Agriculture continues to be the single biggest contributor to India’s economy, with a share of at least 16% of the GDP. It provides employment to more than 40% of the country’s working population, the impact of which does not get factored into the GDP due to the largely cash-based transactions. Farm sector also directly and indirectly impacts several other industries such as e-commerce, consumer packaged goods and textiles, some of which are dependent on agricultural output.

In spite of the critical position it holds, agronomists have brought forth several structural challenges that impede the Indian agricultural sector’s progress towards its full potential. When compared to the US and China, the yield of crops such as cereals is lower by 50% in India. Moreover, the presence of multiple intermediaries in the value chain reduces the farmers’ income. Their access to technology, structured loans and marketplaces is also limited.

Policy reforms such as elimination of stock limits, liberalizing sale of produce across the country, and formalizing contract farming can help boost the sector. What’s also critical is the adoption of custom technologies to transform Indian agriculture by addressing the pain points that have historically it. The good news though is that India’s growing start-up ecosystem is now playing an active part in disrupting agricultural practices with their agritech interventions.

Services Offered in AgriTech Market

Agritech companies already operate in a market that will have a valuation of USD 24 billion by 2025. Some of the solutions offered to improve farm practices and product supply across the value chain include:

  • Simplification of the input market linkages through a robust physical infrastructure network
  • Enhancement of harvests through the use of precision farming
  • Digitization of crop records for better farm management and throughput
  • Establishment of quality management and traceability
  • Provision of smoother access to affordable loans and crop insurance
  • Simplification of output market linkages through enhanced efficiencies of the post-harvest supply chain

Agritech models are maturing fast

A recent report by McKinsey suggests that agritech adoption is not uniform across regions – both in terms of the percentage of farmers using it and the submarkets that are influenced. While farm-management software is the most common submarket in North America, remote-sensing tech finds high use in South America. In Europe, Germany has a 13% adoption rate for agribusiness marketplace adoption while across Asia, India leads China in the use of agritech across all submarkets.

While the business models around the agritech industry are maturing fast, there are three broad categories around which execution currently revolves. These are:

  1. Margin-based models where agritech companies build market linkages on the input or output side, earning profits through the buy-sell spread
  2. Subscription-based models that allow companies to provide a mix of software and hardware solutions to help increase crop yields, track crop quality, and monitor their journey through the value chain
  3. Transaction-based models where companies charge a fee in line with the number of transactions served such as loans or insurance policies offered by finance companies / banks

Agritech players operating in India had received a total funding of USD 1.6 billion till 2021 – the investments and the growth phase of the industry having already started in 2019.

Some of the major Indian agritech start-ups in India and their key investors are:


Solutions Offered

Funding Received by Mid – 2022

Key Investors

EM3 Agri Services

Farm mechanisation and technology services

USD 13 Million

Global Innovation Fund, Aspada


Predictive analytics to improve farm yield

USD 6 Million

Mitsui Sumitomo Insurance, Menterra Venture Advisors




IoT – SaaS provider

USD 10 Million

Flipkart Leap, 3one4 Capital


Gold Farm


Farm equipment booking

USD 3 Million

Infuse Ventures, Mahindra Rise


Way Cool


Tech-enabled supply chain

USD 222 Million

Lightrock, LGT Group

Government support is crucial

While the above indicators indicate that agritech is well set to unlock India’s farm potential, there is a continuous need of proactive involvement from both the central and state governments. One such effort that merits mention is the National Agricultural Market (eNAM) – a pan-India electronic trading application that networks with active mandis (wholesale markets) to build a unified national market for agricultural produce. It offers services like commodity arrivals and prices, buy and sell trade-offs, and the facility to respond to trade offers.

State governments are also deploying localized agritech solutions and initiating partnerships with tech companies to help farmers plan their harvest cycles more effectively. For e.g., the Bill and Melinda Gates Foundation and Tata Trusts joined hands to set up the Indian Agritech Incubation Network at IIT-Kanpur in partnership with the Uttar Pradesh government. The Punjab government started a pilot project with an Israel based company to offer technical know-how on enhancing farm output.

Near-term Growth Prospects for AgriTech

While the investment activity in the agritech sector has been strong right through the past few years, a significant part of the market potential still lies untapped. This needs to be explored to drive further growth.

There are opportunities for companies to expand horizontally, building end-to-end relationships with farmers. Hypermarkets and e-commerce players too can extend their grocery segments with backward integration into the agritech domain. The government’s latest initiative to provide level-playing fields to producers through the Open Network for Digital Commerce (ONDC) would go a long way in removing the multiple intermediaries in the farm sector value chain. The central government initiatives under ONDC and the Open Credit Enablement Network (OCEN) will open up avenues for eCommerce market access and credit availability for small businesses in the medium term. In addition, food processing enterprises can acquire or merge with agritech organizations to maintain their operations and product quality more efficiently.

From the viewpoint of the agritech start-up industry, the need of the hour is to build scalable business models with stronger unit economies to support (and not displace) the traditional value chain participants in the Indian agriculture sector. Moreover, the user costs need to be kept affordable for small and marginal farmers, who account for over 80% of India’s farming community. The Farmers’ Global Insights Survey conducted by McKinsey found that 50% of the farmers did not want to pay anything for agritech services while 47% claimed that high cost of technology was a barrier to adoption.

Over the short-term, agritech solutions must encourage farmers to focus attention on combining the two submarkets, viz., farm-management software solutions and precision-agriculture hardware solutions. These would result in a seamless move from enhancing India’s farm output and creating wealth by removing intermediaries towards the global goals of sustainable agriculture.

The agritech segment is one of the major verticals served by Practus. It may be a solution for business expansion through mergers and acquisitions, or automation of key finance processes to drive new efficiencies, we help our clients fructify their Agriculture 4.0 journeys while maximizing value from agritech investments. Connect with us at to know more about our RoI-centric services for this industry.