The seed industry of the country is going to align with the changing food consumption scenario of the country. There has been a decline in the proportion of expenditure on food items in the last three decades. The future seed market of the country is expected to witness more adoption of hybrid seeds. The country is going to witness an increase in the cultivation of vegetables and fruits, driven by the growth and development of the food processing sector along with changing consumption habit of the people. The export sector is also set to witness growth.
India’s market share in the global seed market in 2018
The growing demand for grains, oils, and vegetables is a significant driver for the seeds market. Grains represent the biggest portion of daily calorie intake in developing countries of the Middle East & Africa, Asia/Oceania, and CIS, and therefore, the demand for grains will be one of the most critical stimulants for the seed market.
The shift in farming practices worldwide has necessitated the adoption of commercially produced enhanced seed varieties by the farmers as opposed to using seeds from the last harvest. High yield, improved nutritional quality, reduced crop damage, disease resistance, etc. motivated farmers in investing in commercial seeds.
Besides these, acceptance of area under genetically modified crops, increasing demand for animal feed, rapid adoption of biotech crops and decreasing per capita farmland are contributing to the growth of seed market. On the other hand factors like rising concerns over GM seeds, years involved in development of new traits and long GM approval timelines and government regulation have been holding the sector back.
The profile of seeds in India has changed over the years. Earlier, it was the seeds saved from the previous crop that was used in Indian agriculture. Now it is the most advanced seeds developed by seed companies that dominate the farmers’ fields. The phenomenon has roots in the changing dynamics of agriculture, not only in India but also worldwide.
In 2018, the Indian seeds market reached a value of US$ 4.1 Billion, registering a CAGR of 15.7% during 2011- 2018. It is further expected to grow at a CAGR of 13.6% during 2019-2024, reaching a value of US$ 9.1 Billion by 2024. Coupled with increasing domestic demand and demand for quality seeds in various foreign countries, mainly the South East Asian countries, seed industry in India is witnessing new paradigms of growth and development.
The use of hybrid seeds has silently but consistently witnessed growth along with several other driving factors like the increasing middle class and increasing disposable income, growth in the food processing sector, increasing seed replacement ratio and other allied factors. Rising awareness among the farmers related to the benefits of using certified/ quality seeds has led to an increase in the demand for seeds over the past few years.
Being agriculture-based country; India is probably best placed to cater to not only domestic but also global seed requirements. Its importance is also reflected by its overall position in the global seed trade. In the case of fruits and vegetables, India ranks number 16 in the global fruits and vegetable seed exports with only 1.68% share of the global trade in 2014-15. Although there is a substantial increase in India's export of fruits and vegetable seeds in value, India has already started to lose a large share of such exports over the past few years.
However, India's imports of the fruits and vegetable seeds have depicted a declining trend in 2016, when compared to 2015. This decline is reflected not only in quantity but also in value terms. The major countries exporting fruits and vegetable seeds to India in 2016 included Thailand, Egypt, Chile, United States and China, accounting 64% of the total imports of fruits and vegetable seeds, amounting to Rs.4.16 billion in India.
The Indian seeds market is anticipated to grow at a considerable CAGR rate due to improvement of seed replacement rate, production and distribution of quality seeds appropriate to the agro-climatic zone at affordable prices along with a determined effort to address region-specific constraints. Moreover, several factors, including increased subsidies and renewed government thrust on the use of high yielding varieties, will lead to increased productivity in the seed market. The total export of fruit and vegetable seeds in 2018-19 was valued at Rs. 84927 lakhs.
The Indian seed industry has seen stupendous growth in recent times. India’s need to etch a remarkable agriculture story has fuelled this growth. Conducive policy reforms and government support have spurred the transformation of this industry in recent times. Many regional and multinational players have captured the scene and today the private sector is a formidable presence in India. The private sector has played a major role in changing India’s seed sector. Investment and technical expertise garnered from different parts of the world has made this fete possible policy
Initiatives in Seed Sector