India’s $580 billion to $650 billion agriculture sector1 is at a strategic juncture. A combination of external tailwinds and internal momentum—driven by factors ranging from structural reforms to digital and technological innovation—has propelled India to emerge as one of the world’s largest and fastest-growing agricultural economies.
As agricultural supply chains become increasingly interconnected, India’s scale as an agricultural producer and exporter positions it as a critical player in the shifting global agricultural landscape. India’s agriculture sector is host to multiple structural advantages vis-à-vis other agriculture economies that, if leveraged to their full potential, could accelerate growth of the sector to $1.4 trillion by 2035 and $3.1 trillion by 2047. This positioning in the evolving landscape presents an opportunity for agribusinesses to capture value, shape markets, and drive transformative growth.
To join in, agribusinesses first need to understand what’s driving growth in Indian agriculture. In Value creation in Indian agriculture, we analyze India’s agricultural economy to understand current trends, the country’s structural advantages, standout agribusiness segments across the value chain, and key opportunities for new entrants and incumbents alike.
Growth and structural advantages in Indian agriculture
In the past six years, India’s agricultural sector has grown 5 percent per annum on the back of structural reforms, government investments, and increased formalization, enabled by wider availability of credit (exhibit).2 Our analysis shows potential to aim higher and set an aspiration of an additional one to two percentage points growth, which would require India to achieve greater momentum across on-farm and off-farm productivity and price markers. These markers include improving crop yields by an estimated incremental 15 to 40 percent (by using better inputs such as high-yielding variety [HYV] seeds, specialty fertilizers, biologicals, and improved farming practices), expanding downstream processing for greater value-addition potential (for example, by leveraging feedstock access to unlock production for higher-value biochemicals), and increasing agricultural exports (in line with government targets for a twofold increase by 2030).
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A waterfall bar chart shows growth projections for India’s agricultural economy in billions of dollars from fiscal year 2024 to fiscal year 2047. In the near term, India’s agricultural sector could grow from $580 billion to $650 billion in 2024 to $1 trillion in the base case to $1.4 trillion in the aggressive case by 2035. In the long term, it could grow to $1.8 trillion in the base case to $3.1 trillion in the aggressive case by 2047. Overall, India’s agricultural economy is expected to grow at a CAGR of 5 to 7% from 2024 to 2047.
Source: India Ministry of Finance; India Press Information Bureau; International Monetary Fund
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India’s agricultural landscape has five structural advantages that players can leverage:
- A large and growing consumer base. India’s growing middle class is expressing greater demand for high-value and processed agricultural products, such as fruits and vegetables and protein sources (for example, dairy and value-added dairy products such as paneer, curd, and butter).
- Manufacturing cost advantages. India’s cost advantages stem from a combination of structural, economic, and policy factors, including a workforce of approximately 607 million people (as of 2024)3 and competitive manufacturing costs due, in part, to labor and utility costs.
- Feedstock advantages. India is the world’s second-largest producer of rice, sugarcane, and wheat and the fifth-largest producer of maize.4 India also has the lowest cost of production for rice and maize and the second-lowest for sugar (with production costs comparable with peers for wheat).5
- Digital infrastructure. India has the world’s largest public digital payments infrastructure,6 which many agricultural fintechs are leveraging to build innovative credit models to support agri-financing, for example.
- Innovation. India is home to nearly 2,800 agtech businesses, driven by growing farmer awareness of cutting-edge solutions, expanding access to high-speed internet, and a demand for greater agricultural efficiency.7
Identifying past performers and future growth areas in India’s agriculture sector
We analyzed historical TSR to identify which market segments have outperformed and created value for shareholders in the past five years. This analysis revealed that growth has come from across the value chain, with the total agricultural TSR increasing from 9 percent (2014–19) to 16 percent (2019–24).
We broke this growth down by segment. Within upstream segments, ag-inputs such as fertilizers and machinery led the surge, increasing to 24 percent (up from 8 percent) due to structural shifts in demand and policy support. Meanwhile, raw material–sensitive upstream segments such as feed additives and livestock struggled with cost pressures. Midstream segments saw consistently high growth (increasing to 17 percent [from 14 percent] in 2014–24), driven by premiumization in plantation crops such as coffee and an increase in spice exports. Finally, downstream segments saw low-range growth, increasing from 9 percent (2014–19) to 12 percent (2019–24). This was largely due to consumer packaged goods players investing in diversifying their product portfolios, with select pockets of growth in sugar (from 9 percent up to 29 percent) and edible oils (from 5 percent up to 34 percent) during the same period.
In addition to our historical TSR perspective, we built a forward-looking perspective by analyzing expected growth in the next five to seven years as well as average EBITDA margins. Through this analysis, we identified 40 business segments across India’s agricultural value chain that posed interesting future opportunities. In total, these 40 business segments aggregate to an overall revenue pool of about $533 billion and a profit pool of $42 billion (based on 2024 estimates).
As with the TSR analysis, these segments were broken down according to their phase in the value chain. Upstream agricultural input sectors constitute $7 billion of the total profit pool, with agrichemicals, fertilizers, seeds, and agri-lending poised for growth driven by structural cost advantages, innovation, and policy support. In our analysis, we found that distribution of these agricultural inputs is expected to remain largely disorganized, although digital and omnichannel models are unlocking new value pools. In the production phase, integrated agricultural value chains (such as for livestock and plantation crops) present a $4 billion opportunity. Growth in the production phase is driven by high export growth as well as domestic opportunities fueled by cost competitiveness in production. We found that the lion’s share of revenue (about 70 percent of the total, or a $30 billion profit pool) is expected to come from the downstream trade and processing sector because of its high value-add potential. This is expected to be driven mainly by processing for fruits, vegetables, and staples, as well as by the industrial bioeconomy (with the predominant opportunity of bio building blocks).
How to capture value: Four key opportunities in Indian agriculture
Across India’s booming agricultural value chain, four areas of potential opportunity stand out based on historical TSR, forward-looking growth potential, and proximity to India’s structural advantages: bio building blocks (bio-to-X), agrichemicals, agribiologicals, and processed foods.
- Bio building blocks (bio-to-X). Owing to government initiatives, India’s bioeconomy has experienced remarkable growth, expanding from $10.0 billion in 2014 to $165.7 billion in 2024—a 16-fold increase.8 Within bio building blocks, two emerging opportunities stand out: bioethanol and bio-butanediol (BDO). To succeed in bio-based manufacturing and capture import substitution and export opportunities, players will need reliable, low-cost feedstock access, strategic plant location, and flexible, multi-feedstock setups that can adapt to market and regulatory shifts. These factors drive cost efficiency, security of supply, and long-term competitiveness.
- Agrichemicals. The domestic agrichemicals market for crop protection is valued at $4.0 billion, growing at 3 to 5 percent per annum, while the $5.5 billion export market is growing at 5 to 6 percent. In total, Indian agrichemicals are expected to see a combined scale-up to between $25 billion and $30 billion by 2047 (up from around $10 billion in 2024).9 To succeed domestically and deepen the share of wallet at the micromarket level, players can consider connecting directly with growers, tailoring credit and incentives for distributors, and offering differentiated, high-quality products to enable profitable growth. To succeed in the agrichemicals CDMO (contract development and manufacturing organization) and CMO (contract manufacturing organization) space, players would need to combine advanced chemistry expertise, robust R&D, and manufacturing excellence with customer-centric growth strategies. Success would hinge on cost-effective scale-up, regulatory compliance, and deep alignment with client needs.
- Agribiologicals. The agribiologicals market, segmented into biostimulants (including biofertilizers) and biocontrols, is expected to grow at a CAGR of about 9 to 10 percent, expanding to between $600 million and $640 million in 2030 (up from $350 million in 2024). Driving growth in biologicals requires sharp micromarket focus, farmer-led demand generation, a streamlined product portfolio, and a strong channel strategy. Success lies in targeting high-potential micromarkets with tailored pull models and disciplined brand bets.
- Processed foods. As India’s middle class grows, consumers are expected to express growing interest in processed foods. Valued today at about $330 billion, India’s agricultural processing sector is crucial in linking farm production to consumer demand, driving added value and economic growth alike.10 Processed-food players can succeed by combining capital-backed scale, deep distribution networks, and disruptive innovation with strong brand equity rooted in cultural relevance. This enables cost efficiency, market reach, and deep consumer loyalty.
Indian agriculture presents attractive opportunities across a large and complex landscape, which in turn requires potential entrants to develop differentiated capabilities to create and capture value. Across all segments, a few capabilities could be critical—in particular, captive access to feedstock, including strong sourcing capabilities; R&D and innovation capabilities, including talent management; and channel excellence, including innovative marketing and distribution approaches. Regardless of which business segment players choose to enter, they will likely need to consider how to scale operations, which is highly dependent on which parts of the value chain they focus on. With this in mind, those that leverage India’s strengths could be better positioned to take part in Indian agriculture’s growth story.
