Why is India’s Agro Industry on the Right Track to Bloom with the 2025 Union Budget?

In FY24, the agriculture sector accounted for 1/6th of India’s GDP while employing more than 45% of the Indian workforce. And in absolute numbers, it has witnessed a CAGR of 5% from 2017 to 2024. This consistent growth is primarily driven by various government initiatives and policy reforms focused on enhancing productivity, promoting diverse crop cultivation, and increasing farmers' incomes.

Consequently, we have seen a significant uptick in the demand for agrochemicals, which are crucial in improving crop yields and protecting produce from pests and diseases. Combined with the increasing pressure on land productivity, farmers are turning to advanced fertilizers, pesticides, and biostimulants to enhance soil health and ensure better harvests. 

When we account for all of this with the Indian Union Budget 2025 and different initiatives taken by the government, it's evident that India's agriculture and agrochemical sector has a bright future ahead.

A Decade of Growth in the Indian Agriculture Sector

Over the past decade, the Indian government has implemented numerous budgetary reforms that have significantly shaped the agriculture and agrochemical industry. These policies have laid a strong foundation for self-sufficiency, technological advancement, and sustainability in Indian farming. Some of the most impactful initiatives include:

1. Soil Health and Fertilizer Subsidies (Union Budget 2015-16 & 2016-17)

The Soil Health Card Scheme, launched in 2015, was a game-changer in promoting sustainable farming practices. By providing farmers with soil quality assessments and crop-specific recommendations, this initiative encouraged the judicious use of fertilizers, reduced excessive application, and improved soil fertility. Additionally, the government continued its Direct Benefit Transfer (DBT) in the Fertilizer Subsidy under Budget 2016-17, ensuring efficient subsidy allocation and minimizing system leakages.

2. PM-KISAN and Boosting Farmer Income (Union Budget 2019-20)

A landmark reform was introduced in 2019 with the introduction of Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), which provides direct income support to small and marginal farmers. Under this scheme, ₹6,000 per year is transferred directly into farmers' bank accounts, improving their purchasing power for agricultural inputs, including agrochemicals. This policy directly contributed to the increased adoption of high-yield seeds, pesticides, and biostimulants.

3. Agricultural Infrastructure Fund & Agri Credit (Union Budget 2020-21)

Budget 2020-21 saw the creation of a ₹1 lakh crore Agricultural Infrastructure Fund to strengthen post-harvest infrastructure and modernize agri-logistics. A significant rise in agricultural credit targets supported input procurement, including agrochemicals. These investments indirectly boosted demand for fertilizers and pesticides as farmers accessed better resources to maximize yields.

4. PLI Scheme for Agrochemicals & Export Push (Union Budget 2021-22 & 2022-23)

The Production Linked Incentive (PLI) scheme, introduced in 2021, focused on boosting domestic manufacturing, including agrochemicals, and reducing import dependency. In 2022, the government increased the Rashtriya Krishi Vikas Yojana (RKVY) allocation to ₹10,433 crore, strengthening agri-research, innovation, and technology-driven crop protection solutions. With growing global demand, India’s agrochemical exports surged, solidifying its position as a key supplier to markets like Latin America, North America, and Africa.

5. Natural Farming and Green Revolution 2.0 (Union Budget 2023-24)

The latest push toward sustainable agriculture came in 2023, emphasizing natural and organic farming under the PM-PRANAM scheme. The government encouraged a gradual shift toward biofertilizers and biopesticides, reducing reliance on synthetic chemicals. Additionally, the expansion of Nanourea plants and research into climate-resilient crops supported long-term sustainability, with implications for agrochemical formulations adapting to evolving agricultural needs.

India’s Agrochemical Boom: A Thriving Market Poised for Global Dominance

The Indian agrochemical sector is expanding at a CAGR of 4% and is expected to reach $13.9 billion by 2029, with exports rising to $9 billion during the same period. Given the positive steps taken by the Indian government to facilitate this growth, India will become one of the leading players in the agrochemical industry. Combining this with high quality and affordable prices makes it a no-brainer for most countries to choose India as their primary source of agrochemical imports.

This trend also continues in the domestic market with rising focus on land productivity. Indian farmers are adopting high-yield crop varieties, precision farming techniques, and advanced agrochemical formulations to maximize output per hectare. Agrochemicals—specifically pesticides, herbicides, and fertilizers—are used for minimizing crop losses and improving yields while pesticide usage alone is estimated to prevent 30-70% of crop damage annually.

Additionally, the rising costs of labour and increasing crop losses due to weeds have also increased the usage of herbicides among Indian farmers. They are now choosing chemical-based weeding over traditional or manual-based methods. As a result, the herbicide market in India is expected to cross $500 million by 2030 with a CAGR of 8.49%.

The Future of the Agriculture Industry in India

The Union Budget 2025-26 introduced several key initiatives to strengthen India’s agriculture sector, enhance productivity, and promote self-sufficiency in critical crops. The government has strongly emphasized research, irrigation, and market linkages to support farmers and ensure sustainable agricultural growth.

1. Prime Minister Dhan-Dhaanya Krishi Yojana

Aimed at 100 districts with low agricultural productivity and crop intensity, this initiative will focus on improving irrigation, crop diversification, and credit access. The scheme is expected to benefit approximately 1.7 crore farmers, enhancing their income and productivity.

2. Mission for Aatmanirbharta in Pulses

To reduce import dependency, a six-year mission targeting Tur, Urad, and Masoor pulses will be launched. Under this plan, NAFED and NCCF will procure pulses directly from farmers for the next four years, ensuring stable prices and adequate supply.

3. National Mission on High-Yielding Seeds

The government will invest in developing 100+ high-yielding, pest-resistant, and climate-resilient seed varieties to increase agricultural resilience. These seeds will be made commercially available, enhancing crop productivity and sustainability.

4. Expansion of Domestic Fertilizer Production

A new urea plant in Namrup, Assam, will be established, with an annual capacity of 12.7 lakh metric tons. This move aims to reduce fertilizer imports and support farmers with a steady supply of essential crop nutrients.

5. Comprehensive Programme for Fruits & Vegetables

A new scheme will be launched in collaboration with state governments to improve horticulture productivity, market linkages, and value-added processing. This initiative is expected to boost income for fruit and vegetable growers while ensuring price stability.

Final Thoughts

India’s agrochemical industry is at the cusp of a major transformation, driven by sustained policy support, technological advancements, and increasing global demand. The Union Budget 2025-26 builds on a decade of reforms, ensuring that Indian agriculture remains competitive, resilient, and self-sufficient.

With rising land productivity needs, export potential, and a shift towards precision farming, the sector is poised for long-term growth. As India cements its position as a global agrochemical powerhouse, continued investment in innovation, sustainability, and market expansion will be key to unlocking new opportunities for farmers and industry players alike. The future looks promising and robust.