Agro based industries in India

Industries that have agricultural produce as raw materials are known as Agro-based
Industries. These are consumer-based industries. Cotton, jute, silk, woollen textiles, sugar and
edible oil, etc. industry are based on agricultural raw materials.

What is the importance of textile industry in the economy of the country?

The textile industry occupies unique position in the Indian economy , because it
contributes significantly to industrial production ( 14%), Employment generation (35
million persons directly - search the second largest after agriculture) and foreign
exchange earnings about ( 20 4.6 % ) .05-Feb-2018

he textile industry is the second-largest employment generator in India after agriculture. It

provides direct employment to over 35 million people in the country. The textile sector is also one
of the largest contributors to India’s exports with a share of about 13 per cent.

Textile industry
The textile industry occupies unique position in the Indian economy, because it
contributes significantly to industrial production (14 per cent), employment
generation (35 million persons directly – the second largest after agriculture) and
foreign exchange earnings (about 24.6 per cent). It contributes 4 per cent towards
GDP. It is the only industry in the country, which is self-reliant and complete in the
value chain i.e., from raw material to the highest value added products.

Role in Indian economy

:The exports play a significant role in the Indian economy. The sector contributes around two
per cent of the country’s GDP and is one of the largest employers in the country. The industry is
also one of the largest contributors to India’s export earnings.

What Do You Mean By Agro-Based Industry?

Agro-based industries or agro-processing industries, are those that derive their raw materials
primarily from the agricultural sector and supply necessities to this industry.
Mainly, these industries are handling work related to processing, transforming, and adding value
to agricultural products so that they turn into various finished goods that are ready to deliver.

For any nation's agro-industry, agro-based industries play a vital role as they bridge the gap
between primary agricultural production and the final consumer market.

Agro-based industries encompass a wide range of sectors, including food processing, textiles,
biofuels, animal feed, dairy products, beverages, spices, and more. These industries utilize raw
materials such as crops, livestock, fruits, vegetables, grains, fibers, and other agricultural
commodities as their primary inputs.

The objective of agro-based industries is to enhance the value, quality, and marketability of
agricultural products through processing, preservation, packaging, and value addition. They
often employ advanced technologies, machinery, and expertise to transform raw agricultural
materials into finished goods that are ready for consumption or use in other industries.

List of Top 10 Agro-Based Industriest in 2023

1- Textile Industry

2- Industry of Food Processing

3- Industry of Dairy

4- Industry of Sugar

5- Industry of Vegetable Oil

6- Industry of Tea

7- Industry of Coffee
8- Industry of Leather Goods

9- Industry of Bamboo

10- Industry of Jute

The textile industry is responsible for the design, manufacture, distribution, and marketing of
yarn, textiles, and ready-to-wear garments. Cotton textiles, woolen textiles, silk textiles, synthetic
fibers, and jute textiles are all produced here.

This agro-based business is India's second-largest employment generator, after agriculture.

Hence, it plays a vital part in the country's economy.
India's textile industry is the country's largest agro-based sector. Garment production is the
focus of this sector. It is a self-sufficient industry that manufactures everything from raw
materials to finished value-added products for its customers.

Cotton is the world's most important natural fibre. In the year 2007, the global yield was 25
million tons from 35 million hectares cultivated in more than 50 countries.[1] There are five stages
of cotton manufacturing:[2]

• Cultivating and Harvesting

• Preparatory Processes
• Spinning — giving yarn
• Weaving — giving fabrics[a]
• Finishing — giving textiles
•
• TEXTILE INDUSTRY

o The textile industry is concerned with the design, production, distribution

or marketing of yarn, fabrics, or ready made clothing. It consists of units
manufacturing cotton textiles, woollen textiles, silk textiles, synthetic
fibers and jute textiles.
o The industry plays an important role in India’s economy because it is the
biggest employer in the country after agriculture. Also, it provides direct
and indirect employment to around 10.5 crore people.
o India is also the second-largest manufacturer and exporter of textiles
and clothing in the world, with a share of 5% of the total global trade. It
contributed 12% to India’s total exports in 2018-19.
o The US and the European Union are the two largest markets for Indian
textile exporters, followed by various Asian countries and the Middle
East.
 o The size of India’s textile and apparel market was USD 108.5 billion in
2015 and is expected to reach USD 226 billion by 2023, growing at a
CAGR of 8.7% between 2009 and 2023.
o The Union Government has introduced various policy initiatives and
programmes for the development of the textile industry, some of which
include
▪ Scheme for integrated textile parks,
▪ National Handicraft Development Program (NHDP),
▪ North Eastern Region Textile Promotion Scheme (NERTPS) and
▪ Comprehensive Handicrafts Cluster Development Scheme
(CHCDS).
•

India's cotton industry

India is one of the largest cotton textile manufacturing countries in the world. It is a major
industry in India as it directly or indirectly supports more than 40 percent of the country's
labour force. This industry is divided into the handloom and powerloom sectors. The most
important cotton mills in powerloom are located in Maharashtra, Gujarat and Tamil Nadu.
Handloom industry is located in every Indian state, however small it maybe.

India's main cotton manufacturing centres

Maharashtra and Gujarat are the foremost cotton textile manufacturing states. In these states,
Mumbai and Ahmedabad contribute about 50 percent of the total installed looms and nearly
half of India's cotton mill cloth. Mumbai is called the 'cottonpolis' of India. It is also known as
the Lancashire of India. Ahmedabad, being the second largest cotton manufacturing city in
India is referred to as 'Manchester of India

Problems of cotton textile industry

The cotton textile industry suffers from the following problems:

i) Shortage of raw material: We have shortage of raw material, particularly long staple cotton
which is imported from Pakistan, Uganda, USA, etc.
ii) Sick industrial units: These sick units require heavy financial investments for replacement
and modernisation purposes. Many of these units have been taken over by the government.
iii) Loss of foreign markets: This is because of continued increase in the cost of production and
the development of cotton textile industry in a number of Asian countries like China and
Japan and African countries.
iv) Inadequate production: This is because of the lack of adequate and unfailing power supply
and also because of competition with the decentralised sector.
v) Shortage of power: Supplies of coal are difficult to obtain and frequent cuts in electricity
and load shedding affect the industry badly.
vi) Obsolete machinery: In India, over 60 percent of the spindles are more than 30 years old.
Obsolete machinery results in low output and poor quality of goods because of which we are
not able to face competition in the international market.

Textile Industry
Textile Industry

The largest agro-based industry in India is the textile sector. This industry is mostly
focused on producing clothes. It is a self-sufficient industry that produces everything
for its customers, from raw materials to completed goods with value-added
products.19

Importance of agro based industries in india

Why are Agro-Based Industries Needed?

• Helps in the upliftment of the rural economy.

• Proper utilization and achieving the potential of the rural economy sector,
where plenty of raw materials are available.
• Provide rural populations with an opportunity for employment.
• Generate income and thereby improve the economic condition of people –
which in turn creates the potential for demand-based industries.
• Provide an opportunity for the dispersal of industries instead of concentrating
at a particular place.
• Solve the problem of exploitation of the farming community by traders and
middlemen.
• Farmers could be assured of better prices for their produce.
• Encourage bringing more and more areas under various crops – increase
agricultural production and improve the nation’s economy.
• The transportation cost of agricultural products can be minimized – thereby
helping to minimize the cost of finished goods.
• Avoid wastage of perishable agricultural products.
• Help to develop backward areas based on their suitability for setting up agro-
industries.
• Prevent migration of people from rural to urban areas.
• To encourage balanced growth between agriculture and industry.
Limiotations of agro based industry in india

What are the Challenges in Establishing Agro-Based

Industries?

• Proper guidance is not available to entrepreneurs.

• It involves some element of risk-taking
• Change in crops/cropping pattern
• Change in variety of crop due to technological improvement
• Failure of monsoon may hit the raw material supply.
• The multiplicity of agricultural produce and the absence of suitable
methodology to select the best-suited industries to a given region.
• Seasonal supply of agricultural produce may result in underutilization of
capacity of the units as the unit will not be working throughout the year.
• Industries based on fruits and vegetables may not get the same variety
throughout the year, but they may get some other variety.
• Uncertainty about future market demands.
• Absence of information about quantity and quality of the market.
• Absence of proper integration among the various agencies of development in
the district.
• Proper guidance, training for modern and sophisticated agro-industries are
not available.
• As modern small industries are capital intensive, the supply of finance will be a
considerable problem.
• Promotional activities such as conducting intensive campaigns, identifying
industries and explaining to entrepreneurs about prospects are inadequate.
•

PROBLEMS FACED BY AGRO-BASED INDUSTRIES IN INDIA:

▪ Small Landholdings:
▪ Small landholdings make it difficult for farmers to achieve economies of scale
because of which farmers are forced to rely on subsistence farming.
▪ Perishable nature of products:
▪ Agricultural products are perishable in nature because of which they require
huge infrastructure in the form of cold storage, excellent road connectivity.
India suffers on both accounts, forward and backward linkages.
▪ Seasonal nature:
▪ This means that the farmers have a very small window to reap the benefits of
their hard labor. In recent times, climate change has affected weather patterns
because of which there has been an adverse effect on agricultural production.
▪ Competition:
 ▪ India is increasingly facing competition from other countries in the region such
as Bangladesh, which offer similar advantages in terms of low labor costs and
soil fertility.
▪ Limited Knowledge:
▪ The absence of information, lack of awareness and limited knowledge about
opportunities, technology and production systems is also a major hurdle.
▪ Variability:
▪ Agro-based industries involve variability in the quantity and quality of raw
materials. Quantity of raw materials suffer because of fluctuations in weather
and soil conditions. The quality suffers because of lack of standardization.
These factors, exert additional pressure on agro-based industries in terms of
operations related to production, scheduling and quality control.