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Govt Mulling Setting Up Fund For Agritech Startups: Piyush Goyal

Govt Mulling Setting Up Fund For Agritech Startups: Piyush Goyal

It is these startups that will fuel India's Aatmanirbhar drive: Goyal

Earlier in her Budget speech, FM had proposed setting up a blended capital fund under co-investment model to finance agritech startups.

India has over 1,000 agritech startups. Last year, Indian agritech startups raised close to $684 Mn across 47 deals.

In a bid to modernise the ailing agricultural sector, the Centre is mulling creating a fund specifically for agritech startups.

The announcement was made by Union Minister Piyush Goyal at a virtual event on Monday.

Goyal said, “Technology and innovation will be the driving force behind India’s prosperity. We are looking at significant participation of startups in defence research and development. We are also looking at creating a fund for agritech startups.”

“It is these startups that will fuel India’s Aatmanirbhar drive,” he further added. 

Building Up On Budget Promises

This comes on the heels of finance minister Nirmala Sitharaman announcing a fund for agritech startups during her Budget speech. In her speech, the FM had proposed setting up a blended capital fund under the co-investment model facilitated via NABARD that would finance agritech startups.

All rural enterprises and startups engaged in food producer organisations (FPOs), farm rental services and IT-based support would be eligible for the scheme.

Sitharaman, in the Budget, had also envisaged a scheme in Public Private Partnership (PPP) mode that would enable the delivery of digital and hi-tech services to farmers. 

The Budget 2022 had also sought to spur the usage of drones in the farming sector. The financial document has noted that the government aims to promote the use of Kisan Drones for crop assessment, digitisation of land records, and spraying of insecticides and nutrients. 

The Mega ‘Kisan Drone’ Push

This comes barely days after a senior government official had stated that the DGCA and Agriculture Ministry was jointly working to fast track applications and adoption of drones in the agriculture sector.

The official had also stated that authorities had so far received applications from eight crop protection companies seeking permission for conducting trials of drones.

In addition to this, the National Institute of Plant Health Management has also developed a  ten-day training module for ‘Kisan Drone’ pilots, which is currently awaiting DGCA clearance.

Thrusting Kisan Drones into the public imagination, Prime Minister Narendra Modi, in February this year, also flagged off 100 Kisan Drones for spraying pesticides over farms in various parts of the country.

Also, in a bid to shore up the homegrown drone industry, the Ministry of Civil Aviation (MoCA) last month also banned the import of drones with immediate effect with certain caveats. 

Agritech: Working In Silence

Despite being called India’s ‘backbone’, the agriculture sector continues to lag behind. It contributes 16.5% of India’s gross domestic product (GDP) and employs 43% of the Indian workforce. Yet, it faces innumerable challenges from poor yield to traditional mechanisms of operations which stifle financial growth.

In a bid to solve this conundrum, a slew of agritech startups have sprung across the country. India is home to over 1,000 agritech startups.

Last year, agritech startups raised close to $684 Mn across 47 deals. In total, the agritech sector has raised $1 Bn in funding between 2014 and 2021.

Startups such as DeHaat, Ninjacart, Agrowave, BharatAgri, BigHaat, Bijak, Gramophone, Krishify, Cropin and many others have revolutionised the field.

The sector has been buoyed by increased rural Internet penetration and use of innovative new technologies that offer timely information and agricultural solutions at a fraction of cost.

An Inc42 report estimates India’s addressable agritech market to take off and reach $24.1 Bn by 2025.

Earlier this month, agritech startup Ninjacart acquired SaaS-based smart solutions provider, Tecxprt, for an undisclosed amount. This was followed by another such startup Otipy raising $32 Mn in a Series B funding round from its existing investors including Westbridge Capital.

In February, B2B agritech startup AGRIM had raised $10 Mn in Series A funding led by Kalaari Capital

In January this year, fresh produce distribution startup WayCool had raised $117 Mn in a Series D funding round.