Opportunity Hotspot in India: The Great Agriculture Sector

The food and agri-business in India are ripe for such innovation in product development, technology integration and process excellence

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Food and agri-business in India have been among the best performing sectors with respect to value creation and returns generated. The government has implemented several policies to boost business. The impact is visible in the significant improvement in India's ranking on "Ease of Doing Business". Many initiatives specific to food and agri-business are being implemented across the continuum from mega food park schemes to R&D and skill development.


The growth in the F&B sector is also creating attractive investment opportunities in allied sectors and agribusiness industry such as Warehousing & cold chain | Food packaging | Food ingredients | Contract farming Bio-fertilizers & bio-pesticides | Seeds.

Opportunities In Agri-Business And Allied Sectors

Warehousing And Cold Chain

The annual loss in all agri-produce in India is approximately $13.7 billion owing to gaps across components of the cold-chain. The percentage gap from the required capacity for pack houses is 99.6per cent, ripening chambers is 91per cent, reefer vehicles are 85per cent and cold storage is 10per cent. These gaps are expected to drive an opportunity of $6.5 billion in areas including modernization of existing storage infrastructure, building an integrated cold-chain and creation of energy efficient storage technology.

Food Packaging

Food packaging market in India is $15 billion, expected to grow at a CAGR of 11per cent till 2020 to reach $20 billion. A significant impetus to this sector is expected to come from:

1. Growth in convenience foods enabled by busier lifestyles and higher disposable incomes

2. Growth in packaged fruit juices and dairy products markets

3. Growth in hyperlocal food delivery leading to growth in food takeaways

There are attractive opportunities in the creation of packaging for RTE foods to increase shelf life and light and cost-effective packaging options for food delivery.

Food Ingredients

The market for food ingredients in India is $ 764 million of which nearly 50per cent is from food flavours and the remaining 50per cent from food emulsifiers, stabilizers, sweeteners, food enhancers and food preservatives. Key drivers for growth in this market are rising urbanization, changing customer needs, development of mega food parks, high growth in demand for processed foods, RTE and RTC products. There will be an opportunity in R&D to create innovative and quality flavours and natural food ingredients.


Contract farming;

Recent government policies, such as the Model Contract Farming Act, aim to promote contract farming in the agriculture sector. Opportunities in contract farming include:

  1. Poultry contract farming, with expected growth in meat consumption

  2. Services for contract farming community such as easier access to agri-inputs, technology, credit

Fertilizers and Pesticides

Production of biofertilizers in India more than tripled between FY09 and FY15. The bio-pesticides market is expected to grow at a CAGR of 19per cent till FY20 to reach $362.1 million by FY20. Key growth drivers are:

  • Government's support to promote bio-agriculture

  • Rising demand for chemical free products for crop protection and yield enhancement due to increased consumer awareness

  • The growing demand for organic food as a result of increased health consciousness among consumers


The seed markets for food crops in India was $2.48 billion in 2016 and grew at a CAGR of 16per cent between 2010-16. Rice, vegetables, maize, pulses and wheat seeds make up approximately 50per cent-60per cent of the overall seeds market by value. With food consumption in India set to grow, there is a clear need for increasing food productivity. One of the ways to improve productivity is through the use of hybrid seeds. There is an opportunity to increase the hybridization level across many products to help boost productivity.

Opportunities In Food Services: Hotels, Restaurant And Catering

The overall hotels & restaurants market in India was $45 billion in 2016. The organized segment is expected to grow fast and contribute to approximately 43per cent of the overall hotels & restaurants market in India by 2021. This corresponds to a CAGR of 15per cent for standalone restaurants and 20per cent for chains during the same period. Across different restaurant categories, the share of chains was highest in QSRs (Quick Service Restaurants) at 45per cent followed by dessert counters at 40per cent. In all categories, the share of chains was above 10per cent indicating that there is an opportunity to set up chains across various formats.

With a good projected GDP outlook, there is also opportunity in the organized food catering and services business. Institutional catering in India is approximately $6.3 billion. Small caterers hold more than 60per cent of the market. MNCs and large caterers hold 20per cent of the market each and both segments are growing fast.

The food and agri-business in India are ripe for such innovation in product development, technology integration and process excellence. Half of India's land is arable as compared to a global average of a tenth. A huge agricultural base coupled with one of the world's largest population of employable human capital, makes India, the sixth largest economy in the world, an investors' haven.