Agro-based Industries in India: Where Farming meets Excellence

Table of Contents

• What are Agro-based Industries?
• What are the Types of Agro-based Industries in India?

• • Agro-produce Processing Units
  • Agro-produce Manufacturing Units
  • Agro-inputs Manufacturing Units
  • Agro Service Centres 

• What are the Popular Agro-based Industry Examples in India?
• Which are the Major Agro-based Industries in India?

• • Textile Industry
  • Food Processing Industry
  • Dairy Industry
  • Agri-input Industry

• What are the Top 10 Agriculture Companies in India?
• What are the major Challenges in Agro-based Industries in India?
• Schemes for Agro-based Industry

What are Agro-based Industries?

Agro-based industries are industries that use agricultural products as raw materials for manufacturing. These industries are part of the agriculture sector, which collectively contributes around 18% to India's GDP. They are mostly consumer-based industries as the agro-based products manufactured are directly sold to consumers. These industries are important for several reasons:

• Upliftment of rural economy.
• Generate income and improve the financial condition of rural people.
• Solve the problem of exploitation of farmers by middlemen.
• Increase agricultural production to bring more and more areas under various crops.
• Reduce transportation cost of agricultural products.
• Prevent migration of people from rural to urban areas.
• Avoid wastage of perishable agricultural products.

What are the Types of Agro-based Industries in India?

There are mainly four types of Agro-based industries. Let's understand each of them in detail.

Agro-produce Processing Units

Agro-produce processing industries process raw materials that can be stored for later use and transported at cheaper costs. There is no need to manufacture any new product in these types of industries.

Agro-produce Manufacturing Units

These type of industries manufactures new products. The finished products are entirely different from the original raw material.

Agro-inputs Manufacturing Units

The Agro-input manufacturing units improve the agricultural productivity of the manufactured products.

Agro Service Centres

These are the service centres or workshops that repair and maintain agricultural implements and farm-related equipment.

What are the Popular Agro-based Industry Examples in India?

As we have discussed above all the four types of Agro-based industries, it's time to have a look at some common agro-based industry examples listed below:

Which are the Major Agro-based Industries in India?

Now, as we are aware of almost all the types of Agro-based industries, let's talk about some major Agro-based industries found in India.

Textile Industry

Textile industry is one of the major contributors to the India’s GDP growth and foreign exchange reserve. It contributes around 4 percent to the country's total GDP. This industry is self-reliant and generates everything from raw materials to the final goods for their own customers. The raw materials are cotton, silk, jute and sometimes artificial fibre, and the final products are clothes, household items, etc. The textile industry involves spinning, weaving, processing, and apparel manufacturing. Maharashtra and Gujarat are the top cotton textiles producing states in India.

Food Processing Industry

Indian Food processing industry is one of the biggest food processing industries in the world. Sugar, tea, coffee, and oil are some of the major foods producing industries in India. Sugar industry contributes to 17% of the total production in the world. Tea and Coffee production also holds a significant place. Coffee leads 70% of overall manufacturing towards the global market, making it the third-largest coffee producer in Asia. Tea contributes to an overall 23% of the total production in the world. The vegetable oil business produces around 5% of the world's vegetable oil. Madhya Pradesh is the largest state in oilseed processing. Overall, the states of Maharashtra, Uttar Pradesh, Andhra Pradesh, Tamil Nadu, and Gujarat are the leading contributors to this sector.

Dairy Industry

Dairy industry in India is one of the major contributors to the India’s GDP and is the largest sub-sector of Indian agriculture. It almost contributes 5% to the Indian economy. India is the largest producer of milk in the world, with a production of around 239.3 million tonnes. The Indian dairy market is amongst the largest and fastest-growing markets in the world. Uttar Pradesh is the highest milk-producing state in India, followed by Rajasthan, Madhya Pradesh, and Gujarat. In this business, the raw material is milk, but the finished products are paneer, curd, cheese, butter, etc.

Agri-input Industry

The agriculture input industry is another important agro-based industry in India. These are the external resources used to promote the overall crop and livestock production. The use of machineries, tractors, fertilizer and pesticides, and seed processing inputs are all essential parts of the agricultural practices. India's agriculture contributes around 20% to the nation's economy.

However, many challenges are there, such as lack of agricultural equipment, crop vulnerabilities and financial constraints, which hinder the development. But now, India's Agri-inputs market alone boasts a significant 44-billion-dollar valuation, driven by over 5 lakh Agri-input retailers serving as vital sources for farmers.

What are the Top 10 Agriculture Companies in India?

1. Amul
2. ITC Agribusiness Division
3. Shree Renuka Sugars Ltd.
4. Godrej Agrovet Ltd.
5. Jain Irrigation Systems
6. UPL Ltd.
7. Rallis India Ltd.
8. Mahindra Agribusiness
9. Arvind Ltd.
10. Suguna Foods Pvt Ltd.

What are the major challenges in Agro-based Industries in India?

• Risk-taking factors
• Changes in cropping pattern
• Improper guidance to entrepreneurs
• Financial constraints
• Crop vulnerability
• Seasonal changes
• Uncertainty about future market demands
• Lack of the supply of same variety of fruits and vegetables in bulk
• Absence of information about the quality and quantity of the market

Schemes for Agro-based Industry

Below are several schemes or initiatives taken by the Government of India to boost the growth of Agro-based industries:

• Scheme for Capacity Building in Textile Sector (SAMARTH)- This is a flagship scheme by the Ministry of Textile, Govt. of India, to provide skills and training to the people in creating jobs and to provide livelihood to all sections of the society across the country.
• Production Linked Incentive (PLI) Scheme - The PLI Scheme is intended to promote the production of MMF Apparel & Fabrics and Technical Textiles products in the country. Its aim is to create job opportunities for the people of India.
• Pradhan Mantri Kisan SAMPADA Yojana (PMKSY)- The objective of PMKSY is to supplement agriculture, modernize processing and decrease Agri-Waste.
• Production Linked Incentive Scheme for Food Processing Industry (PLISFPI)- This is a central scheme that helps support the creation of global food manufacturing champions corresponding with India's natural resource endowment and supporting Indian brands of food products in the international market.