Agro-based Industries in India: Where Farming meets Excellence

Table of Contents

• What are Agro-based Industries?
• Types of Agro-based Industries
  • Agro-produce Processing Units
  • Agro-produce Manufacturing Units
  • Agro-inputs Manufacturing Units
  • Agro Service Centres
• Major Agro-based Industries in India
  • Textile Industry
  • Food Processing Industry
  • Dairy Industry
  • Agri-input Industry
• Top 10 Agriculture Companies in India
• Challenges in Agro-based Industry
• Schemes for Agro-based Industry

What are Agro-based Industries?

Agro-based industries are the industries that use agricultural products as their 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 agricultural product manufactured is directly sold to the consumers. These industries are important for the several reasons:

• Upliftment of rural economy.
• Generate income and improves 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 product.
• Prevent migration of people from rural to urban areas.
• Avoid wastage of perishable agricultural products.

Types of Agro-based Industries

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

Agro-produce Processing Units

Agro-produce processing industries processes raw materials which can be stored for later use and can be 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-inputs manufacturing units improves the agricultural productivity of the manufactured products.

Agro Service Centres

These are the service centres or workshops which repairs and maintain the agricultural implements and farm related equipment.

As we discussed above all the four types of Agro-based industries, it’s time to have a look at some common examples of each given below.

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 of the economy to the nation in GDP growth and foreign exchange. It provides for around 4 percent of the GDP of the country. This industry is self-reliant and generates everything from raw material 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, while Tea and Coffee production are also holding the significant place as coffee leads 70% of overall manufacturing towards the global market, making it the third-largest coffee producer in Asia and 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 is one of the major contributors as it leads to almost 4% of the Indian economy. India is the largest producer of milk with production of around 146 million metric 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 of India. These are the external resources used to promote the overall crop and livestock production. The use of machineries, tractors, fertilizer and pesticides, seed processing inputs all are essential part of the agricultural practices. India’s agriculture contributes around 20% to the nation’s economy. However, many challenges are always there like 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 dollars valuation, driven by over 5 lakh Agri-input retailers serving as vital sources for farmers.

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.

Challenges in Agro-based Industry

• 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 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 and helps to support creation of global food manufacturing champions corresponding with India’s natural resource endowment and support Indian brands of food products in the international market.