‘Indian agritech sector to address $34 billion market by 2027’

Each food crop is a multi-billion value chain, as per the report

December 14, 2022 07:33 pm | Updated 08:47 pm IST - Mumbai

Image for representation purpose only.

Image for representation purpose only. | Photo Credit: Pixabay

Indian agritech is expected to lead the next decade’s technology-first value creation opportunity, growing at a CAGR of 50% over the next five years, and addressing a $34 billion market by 2027, Avendus Capital said in a report. 

It is expected to replicate the success of other tech sectors, creating unicorns in the next couple of years, according to the report.

“Agriculture which contributes $530 billion to India’s GDP, sees less than 1% tech penetration,” said Pankaj Naik, executive director and co-head, Digital and Technology Investment Banking, Avendus Capital.

“Tech disruption in this sector has the potential to positively impact over 40 million farmers, doubling their incomes,” he said. “While there are large global outcomes in the sector, we believe that Indian agritech will be a Bharat-first story, given the interesting India-first outcomes disrupting the sector,” he added.

“Such unique innovations in production, supply- chain/market linkage, quality assessment and digital traceability have the potential to become from India-to-the-world solutions,” Mr. Naik said.

According to Bandish Shah, vice president, Digital and Technology Investment Banking, Avendus Capital and the chief author of the report, “The agritech sector has seen a breakout 10 times growth over the last 3 years, driven by four key factors – increasing digital penetration across India, COVID-led supply chain disruption, growing consumer interest for quality produce and increasing PE/VC interest.”

“In fact, 63% of the total liquidity has been injected into the sector over the last two years alone. Going forward, we expect to see higher deal activity led by growth funds followed by IPOs in the latter half of the decade,” he added. 

Each food crop is a multi-billion value chain, as per the report. Agritech firms have adopted a phased approach, starting with a few crops, perfecting the business model, establishing trust among stakeholders and then scaling to multi crops. 

While digitising and optimising the supply chain is the largest opportunity for the sector, Agritech firms are adding value across the farming value chain. A few of them are building businesses by using warehousing, financing, quality testing services as a hook for farmer engagement, as per the report.

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