Investment Opportunities in Indian Food & Agri Business Sector

Here is a summary of my talk at the BRIC-IBSA Business Forum in Rio De Janeiro on 14 April 2010

Investment Opportunity in Indian Food & Agri Business Sector is founded on Four Pillars

Large Sector with further tremendous upside

Indian Consumer is seeking new products

Production system has potential to supply those new products

The Business environment is very conducive


Pillar 1: Large Sector & Further Upside

Size > US$ 200 Billion

50% of household expenditure is on Food

50% of workforce is engaged in agriculture

That rest of the economy is outgrowing agriculture, is a signal for investment opportunities in agriculture

Pillar 2: The Consumer Dimension

More than 1 billion consumers

Rising incomes & rapid urbanisation changing the profile of consumption

Global experience: US$ 1000 per capita is the sweet spot for shift in food consumption patterns, from basic to value added food

Consumer is looking for new value: quality, variety, safety, convenience etc.

Besides this domestic opportunity, there are export prospects too in several products

Pillar 3: The Production System

Large arable area > 150 million ha

Rich & diverse agro climatic zones

Characterised by small farmers

Good scope for productivity enhancement through technology induction

Pillar 4: The Business Environment

Significant private participation after policy reforms in the last decade

Traditional farm labour seeking new jobs

Large infrastructure investments in the recent past: roads, telecom, irrigation etc

Thrust area for Government as a strategy for “inclusive growth”

The Investment Opportunities

Innovation at the consumer end of the chain (Processing, packaging, retail formats)

Effectiveness at the farmer end of the chain (Productivity, quality – pre & post harvest, labour saving technologies)

Efficiency along the whole chain (Integration, coordination, infrastructure)

Cross BRIC-IBSA collaboration imperative (Food Security, Climate Change)