Top 10 Agro-based Industries in India 2023 | Tractorgyan

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Top 10 Agro-based Industries in India 2023 | Tractorgyan

    Top 10 Agro-based Industries in India 2023 | Tractorgyan

06 Dec, 2022

Agriculture is growing and expanding day by day. Along with technological advancements, the change in climatic and weather conditions paved the way for the growth of crops and the development of industries.

Agro-based industries as the name say ‘agro’ is related to agriculture. Agro-based industries are industries that use plants and animal-based agricultural output as their source of raw material. Additionally, they increase the value of agricultural output by processing it and creating goods that can be sold and used. India's textile, sugar, vegetable oil, tea, coffee, and leather goods sectors are a few examples of countries with agro-based businesses.

Agro-based industries are highly dependent upon agriculture for their raw material and other necessary outputs. The link or interdependence of agriculture and industries is directed towards increasing the growth, development, and revenue of the country. Setting up agro-based industries not only helps in the rapid production of agricultural goods but also creates employment in the country with the establishment of industry.

The agro-based industries can be collectively classified into two broad terms – food processing and nonfood processing. 

The food processing industry deals with the preservation of perishable food items and the utilization of – products for other purposes. They mainly include – rice, wheat, maize, pulses, meat, fruits, vegetables, etc.

Textile, sugar, paper, and vegetable oil industries are included in the agro-based sector. Agriculture-related products serve as the raw material for these industries. The largest organized sector industry is the textile industry.


Types of agro-based industries:

Types of agro-based industries

There are mainly four different types of agro-based industries namely - Produce processing units, input manufacturing units, produce manufacturing units, and agro-service centres are the four primary categories of agro-based industries. 

Below, you'll find information about the many agro-based industries in India: 

  1. Agro-Produce Processing Units: This sector deals with the processing and storage of agriculturally based raw materials. Utilizing agricultural byproducts of raw resources is another concern. 
  2. Agro-Produce Manufacturing Units: This sector of the agricultural economy focuses on the production of raw materials. After production, the final product is entirely distinct from the raw material that was used. 
  3. Agro-input manufacturing facilities: The goods produced in this sector are utilized as inputs to boost agricultural output.
  4. Agro Service Centers: All farm-related equipment is repaired and serviced at these service facilities. Due to its focus on agricultural equipment, this industry is a subset of those that are based on agriculture.

Example of Agro-Based Industry: 

Agro Based industries are of different types and operate in different working conditions however the only common thing among all the agro-based industries is that they make use of raw materials.

  1. Agro-produce processing units have – Dal and Rice Processing Mills
  2. Agro-produce manufacturing units have – bakery, sugar, and textile factory or industry
  3. Agro Input manufacturing units have – pesticides, fertilizers, and tools
  4. Agro service centres have – the servicing and repairing of farming equipment like tractors, and diesel engines.

Challenges faced while the establishment of agro-based industries:

1. Some degree of risk-taking is involved. 

2. Changes in crops and cropping practices Changes in crop varieties because of technological advancement 

3. A monsoon failure could affect the supply of basic materials. 

4. The diversity of agricultural products and the lack of an appropriate approach to choosing the industries that are best suited to a particular region. 

5. A seasonal supply of agricultural products may cause the units' capacity to be underutilized because they won't be operating all year. 

6. Fruit and vegetable-based industries might not always receive the same variety, but they might receive another kind.

The creation of ill units (those that have suffered more than 50% losses) is a result of the backwardness in rural areas. 

The entrepreneur is unable to make use of the opportunities that are available since there is a lack of institutional support in these areas. The wealthy in rural areas can truly take advantage of this industry and aid in creating jobs for many people. However, no policy has made provision for this. 

The prospects that are available to rural entrepreneurs are not well known, and it is difficult for them to learn about and copy the strategies of successful businesspeople.

The amount and calibre of raw resources vary in agro-based industries. Variations in weather and soil conditions have a negative impact on the number of raw resources. Because of a lack of standardization, the quality decreases. These elements put additional pressure on production, scheduling, and quality control activities in agro-based companies.


Significance or importance of agro-based industries are:

1. Agro-based industries are mainly responsible to remove unemployment and create further employment opportunities for rural areas such that most of the rural population does not migrate to urban lands.

2. Setting up of agro-based industry supports the growth of industry and agriculture.

3. When considerable investment is required for an activity, people can collaborate, which promotes the cooperative growth of all parties. 

4. These actions assure total usage of raw resources, many of which would otherwise be wasted due to their short shelf lives. 

5. Several businesses, such as food processing, have significant export potential abroad. 

6. Even though agriculture suffers greatly economically in many ways, there is always room for innovation in agro-based sectors, which benefits human development.


India's Top 10 Agro-Based Industries – An Overview

The following is a list of India's top 10 agricultural-based industries:

1. Textile Industry:

Textile Industry

The textile industry is responsible for the design, manufacture, distribution, and marketing of yarn, textiles, and ready-to-wear garments. Cotton textiles, woollen textiles, silk textiles, synthetic fibres, and jute textiles are all produced here. The industry is India's second-largest employment after agriculture, hence it plays a vital part in the country's economy. 

India's textile industry is the country's largest agro-based sector. Garment production is the focus of this sector. It is a self-sufficient industry that manufactures everything from raw materials to finished value-added products for its customers


2. Industry of Food Processing:

Industry of Food Processing

The food processing business in India is one of the world's largest, making it the country's fifth-largest industry and the most important agro-based industry. Dairy, sugar, vegetable oil, and tea/coffee processing industries are among India's most important food processing sectors.


3. Industry of Dairy:

Industry of the Dairy

The dairy industry is one of India's most important industries, accounting for up to 4% of the country's GDP. It is one of the best sources of second-hand money for Indian farmers, making it one of the most popular occupations in rural areas across the country. For many years, it has been practised all over India, resulting in India contributing 20% of the total global milk supply. The raw material in this industry is Milk, while the finished products from this industry are Butter, Cheese, Cream, Condensed Milk, Dried Milk, Packaged Milk, Ice Cream etc.


4. Industry of Sugar:

Industry of Sugar

The sugar industry is in charge of supplying sugar, which is an essential component of the human diet. During 2019-20, India slid to second place in sugar output, narrowly losing the top title to Brazil. India produced 28.9 million metric tonnes of sugar, accounting for nearly 17% of global sugar production of 166.18 million metric tonnes. 


5. Industry of Vegetable Oil:

Industry of Vegetable Oil

The Indian vegetable oil business produces around 5% of the world's vegetable oil. India is the world's largest user of edible oils. In addition, India is the world's largest importer of edible oils, with 15 million tonnes imported yearly, accounting for roughly 14% of global vegetable oil imports. In the Indian diet, vegetable oil is the primary source of fat. Vanaspati is a type of hydrogenated vegetable oil popular in India. Depending on the technology used, different locations employ different materials. Coconut, mustard, and groundnut are the most prevalent raw materials used in this sector.


6. Industry of Tea:

Industry of Tea

After water, tea is the second most-consumed liquid on the planet. In addition, India is one of the world's major tea consumers, consuming around three-quarters of global production. Assam, West Bengal, and Kerala are the primary producers of tea. The industry operates all year and employs approximately 1 million people.


7. Industry of Coffee:

Industry of Coffee

India has long been a tea-loving country, but in the last two decades, we have seen an extraordinary increase in the number of coffee drinkers; India is now the world's sixth-largest producer and exporter of coffee. In 2019-20, coffee production totalled 2,99,300 million tonnes, accounting for 3.14 per cent of total global coffee production. 


8. Industry of Leather Goods:

Industry of Leather Goods

One of the most commonly traded commodities on the planet is leather. The Indian leather industry produces around 12.93 per cent of the world's leather hides and skins. In addition, India's overall exports of leather and leather products were USD 5.07 billion in 2019-20.

Hides and skins from cattle, large animals, and small animals such as sheep and goats are the primary raw materials used in this sector. Kanpur is known in India for its leather industries, and it boasts some of the best leather companies in the country, which are known for their high-quality products. This business is also noted for employing a significant number of young people, providing a large number of job chances for our country's youth.


9. Industry of Bamboo:

Bamboo Industry

The bamboo plantation is a common practice in India's eastern regions, and it provides a valuable source of income for these areas. Bamboo-based sustainable products are becoming increasingly popular as environmental challenges are brought to light


10. Industry of Jute:

Jute Industries

The jute industry is one of West Bengal's most prominent sectors, with 60 of the state's 70 jute mills located along the Hooghly River's banks. The jute business is a significant agro-based industry in India, supporting the livelihoods of over 4 million people. The jute sector is currently expanding at a rapid pace, and it has now established itself as an important part of our economy.


All of these agro-industries are critical to the economy of our country. Because they employ a big portion of our population while also sustaining our economy. The profit proportion of farmers is also determined by the demand from these businesses. Although other factors play a role, once the ultimate crop is produced, it is entirely dependent on industry demand. As a result, agricultural and agro-based sectors are mutually reliant on one another for growth.


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