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Agriculture is playing an important role in the growth of India’s economy. Over 58 percent of rural households depend on agriculture as their principal means of livelihood. The agriculture and allied sectors contribute 16 percent to the Indian GDP. India is the world’s largest producer of spices, pulses, milk, tea, cashews and jute, and the second largest producer of wheat, rice, fruits and vegetables, sugarcane, cotton and oilseeds.
India’s agricultural industry is divided into several sub-segments, such as canned, dairy, processed, frozen food, fisheries, meat, poultry and food grains.
Growth in household income, consumption and expansion in the food processing sector are the factors facilitating the growth of the Indian agriculture sector. Rising private participation in Indian agriculture, growth in organic farming and use of information technology are some key trends in Indian agriculture.
India has by far the most vegetarians of any country on earth: As much as 40 percent of the Indian population is vegetarian, compared with 5 percent in China and less than 2 percent in the U.S. India’s annual food imports have increased 60 percent since 2010 to reach around $25 billion in 2015, and are expected to grow more in the coming years. Consecutive droughts in rural India, lack of long-term investment in agriculture and increasing demands from a growing population have weakened the country's efforts to become self-sufficient in food. This creates a lucrative import opportunity of agro-products from the U.S.
India ranks second worldwide in farm output, and the farm equipment sector is valued at around $7 billion. Around 40 to 50 percent of the country’s agriculture operations are mechanized, compared to 95 percent in advanced countries, which means 60 percent is still done by people and draft animals. Use of proper equipment in India can increase the farm productivity by up to 30 percent and reduce the input cost by about 20 percent.
The Indian annual budget for FY 2016-17 proposed a slew of measures to improve agriculture and increase farmers’ welfare, such as bringing 7 million acres under irrigation.
Even with imports of agricultural products, farmers in India are adopting modern agricultural technologies to increase farm yield and meet increasing demand for food supply, creating opportunities for foreign suppliers.