Indian Govt To Set Up INR 500 Cr Accelerator For Agritech Startups

On the final day of the PM Kisan Samman Sammelan, Union Agriculture Minister Narendra Singh Tomar announced a raft of initiatives to spur agritech startups in the county. 

Addressing an event organised on the sidelines of the farmers’ conference in Delhi, Tomar announced the setting up of an INR 500 Cr startup accelerator to scale up agritech startups in the country. 

In a bid to guide the overall agritech startup ecosystem, the government will also set up a steering committee, an executive panel and a separate division solely dedicated to agritech startups will also be spun off within the Ministry of Agriculture under the leadership of the joint secretary. 

Other initiatives included:

• A single-window clearance agency for agritech players, which will serve as a one-stop shop for startups to facilitate linkages required with certification agencies, financial institutions, agricultural universities and others. 
• A market linkage platform for directly connecting agritech startups with the actual market. Organisations such as e-NAM (National Agriculture Market) and NAFED (National Agricultural Cooperative Marketing Federation of India) will be onboarded as part of the initiative to ensure that agritech products reach their intended audiences. 
• A database for enumeration of startups operating in the agriculture sector and monitoring their development. 
• Organising ‘Agri Startup Conclaves’ at national and regional levels to promote startups in the sector. 

Tomar said that India was currently home to more than 2,000 agritech startups, adding that the central government plans to take this number to 10,000.

The Agriculture Minister also exhorted Indian entrepreneurs to work in the domain of food security, especially in view of the menace of climate change. He also noted that many of the government arms were committed towards working with startups to solve challenges in the agriculture sector. 

The slew of announcements come barely a day after Prime Minister Narendra Modi threw open the PM Kisan Samman Sammelan 2022 on October 17. He had said that the growing number of agritech startups would augur well for the Indian agriculture sector and rural economy.

As many as 1,500 agritech startups participated in the exhibition that took place at the Indian Agricultural Research Institute campus in New Delhi’s Pusa. These players showcased their products such as precision farming, post-harvest and value add solutions, allied agriculture, mechanisation for small farmers and supply chain management to the visitors. 

Agritech To The Rescue 

Despite being the biggest employer in the country, agriculture continues to be the broken backbone of the Indian economy. With more than 15.2 Cr farmers, the sector contributed around 53.89% of India’s total GVA in 2021. 

The ailing sector continues to be marred by older methods of tilling and a near-total absence of market linkages to enable better price discovery for farmers. Stuck in a vicious loop of middlemen and barely making ends meet, the farmers continue to be impoverished on the lot.

In a bid to address these gaps, a clutch of agritech startups has emerged in the past many years. From overhauling the agri-business ecosystem to farm automation players, the space has seen the evolution of the entire value chain to scale up production and provide direct benefits to farmers. 

Meanwhile, the government has also doubled down on the space to address the current set of challenges. While the government’s farm law push hit a wall amid widespread protests, the centre has now resorted to enabling agritech players to fill the chasm. 

Earlier this year in her Budget speech, finance minister Nirmala Sitharaman had announced a blended capital fund for agritech startups. During the same address, she also called for leveraging ‘Drone Shakti’ to streamline the usage of UAVs for crop assessment, digitisation of land records, and spraying of insecticides and nutrients.

While work is underway on both fronts, a lot of work still has to be done to spur adoption. Compounding matters appear to be no regulatory framework to oversee the burgeoning space. 

Meanwhile, agritech startups continue to grow by leaps and bounds. Recently, Inc42 reported that agritech startup DeHaat was in talks to raise nearly $100 Mn in its Series E round at a valuation of over $1 Bn. Previously in June, another agritech player Waycool raised $40 Mn in funding from a clutch of investors including 57 Stars.

An Inc42 report estimates the Indian agritech industry to grow to a size of $24.1 Bn by 2025. Since 2014, Indian agritech startups have raised close to $1.9 Bn funding.