits to farmers. Coupled with sandboxes where agri-tech startups can quickly test products, this would greatly accelerate innovation. Finally, agri data exchange initiatives that connect various data providers, consumers and service providers can unlock the power of data and solve for availability and quality of data.

Benefits of Digital Agriculture

Implementing these technological solutions enable reliable management and monitoring of farms. As farmers get a complete digital analysis of farms in real-time, they can act accordingly and don’t have to apply excess pesticides, fertilizers and reduce overall water consumption.

Other benefits include:
  • Increases agriculture productivity and lowers production cost
  • Inhibits soil degradation
  • Lessens chemical application in crop production
  • Promotes effective and efficient use of water resources
  • Uplifts socio-economic status of farmers
  • Reduces environmental and ecological impacts

Digital agriculture has excellent potential in India to resolve many of the existing problems that farmers face to realize value and provide strong competition in national and global markets. Its success will depend on policy and legal enablers along with significant public private partnerships. Given the direction that the union and various state governments have taken in recent times along with the booming growth of agri-startups in the country, India is on the right path to transforming its agricultural sector and providing accelerated value to all farmers.


  1. Digital Agriculture, Catalyst and Challenges, Journal of FKCCI – June 2023
  2. Ministry of Agriculture & Farmers Welfare, GoI
  3. Economic Survey – 2022-23

Farm Mechanisation in Indian Agriculture

Farm mechanisation plays an important role in sustaining agricultural growth.

Effective use of agriculture machinery helps to increase productivity & production of output, undertake timely farm operations and enable the farmers to quickly rotate crops on the same land. By raising a second crop or multi-crops from the same land, there is improvement in the cropping intensity and making agricultural land commercially more viable.

There has been a strong focus on improving agricultural productivity through farm mechanization to meet the increasing demand for food. The Indian government has implemented various schemes and initiatives like Rashtriya Krishi Vikas Yojana (RKVY), Sub-Mission on Agricultural Mechanization (SMAM), and Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) to promote the adoption of farm mechanization practices across the country.

By 2030, the world population is projected to reach 8.5 billion, which makes it crucial to find solutions to fulfil future food, feed and biofuel requirements. In the near future, most of the additional demand for food is expected to be from the regions experiencing high population growth, particularly India, the Middle East, North Africa and Sub-Saharan Africa.

The agricultural sector not only contributes towards securing livelihoods of large populations of developing countries but also helps to sustain economic growth in developed economies.

Share of agriculture in GDP and percentage of workforce employed
in the agriculture sector
Country Contribution to GDP Agri Workforce
India 16% 43%
Indonesia 13.3% 29%
Brazil 6.9% 9%
China 7% 25%
Russia 3.8% 6%
EU 1.6% 4%

Agriculture sector accounts for 16% share of India’s GDP and 43% of total employment. Even with a lower rate of technology adoption, total foodgrain production in India rose from around 50 million tonnes in 1950-51 to over 300 million tonnes in 2022-23.

Evidence suggests that the true potential of agriculture in developing economies has not yet been realised, especially in regions where small and marginal landholders predominate. In this scenario, India could have a leading role in the subcontinent by developing economically viable and scalable solutions to ensure a sustainable rise in per unit productivity.

Farm mechanisation encompasses use of technology and machinery to improve production, productivity, and profitability. Currently, India’s level of mechanisation is at 40% compared to 90% across the developed nations.

Current status of mechanisation vis-à-vis contribution of agriculture to GDP
Country Contribution to GDP Farm Mechanisation Level
USA 1% 95%
Europe 1.4% 95%
Russia 3.1% 85%
Brazil 4.3% 75%
China 7.5% 50%
India 15.9% 40%
Share of mechanization of farm activities in India
Type of Operation Percentage of Operations Mechanised
Soil working & seed bed preparation 40%
Seeding and planting 29%
Plant protection 34%
Irrigation 37%
Harvesting and Threshing 60 – 70%

Mechanisation is significantly low in paddy sowing / planting and harvesting of cotton, sorghum, millets and oilseeds. Land preparation or seedbed preparation across all the major crops is highly mechanised.

Northwestern States of the country, such as Haryana, Punjab and Uttar Pradesh, have a higher level of mechanisation compared to their eastern counterparts. The level of mechanisation has also been influenced by regional farmer prosperity, which is a function of irrigation status, soil type, landholding pattern, cropping pattern and farm income. Support from state governments towards promoting mechanisation has also been a differentiator.

The predominant farm machineries in the country are tractors, threshers, combine harvesters, rotavators, power tillers, and multi-crop planters.

The global agriculture equipment market size was valued at US$ 169.18 billion in 2022. The market is projected to grow to US$ 296.61 billion by 2030.


  1. Sectoral Paper on Farm Mechanization, NABARD;
  2. Farm mechanisation: Ensuring a sustainable rise in farm productivity and income, FICCI;
  3. https://www.fortunebusinessinsights.com/agriculture-equipment-market-102665;
  4. FAO.

Rise in Institutional Credit to Agriculture and Allied Sectors

Apart from the supply of quality agri inputs, infusion of capital plays an important role in the overall performance of the agricultural sector. Lack of easy and timely access to credit facilities (without any collaterals) is one of the critical challenges in formalised agri financing. In the informal credit system, it has been observed that farm input distributors usually charge higher interest rates than lenders.

In India, the institutional credit to the agricultural sector plays a crucial role in supporting the farming community and promoting agricultural development.

Government/Reserve Bank of India (RBI) has taken several measures to increase institutional credit flow and bringing more and more farmers including small and marginal farmers within the fold of institutional credit. Following are the key highlights of the institutional credit to Agri sector in the country:

  • National Bank for Agriculture and Rural Development (NABARD): NABARD is the apex development bank in India focused on agriculture and rural development. It plays a vital role in channelizing institutional credit to the agricultural sector through various financial institutions.
  • Regional Rural Banks (RRBs): RRBs are financial institutions established with the aim of providing banking and financial services to rural areas. These banks offer credit facilities to farmers for crop production, farm mechanization, allied activities.
  • Commercial Banks: Commercial banks, both public and private, play a significant role in providing credit to the agricultural sector. They offer various types of loans, including crop loans, term loans for agricultural activities, and loans for agribusiness.
  • Kisan Credit Card (KCC): Ensuring hassle-free credit availability at a cheaper rate to farmers has been the top priority of the Government of India. Accordingly, the Kisan Credit Card Scheme (KCC) was introduced in 1998 for farmers to empower them to purchase agricultural products and services on credit at any time. As of 30 December, 2022, banks issued Kisan Credit Cards (KCC) to 3.89 crore eligible farmers with a KCC limit of ₹4,51,672 crore. With the Government of India extending the KCC facility to fisheries and animal husbandry farmers in 2018-19, the number of such cards in the fisheries and animal husbandry sector has also grown. As of 17 October 2022, 1.0 lakh KCCs have been sanctioned for the fisheries sector and 9.5 lakh (as of 4 November 2022) for the animal husbandry sector.
  • Agricultural Co-operative Credit Societies: These societies are formed at the grassroots level to provide credit facilities to farmers. They function on the principle of cooperation and serve as a vital source of credit for small and marginal farmers.

The Indian government has introduced various schemes to enhance credit availability in the agricultural sector. Some prominent schemes include the Agricultural Credit Guarantee Scheme (ACGS), Interest Subvention Scheme, and Prime Minister’s Employment Generation Programme (PMEGP), among others.

These initiatives aim to ensure that farmers have access to affordable credit, which is essential for increasing agricultural productivity, adopting modern farming practices, purchasing inputs, and addressing financial emergencies.

There has been a consistent increase in the agriculture credit flow over the years, exceeding the target every year for the past several years. In 2021-22, it was about 13 per cent more than the target of ₹16.5 lakh crore. The target for the flow of credit to agriculture for 2022-23 has been fixed at ₹18.5 lakh crore.

Continued Increase in Institutional Credit to Agriculture Sector
(Rs. Lakh Crore)

Source: Based on data from DAFW and Agricultural Statistics at a Glance, 2021

Overall, institutional credit plays a significant role in supporting the agricultural sector in India by providing financial resources to farmers, enabling them to invest in their agricultural activities and improve their livelihoods.

Agriculture plays a vital role in India’s export basket and contributes significantly to the country’s economy. Agriculture brings diversification to India’s export basket. It offers a range of products, including cereals, spices, tea, coffee, fruits, vegetables, dairy products, meat, and processed foods. This diversification helps reduce dependency on a limited number of export sectors and provides a buffer against fluctuations in global demand and commodity prices.

India is a significant player in the global agricultural export market. The country exports a wide range of agricultural products to various countries around the world. The country’s diverse agro-climatic conditions and rich agricultural heritage contribute to a wide variety of agricultural products being exported, making India a prominent player in the global agricultural trade.

India’s exports have touched new heights in 2022-23 registering 14% growth to reach an all-time high of US$ 770 Billion as against US$ 676 billion in 2021-22.

The Government has set an ambitious export target of US$ 2 trillion by 2030. The country is striving to become a US$ 30 trillion economy by 2047 with 25% share in global exports.

Agri exports represent a growing share of the merchandise exports from India. In 2021-22, for the first time their share reached more than 11% of total merchandise exports.

During the financial year 2021-22, India’s agricultural export touched the highest ever level of USD 50.21 billion. “Rise in agricultural exports improves realisations for farmers and has a positive impact on their income,” the statement read.

Value of agricultural exports from India in financial year 2016-2022(in Billion US$)


According to the Economic Survey 2022-23, with its solid forward linkages, the agriculture and allied activities sector significantly contributed to the country’s overall growth and development by ensuring food security. The Indian agriculture sector has been growing at an average annual growth rate of 4.6 per cent during the last six years.

The importance of agriculture in India’s export basket goes beyond economic factors. It has social and cultural significance, as agriculture is deeply intertwined with the country’s heritage and rural traditions. By promoting agricultural exports, India can leverage its agricultural strengths, contribute to rural development, and enhance its global economic presence.


  1. Agri exports show 6.04% rise during Apr 22 – Jan 23 over the corresponding period of the previous FY, Ministry of Commerce & Industry, Press Information Bureau, March 29, 2023
  2. Economic Survey 2022-23, Ministry of Finance, GoI