Tuesday 6 January 2015

Investment Opportunities in Indian Agriculture Sector

The primary source of employment in India has been agriculture for several years having more than 65% of the population trusting on it. Indian agriculture has always been the major contributor when it comes to the Indian economy, playing a lead role in supporting the country’s sustainability and growth.

Size of Agriculture Market in India

India has been the highest supplier of jute, milk, jute, pulsed and organic fibers in the global market. It’s the second biggest supplier of wheat, rice, sugarcane, groundnuts, vegetables, and cotton. It also supplies the biggest chunk of spices and plantation crops across the world. Apart from all these, India also leads the supply of poultry, livestock, and fisheries.

Considering the growing population and other factors, the growth of the agricultural sector in India manifests a huge impetus with growing demand for agricultural products from the international market. The demand for rice from countries like western Asia, Southeast Asia, and some countries in Africa has been growing immensely.

Investment Opportunities in the Indian Agricultural Sector

Demand of agricultural products like hybrid seeds and high quality fertilizes has received an overwhelming demand.

Tons of food in India gets wasted each year because of lack of proper storage facilities. The investment opportunities in the food storage facilities are also a promising sector for both private and foreign investors.

Opportunities of Investments in Food Storage Infrastructure:

In 2011-12 year budget, an automatic route by 100% FDI has been allowed for the investment companies in food storage infrastructures.

Service tax has been fully exempted along with the 5% concession on stamp duty for the companies investing in cold storage expansion plans in India.

In addition, the refrigerator units for the storage vehicles like vans, trucks are also totally exempted from customs duty.

Foreign companies that are investing in the Indian agricultural industry will require investing minimum half of the total investment amount on infrastructure and support facilities.

Synopsis

The Indian government is working towards transforming the agriculture sector a promising investment industry for global players. With the Food Security Bill introduced in parliament, the need for better investments in this sector of India has gotten new impetus. Investment in agriculture in India is one of the most promising opportunities for global companies as well.

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