India’s agribusiness: A trillion-dollar horizon amidst shifting tides

India’s agribusiness sector, a vital pillar of its economy, is poised for substantial long-term growth, with projections indicating it could exceed USD 1.4 trillion by 2034. This growth is underpinned by robust domestic demand from a large and expanding population, rising incomes, and increasing urbanization, which are driving a shift towards high-value commodities like fruits, vegetables, dairy, and meat. Government support, including an INR 1.4 trillion allocation to the Ministry of Agriculture and Farmers’ Welfare in FY2026 , along with initiatives for credit, insurance, and infrastructure, further fuels this expansion.

Additionally, improving productivity through better irrigation, mechanization, and digital agriculture, coupled with growing export opportunities (agricultural exports reached USD 48.3 billion in 2025), are key drivers. The sector currently contributes approximately 16.3% to India’s GDP and employs over 41% of the workforce.

Despite this promising outlook, the sector faces significant challenges. Low productivity, stemming from fragmented landholdings, inadequate infrastructure, and limited technology adoption, keeps yields below global benchmarks. Climate vulnerability, with a reliance on monsoon rainfall (expected to be below average in 2026 due to El Niño conditions), leads to production volatility. Extensive government intervention, particularly through Minimum Support Prices (MSPs) for rice and wheat, has historically disincentivized crop diversification.

Furthermore, a narrowing agricultural trade surplus, from over USD 19 billion in 2021 to just over USD 10 billion in 2025 , highlights increasing import dependence for commodities like edible oils and pulses.12 Addressing these structural issues through continued investment, policy reforms, and technological advancements will be crucial for India to fully realize its agribusiness potential.