Promising Opportunities For Investment In Agritech

Introduction
In India's agrarian economy, agriculture accounts for around 54.6% of all employment and generates 18.8% of the nation's gross value added (at current prices). The direct dependence of several industries on agricultural output, including retail, chemicals, packaging, and e-commerce, intensifies the sector's influence on overall economic growth. Agriculture exports from India make up 12% of all merchandise exports and, as of 2021–2022, have reached US$ 50 billion. However, the growing population, the existence of middlemen, and the existence of unorganized marketplaces give stakeholders the opportunity to employ contemporary technology to increase output effectiveness and optimize returns. For a nation like India, which has the third-largest start-up ecosystem in the world, agritech is not a new concept. The use of technology in agriculture is anticipated to address a number of issues in all areas of the industry.

India needs more agritech
The main factors influencing the adoption of agritech in India include consumer preferences, urbanization, climatic factors, and water scarcity. The agriculture sector has experienced a number of pain issues, including input price instability, restricted access to technology for efficient cropping, lack of large-scale testing, supply chain technology, output market linkage, and inability to secure financing at the appropriate moment.

Overview of Indian Agritech Funding
The majority of contemporary technologies, including Artificial Intelligence (AI), Machine Learning (ML), and the internet of things, are used by India's over 1,300 Internet of Things (IoT). According to a report by Bain & Company, India is also the third-largest recipient of agritech funding globally.

Funding for Indian agritech (in US dollars)
Up until 2021, India would have received US$ 1.6 billion in funding for agritech start-ups; the investment and growth phase began in 2019. Agritech funding was valued at US$ 245.2 million in 2019 and will reach US$ 889 million by 2021 at a CAGR of 90%. Out of the US$ 1.6 billion funding, approximately US$ 305 million was allocated to the market linkage component, which includes the creation of an online marketplace for agricultural inputs. According to money received, Bengaluru, Chennai, and Pune are the top three start-up clusters.

India's Top Agritech Startups
Indian agritech start-ups have developed innovative technology to tackle pressing problems facing the agriculture sector. Predictive analytics, soil and crop monitoring, improved crop cycle, and pest control make up the majority of these technologies. The primary goal of agritech businesses is to increase farm output. The agritech industry appears to have profited from the epidemic since investment in the sector has surged by roughly six times since 2018.

Governmental Programs
The nation's agritech industry is actively promoted by both the federal government and the states. The main initiative that has facilitated the rural economy's global connectivity is the Digital India programme. To increase farm revenue in the nation, the government has initiated a number of initiatives and reform measures, including:

National Agriculture Market (eNAM):
This is a national market for agricultural commodities that is connected to existing mandis through a pan-Indian electronic trading platform. The website offers services including commodity arrivals and pricing, the ability to respond to trade offers, and buy and sell trade-offs. More than 1.72 billion farmers and 2 lakh traders have enrolled on the e-NAM platform as of December 31, 2021. Moreover, the e-NAM platform has been integrated with 1,000 mandis from 18 states and three union territories.

India Digital Ecosystem of Agriculture (IDEA):
The Department of Agriculture & Farmers Welfare's agristack system will assist the government in rolling out initiatives that will benefit the industry and raise farmer income.

National Mission for Sustainable Agriculture (NMSA): 
The goal of this government effort is to increase agricultural output by using sustainable technologies throughout the value chain. Farmers will receive information from the programme on crop management and weather forecasting.

National e-Governance Plan in Agriculture (NeGP-A):
In accordance with this plan, money is made available to states and union territories for initiatives using cutting-edge technologies like blockchain, AI, and machine learning.

Promising Opportunities for Investments in Agritech
Agritech start-ups have expanded gradually in India, with the overall number of start-ups rising from 43 in 2013 to more than 1,300 as of April 2022. Agritech funding has also increased, going from US$ 1.1 million in 2014 to US$ 889 million in 2021. An EY analysis projects that the Indian agritech market will have a potential value of about US$24 billion by 2025. Indian agritech startups are appealing to international venture capital and private equity investors, and funding has increased significantly despite the pandemic. Agritech companies have been essential in helping farmers during the pandemic.