Agriculture is viewed as the symbol of the first stage of development, and a country’s progress is indicated by its degree of industrialization. Interdependence between agriculture and industries has grown in the recent decade due to the modernization of agriculture. Agro-based industries use the raw material derived from agricultural produce, such as tea and sugar, as input to produce the final output. Agro-based industries play an important role in bridging the gap between agriculture and the broader economy. Let’s delve into the blog to know more about the major agro-based industries in India.
Agro-based industries use agricultural products as their raw materials for manufacturing products like biofuels, food, textiles, and other value-added goods. The processing of raw agricultural produce increases its economic value, which benefits both farmers and the industry. 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 products manufactured are directly sold to consumers.
Agro-based industries are directly or indirectly linked to agriculture. These industries not only add value to the agriculture products but also generate significant employment opportunities and ensure the overall development of rural areas in India. In this sense, they are the critical bridge between the broader economy and the agriculture sector.
In 2021, the former Vice President, M Venkaiah Naidu, promoted agro-based industries as a tool to create employment opportunities in rural areas. Besides, it has an important role in the sustainable development of India. Let us see some of the critical roles of these industries.
Mainly, there are four types of Agro-based industries. Let’s understand each in more detail.
The textile industry is one of the major contributors to the GDP growth and foreign exchange. India is the 3rd largest exporter of textiles and apparel worldwide. This industry is self-reliant and generates everything from raw materials to the final goods for its own customers. The textiles and apparel industry has a contribution of 12% to exports, 13% to industrial production, and 2.3% to the country’s GDP.
The raw materials used by the textile industry are cotton, silk, jute, and sometimes artificial fibre. 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 textile-producing states in India.
The cotton industry is the source of livelihood for around 60 million individuals in India. Being the leading producer of cotton, India accounts for 23% of global cotton production. In FY25 (until December 2024), the cotton exports were valued at Rs. 73,233 crores.
India accounts for around 75% of the global production of jute goods. The major products of the jute industry are food-grade jute cloth, shopping bags, decorative fabrics, blankets, hessian or burlap, etc. The major jute-producing states are Assam, West Bengal, Orissa, and Bihar.
The 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 food-processing industries in India.
The sugar industry is the second-largest agro-based industry of India, impacting the livelihood of more than 5 crore people. India is the largest producer and consumer of sugar in the world. The share of the sugar industry in the GDP is around 1-1.15%.
The tea and coffee industries are also important for the national economy. Indian tea is renowned worldwide, and almost 80% of the tea produced is consumed by the domestic population. The total tea exported by India in FY24 was 250.73 million kg, worth over Rs. 6,000 crores. The total tea production was around 1382 million kg. During FY24, India became the 7th-largest coffee-growing country in the world. The exports were valued at around Rs. 11,012 crores. India mainly produces Robusta and Arabica coffee. Karnataka, Kerala, and Tamil Nadu are leading producers of coffee in India.
The contribution of India to the global oilseed production is 5-6%. In the financial year 2023-24, the total export of oilseeds, minor oils, and oil meals was around 5.44 million tons worth Rs. 29,587 crores. The domestic consumption is so high in India that it is the net importer of edible oils. Overall, the states of Maharashtra, Rajasthan, Maharashtra, and Gujarat are the leading contributors to this sector.
Dairy industry in India contributes almost 4% to India’s GDP. India is the largest producer of milk, with production of around 239 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, and the finished products are paneer, curd, cheese, butter, etc.
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 machinery, tractors, fertilizer and pesticides, and seed processing inputs all are essential part of the agricultural practices. 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.
Agro-based industries are the industries that use agricultural produce as their raw materials for manufacturing final products.
Textile industry (cotton, jute), food processing (sugar, tea, coffee, vegetable oil), dairy industry, and leather goods industry are some examples of Agro-based industries in India.
There are four types of Agro-based industries in India, namely Agro-produce Processing Units, Agro-produce Manufacturing Units, Agro-inputs Manufacturing Units, and Agro Service Centres.
The textile industry holds the top place among the Agro-based industries in India.
SAMARTH, Pradhan Mantri Kisan SAMPADA yojana, and PLISFPI are some government schemes to promote the Agro-based industries in India.