India’s agriculture sector is undergoing a major transformation fueled by innovation, technology, and policy support, reveals a recent report jointly published by 1Lattice and IVCA. Valued at Rs 30 lakh crore, Indian agri sector spans ground agriculture, livestock, and fisheries, with strong growth across all segments. Agri-tech is playing a key role, especially in precision farming, supply chains, and storage. Key growth drivers include AI, IoT, improved logistics, and rising agri-tech investments. Investments are rising rapidly, especially in ground agriculture and upstream services.
Government initiatives like IDEA and Agri Stack are enhancing farmer access to digital tools and markets. Despite strong growth, the sector faces certain challenges including fragmented landholdings, low yields, soil degradation, water stress, and climate change. However, with continued innovation and investment, India’s agri-sector is poised for sustainable and inclusive growth.
India’s agriculture sector is undergoing a significant transformation, driven by innovation, technology integration, and proactive policy measures. A recent report titled ‘Innovations in Agriculture’, jointly released by 1Lattice and the Indian Venture & Alternate Capital Association (IVCA) at Startup Mahakumbh 2025, offers a detailed analysis of the evolving market landscape, investment trends, and the critical role of government support in building a sustainable and resilient agri-ecosystem.
India’s agri-market is growing
The Indian agriculture market is currently experiencing steady growth. Currently valued at approximately Rs 30 lakh crore, the Indian agriculture market includes ground agriculture, livestock, and fisheries. Ground agriculture makes up the largest share at 60%, followed by livestock at 30% and fisheries at 10%. From FY19 to FY24, India’s agriculture sector has shown steady progress across its key segments:
- The ground agriculture market has expanded to Rs 18 lakh crore, growing at a 4% CAGR, with cereals (25%) and fruits & vegetables (25%) serving as the primary growth drivers.
- The livestock market has reached Rs 9 lakh crore, registering a 5% CAGR, largely propelled by milk (70%) and meat (25%)
- The fishing and aquaculture market has grown to approximately Rs 2 lakh crore, with a 7% CAGR, led by the dominance of inland fish, which accounts for 55% of the segment.
The report projects the total market to expand from Rs 31 lakh crore in FY25 to Rs 38 lakh crore by FY30, fueled by shifting consumer preferences, innovative farming practices, and technological advancements.
Abhishek Maiti, director of Agri & Industrials at 1Lattice, said, “India’s agriculture sector is witnessing a paradigm shift where innovation is not just an enabler but a growth catalyst. With agritech startups, policymakers, and investors aligning toward a common goal, the sector is poised for unprecedented growth.”
Catalysts powering the transformation of Indian agri sector
Among the key developments reshaping the Indian sector are the use of AI, machine learning (ML), and Internet of Things (IoT) for precision farming. These technologies are boosting crop productivity and improving resource efficiency.
The report also spotlights the rise of technology-led supply chains and integrated logistics, which are addressing persistent issues such as product loss and limited traceability. Furthermore, advancements in storage and warehousing, coupled with AI-based quality checks, are extending the shelf life of produce and ensuring fair pricing and consistent food quality.
On the investment front, the agri-tech space has seen robust growth, with private equity and venture capital investments increasing at a compound annual growth rate (CAGR) of 40% between CY2019 and CY2022. The peak year was CY2021, which witnessed investments totaling US$ 1,080 million.
The Agri-tech investments in India are predominantly directed towards ground agriculture, accounting for approximately 80% of total funding. Additionally, around 50% of investments are focused on companies operating in the upstream segment of the agricultural value chain.
Key players attracting significant investment in the agri-tech space include Ninjacart, Licious, WayCool, Country Delight, FreshToHome, and Captain Fresh.
Looking ahead, investments in the Indian agriculture sector are projected to grow at a CAGR of around 6%, supported by India’s inherent competitive advantages, improving market infrastructure, and a growing emphasis on impact-driven investing.
Government initiatives are further accelerating this transformation. Programs like the Indian Digital Ecosystem of Agriculture (IDEA) and the Agri Stack are creating digital infrastructure to empower farmers with better access to inputs, financial services, and market opportunities. These initiatives aim to strengthen the agricultural value chain and support long-term sectoral growth.
Key challenges in Indian agri sector
India’s agricultural sector is currently facing a range of complex challenges that are limiting its potential for growth, sustainability, and global competitiveness. Some major challenges, as per the report, affecting India’s agricultural sector are:
- Fragmented Landholdings: Nearly 95% of Indian farmers are small, marginal, or semi-medium, managing about 70% of the country’s farmland. In contrast, in major agricultural economies like the USA and Brazil, small farms (less than 10 hectares) make up less than 2% of the total farmland, making large-scale, efficient farming more feasible in those countries.
- Productivity Gaps: India’s average crop yield is approximately 9 tons per hectare, which lags behind countries like Brazil (12 tons/ha), USA (13 tons/ha), and China (17 tons/ha). Yields of key crops in these countries are often 2–3 times higher than those in India, indicating significant room for improvement.
- Soil Health Decline: The overuse of fertilizers, inefficient irrigation, lack of soil nutrients, and unsustainable agricultural practices such as shifting cultivation have led to widespread soil degradation. This contributes to soil pollution, ecosystem damage, landslides, reduced plant nutrition, and exacerbates climate change impacts.
- Depleting Groundwater Levels: Although 60–70% of India’s groundwater is still within safe extraction limits, 70–75% of groundwater reserves in major agricultural states like Punjab and Rajasthan are overexploited, raising serious concerns about water sustainability.
- Unscientific Sowing Practices: Farmers’ decisions on crop planting are often driven by tradition, sentiment, superstition, and limited access to scientific knowledge or technology. Government schemes can further skew planting patterns, resulting in issues such as soil exhaustion, reduced biodiversity, inefficient resource use, and increased pollution.
- Climate Change Pressures: Climate change poses a growing risk to Indian agriculture. Studies estimate that crop yields could decline by 11–26% by 2100 due to extreme weather events, shifting rainfall patterns, declining herbicide effectiveness, and broader land-climate interactions.
- Low Processing Levels & Rising Labor Costs: India still has a low rate of post-harvest processing, which reduces the value generated from agricultural produce. At the same time, increasing labor costs are putting additional pressure on farmers’ margins and overall profitability.
India’s agriculture sector is undergoing a major transformation, blending tradition with technology. This shift is driven by innovation, and supportive policies. With growing private investment in agri-tech, the sector is poised for sustainable growth. The report captures this progress and outlines a roadmap for future potential in Indian agriculture.
