Agriculture is one of the strongholds of the Indian economy and accounts for 18.5 per cent of the country’s gross domestic product (GDP).

The average growth rate of agriculture and allied sectors during the last two years i.e., 2006–07 and 2007–08 has been more than 4 per cent as compared to the average annual growth of 2.5 per cent during the 10th Five Year Plan.

According to a Rabobank report the agri-biotech sector in India has been growing at a whopping 30 per cent since the last five years, and it is likely to sustain the growth in the future as well. The report further states that agricultural biotech in India has immense potential and India can become a major grower of transgenic rice and several genetically engineered vegetables by 2010.

The food processing sector, which contributes 9 per cent to the GDP, is presently growing at 13.5 per cent against 6.5 per cent in 2003–04, and is going to be an important driver of the Indian economy.

Production

India has become the world's largest producer across a range of commodities due to its favourable agro-climatic conditions and rich natural resource base.

India is the largest producer of coconuts, mangoes, bananas, milk and dairy products, cashew nuts, pulses, ginger, turmeric and black pepper. It is also the second largest producer of rice, wheat, sugar, cotton, fruits and vegetables.

According to the Centre for Monitoring Indian Economy (CMIE), crop production is expected to rise by 1.7 per cent during FY 10. Foodgrain production is expected to increase by 1.1 per cent. Of this, wheat production is projected to remain at the same level of 80 million tonnes as estimated for FY 09. Rice production is projected to increase by 1.1 per cent to 98.8-million tonnes. Production of coarse cereals and pulses is also expected to rise in FY 10.

Cotton production in India, the world’s second-largest producer, may rise 10 per cent to about 32 million bales (one bale is equal to 170 kg) in the 2009-10 season (October-September) on high support price and more sowing of high-yielding Bt seeds.

India’s coffee output is pegged at 3.1 lakh tonne in 2009-2010, 4.4 per cent higher compared to 2008-09, according to the post-blossom estimates released by the Coffee Board. India is likely to climb up in the ranking list of world top 10 coffee-producing countries if the actual output in 2009-10 matches estimates. According to the International Coffee Organisation (ICO) India has a bright chance of becoming the fifth largest coffee producer in the world, replacing Mexico. Currently, it is placed in the sixth position.

Exports

According to the government's agri-trade promotion body, Agricultural and Processed Food Products Export Development Authority (APEDA), India's exports of agricultural and processed food products posted a 38 per cent increase in the 2007–08 fiscal, bolstered by an increase in shipments of coarse cereals like maize, jowar and barley. According to official data, India exported about 17.5 million tonnes of agricultural and processed foods worth about US$ 6.39 billion in FY 2007–08 against 10.9 million tonnes valued at about US$ 4.37 billion in the previous year.

Though the global recession is still lingering on, India’s agri-export turnover is expected to double in the next five years, according to APEDA. Agri-export turnover is set to rise from US$ 9 billion to nearly US$ 18 billion by 2014.

Despite recession, the country’s agri-exports have registered a 25 per cent growth in 2008-09.

At present, around 70 per cent of the country’s agricultural and processed food exports are to developing countries in the Middle East, Asia, Africa and South America.