Tech to drive $30-35 bn in e-sales, farm inputs by 2025: Report

With an increasing investors' interest for the agri-tech and agri-ecosystem sectors, a report has estimated that over $30-35 billion of the value pool will be created across agri value chain by 2025

With an increasing investors' interest for the agri-tech and agri-ecosystem sectors, a report has estimated that over USD 30-35 billion of the value pool will be created across agricultural value chain by 2025.

The Indian agricultural sector is at the cusp of a disruption based on technology, regulation, investment and stakeholder, and estimates indicate that approximately USD 30-35 billion of the value pool will be created in agri-logistics, offtake and agri-input delivery by 2025, according to global consultancy Bain & Company's "Indian Agriculture: Ripe for Disruption" report.

"We are at a key moment when we can leapfrog from the traditional methods to a new, technology-friendly way of growing, processing and selling food. The traditional form of agriculture will be disrupted and overhauled over time, and USD 30-35 billion value will be created in new value pools across the agricultural value chain, over the next few years," Bain & Company, India, partner and leader of the Advanced Manufacturing & Services, Energy & Natural Resources Prashant Sarin said.

The report further highlighted that the three Bills passed in September 2020, by Parliament on agriculture-focused reforms, are intended to encourage investment in direct farmer purchase by corporate, free movement of food items from production to consumption centre and private investment in storage.

The APMC reforms will enable corporate to buy directly from the farmer while the ECA reforms incentivise investment in storage and transportation infrastructure, resulting in supply chain efficiencies, according to the report.

Firms can save 5 per cent to 10 per cent or more on procurement costs of food items through a concerted national strategy, it said.

The report stated that between 2017 and 2020, India received about USD 1 billion in agritech funding.

Based on the discernable changes in the sector, investments in agritech over the next four to five years are poised to increase significantly.

"Companies need to be ready to address the challenges in this journey of change while exploiting the opportunity it represents over the coming years. We will see significant value being created in the sector, and this is the best time for companies to invest and build their digital capabilities to exploit the opportunities that lie ahead, Bain & Company, India associate partner and member of the Energy & Natural Resources and Advanced Manufacturing & Services practices Shalabh Singawne noted.

The report is based on in-depth conversations with different stakeholders including farmers, industry experts in agriculture, agri-tech start-ups. The projected market and financial information, analyses, and conclusions are based on external information and Bain & Company's judgment.