Budget 2025: Agritech sector calls for focus on infrastructure and sustainability

As the Union Budget approaches, there is growing anticipation about how it will address some of the critical challenges faced by India’s agricultural sector.

The agriculture sector in India is grappling with several issues that are deeply intertwined with both economic and environmental concerns. These include post-harvest losses, inadequate infrastructure, climate change, and limited access to modern technology. 

As India strives to ensure food security for its growing population while facing the challenges posed by climate change, key interventions in the Budget could pave the way for a more sustainable future. 

Experts and leaders from the agriculture sector are urging for targeted investments to address these issues. They are also calling for improvements in rural infrastructure to reduce post-harvest losses, improve credit accessibility, and foster innovation through agritech solutions. 

The role of agritech innovations is seen as particularly crucial. These technologies can offer solutions to enhance productivity, reduce resource wastage, and foster sustainable farming methods. 

Reduce post-harvest losses

Post-harvest losses account for nearly 20% of India’s total agricultural output annually, according to the FAO (2023). Insufficient storage, cold chain facilities, and transportation infrastructure exacerbate this problem, affecting farmer incomes and food security.

Dhanashree Mandhani, Founder and CEO of Salam Kisan, a Mumbai-based agritech platform,  says, “Strategic investments in storage facilities, cold chains, and logistics can significantly reduce post-harvest losses and strengthen market linkages.”

The government’s PM GatiShakti program, aimed at creating multi-modal logistics hubs, has shown early promise. According to a 2023 report by NITI Aayog, over 500 projects in the agricultural supply chain are underway, focusing on rural connectivity.

Shashank Kumar, Co-founder and CEO of DeHaat, a Patna-based agritech platform, highlights the export dimension. “India’s agricultural export volume has doubled in recent years, reaching nearly $50 billion. Sustaining this momentum requires enhancing export-oriented infrastructure, providing freight subsidies, and supporting farmers to align with global norms.” The Agricultural and Processed Food Products Export Development Authority (APEDA) recently launched an initiative to promote GI-tagged products, further enhancing export potential.

Fostering innovation through agritech solutions

Agritech has emerged as a game-changer in Indian agriculture, with drones, artificial intelligence (AI), and IoT offering scalable solutions. The government’s 2023 announcement of a dedicated agri-stack aims to consolidate farmer data for better decision-making.

Deepak Bhardwaj, Co-founder and Director of IoTechWorld Avigation, a Gurugram-based agri-drone manufacturer, underscores the efficiency of drones. “Our drones can spray an acre of land in just seven minutes and reducing labour and resource consumption. This kind of innovation is key to achieving higher yields while minimising environmental impact.”

Mandhani of Salam Kisan adds context to this transformative potential and says, “Emerging technologies like drones and AI have the potential to cut input costs by 20-30%, enhance efficiency, and boost productivity. Establishing drone hubs could further support this vision by creating rural employment and building a strong agritech ecosystem.” 

Drone hubs have been piloted in Karnataka and Punjab, providing valuable insights into scalability and operational challenges.

Sat Kumar Tomer, Founder and CEO of Satyukt Analytics, a Bengaluru-based startup that utilises satellite data and advanced technologies to improve agricultural practices, highlights another aspect of agritech. He says, “Improved internet access and digital literacy will enable farmers to leverage real-time data on soil health, weather, and market trends, empowering them to make better decisions.” 

The BharatNet project, aiming to provide broadband to all gram panchayats by 2025, is expected to bolster these efforts.

Enhancing credit accessibility and physical infrastructure

Access to affordable credit remains a key hurdle for Indian farmers, with traditional mechanisms like the Kisan Credit Card (KCC) proving insufficient for modern agricultural needs.

Siddharth Dialani, Co-founder and CEO of BharatAgri, proposes a data-driven solution. “A repository with credit profiling of all farmers will facilitate easier access to credit for credit-worthy farmers.” The recent rollout of the Unified Payment Interface (UPI) for rural banking is a step toward integrating smallholder farmers into formal financial systems.

Shashank Kumar elaborates on financing gaps: “Much of the market remains underserved, with farmers struggling to access structured financing beyond traditional mechanisms like KCC. The budget should focus on improving financial inclusion through data-driven underwriting and support for private and agritech players to facilitate credit access.” 

Recent collaborations between agritech firms and NBFCs have shown promise in bridging this gap, with over Rs 2,000 crore disbursed in 2023 alone.

Empowering startups and MSMEs

Startups and MSMEs are driving innovation in agriculture, but they face challenges in scaling operations due to limited funding and policy support.

“A 10-year tax holiday for agritech startups and subsidies for capital expenditures would encourage innovation. Additionally, a Production Linked Incentive (PLI) scheme for MSMEs focused on agri-tools and machinery would drive growth in the sector,” says Rohit Bajaj, Co-founder of Balwaan Krishi, a Jaipur-based MSME startup specialising in agricultural tools manufacturing. 

Recent PLI schemes in other sectors such as electronics have demonstrated significant success, contributing to over Rs 8 lakh crore in additional production. Extending this approach to agritech could yield similar results.

Saket Chirania, Co-founder of Agrizy, a Bengaluru-based agri-processing platform, stresses the importance of research funding. “Dedicated funding for R&D initiatives will ensure that Indian products can compete globally,” he says. 

In 2023, the Indian Council of Agricultural Research (ICAR) announced a partnership with private firms to accelerate innovation in crop genomics and food safety.

“The development of an agri-stack, as announced in the previous budget, must be translated into actionable steps at the state level to consolidate data and make it accessible for private players. This will foster better decision-making and innovation within the sector,” adds Shashank Kumar.

Promoting sustainable agriculture practices

Climate change is reshaping agricultural practices globally, and India is no exception. The National Mission for Sustainable Agriculture has highlighted the importance of water conservation and resilient crop varieties.

“Adopting water-saving technologies and climate-resilient seeds is essential. Incentives for drip irrigation and rainwater harvesting will empower farmers to adapt to changing climatic conditions,” adds Mandhani. In 2023, Maharashtra reported a 25% increase in drip irrigation coverage, supported by state subsidies.

Kumar advocates for sustainable solutions and says, “The budget should incentivise research and development of region-specific biological products and encourage their adoption by farmers. Promoting soil health cards and sensor-based solutions will enhance soil preservation and overall farm productivity.”

The soil health card initiative, launched in 2015, has expanded to cover over 50% of farmland, but experts suggest further refinement in data accuracy.