The Indian Agricultural Irrigation Machinery market is estimated to grow at a CAGR of 5.3% during the forecast period. Water scarcity being the major concern in the current agricultural scenario is the foremost driving factor for the growth of this sector followed by the awareness about the micro-irrigation system, need for high productivity to meet the food demand due to the increased population. In 2018, the drip irrigation system dominated the market, in terms of revenue of around 75.5%. Current agricultural scenario water scarcity has been a major challenge in India and is, thereby, a critical driver for the use of micro-irrigation machinery systems.
India faces typical water issues, primarily due to the population growth and lack of availability of quality water., the demand for agricultural irrigation machinery is rapidly increasing in India. The irrigation machinery market in India is a high volume and highly competitive space. The growth of the market has been consistent and is particularly high in the regions of Maharashtra, Andhra Pradesh, Gujarat, Karnataka, and Tamil Nadu. The impact of using drip irrigation is well perceived in the country due to the various political and social awareness campaigns that have promoted the technology in the country
Key Market Trends
Subsidies From Government and Support From Financial Institutions
The Indian Government approved initial aggregation of USD 702.3 million for setting up micro-irrigation Fund (MIF) in May 2018, along with the National Bank for Agriculture and Rural Development (NABARD). This fund is registered under the Pradhan Mantri Krishi Sinchayee Yojna (PMKSY), which was formulated on July 1, 2015. The primary objective of the scheme is to promote micro-irrigation technologies, primarily among consuming crops, like cotton and sugarcane. Furthermore, it is focusing on expanding the coverage of field crops under micro-irrigation technologies. Moreover, the central government offered a 35% to 45% subsidy for drip irrigation systems. It is estimated that there is a high adoption rate of irrigation machinery in agriculture during the forecast period which is assisted by governments' support by providing subsidies to purchase advanced technologies. The GST applicable to irrigation machinery has also been reduced from 18% to 12%. This is expected to strengthen the market.
Water Scarcity Concern
The advent of mechanization has made farmers dependent on various sources for irrigation. However, mechanization in agriculture has moved well past tractors, to encompass every aspect of the crop production cycle. Farm mechanization not only increases productivity and yield per hectare, but it also helps to reduce the water consumption per farm. However, in the current agricultural scenario water scarcity has been a major challenge in India and is, thereby, a critical driver for the use of micro-irrigation machinery systems. India faces typical water issues, primarily due to population growth and lack of availability of quality water.
Fragmented land requires a controlled amount of quality water, to be equally distributed where the irrigation system proves to be fruitful. Incentives from the government in the form of increased budgetary allocations to the farmers, reduction of basic customs duty for the irrigation machinery manufacturers played a vital role in driving the growth of the irrigation machinery market in India. Though irrigated land is twice productive than the rain-fed land, most of the farmers have very small holdings where they cannot afford any sophisticated irrigation machineries.
The Indian Agricultural Research Institute (IARI) established the design of a micro-irrigation system (DOMIS), a web-based application system that helps in designing customized micro-irrigation systems for efficient water utilization, under several agro-climatic conditions. Owing to recurring droughts in 2012, 2015, and 2016, micro-irrigation systems gained immense popularity. Therefore, both central and state governments are promoting micro-irrigation systems, in order to tackle the water crisis which both the Drip as well as Sprinkler irrigation resolves.
The market share analysis indicates that the market studied is consolidated, with major companies accounting for about majority of the market share. With the governments’ thrust on augmenting the penetration of water conservation and efficiency driven by the micro-irrigation system, the market is estimated to witness substantial growth in the near future. This is expected to benefit companies, such as Jain Irrigation Systems Limited, EPC Industries Ltd, and Netafim Ltd, among others. In the Indian agricultural machinery market, partnerships, investment, and expansion were the most preferred strategies from the last five years.
In December 2018, Netafim has introduced ‘NetBeat’, a technology solution to help Indian farmers grow more food with fewer resources. This technology solution helps both large scale and small-scale farmers in organizing irrigation digitally by combining irrigation and fertigation control, monitoring and management. In September 2018, Jain Irrigation has acquired ETwater, one of the innovators of intelligent irrigation technology and in the vanguard for the creation of the smart irrigation controller. In September 2017, Avanijal Agri Automation Pvt. Ltd., has partnered with IBM that helps in uploading the data on to their server and use its Watson IoT platform to conduct the analysis.
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