Economic status of agro-based industries in India and Gujarat

Introduction

India's agriculture sector has exhibited a tremendous growth in terms of production of food grain, horticulture product, milk products and fish production. India has 157.35 million hectares of agricultural land second largest in the world after the USA. As from the past decade there was a huge growth of food grain production from 265.04 million tonne in year 2013-14 to 328.4 million tonnes in 2023-24. The same trend was also observed in case of horticulture (353.19 million tonne), milk (239.3 million tonne) and fish product (184.02 lakh tonnes) in year 2023-24. The export revenue of agriculture products during year 2024 was 48.9 billion USD. India contributes around 20 per cent share in total milk production in the world. India is the second-largest producer of vegetables and fruits, with horticultural production estimated at 205 and 799 thousand tonnes in 2023-24 (Anon., 2024) [3] . India is also the second-largest producer of eggs and ranks fifth in meat production globally. Egg production has increased at a CAGR of 7.35 per cent annually, while meat production has grown by 4.3 per cent over the past eight years, up to 2022-23. Agriculture and allied activities' sector contributing 16 per cent to India's GDP for FY24' (PE) at current prices and supports about 46.1 per cent of the population (Anon., 2025) [4] . Indian Agrobased industries employ 56.5 Crores people and contribute Rs. 4,54,53,944 Lakhs GVA which is 20.69 per cent of all GVA by industries in India's GDP (Anon., 2023) [2] . The food processing industry was a largest sector of Agro-based industries represents 32 per cent of the total food market in India. It ranks th in terms of production, consumption and exports. It also contributes 8.80 per cent to the GVA in manufacturing and 8.39 per cent in agriculture and this sector also accounts for 13 per cent of India's exports and per cent of total industrial investment (Anon., 2024) [3] . Agro-based industries are the backbone of the Indian economy not only connect two crucial sectors of the economy but also provide vast employment opportunities, contribute significantly to GDP and export earnings. They stabilize agricultural income, reduce post-harvest losses and enhance product marketability, linking agriculture to consumers and driving sustainable development (Singh and Kaur, 2018) [7] . Despite infrastructural gaps, unstable trade, regional and environmental disturbance Agro-based industries strengthened value chains through policy reforms, technology adoption and public-private partnership which ensured sustainable development and diversifying the economic growth. Among the different classification considered for studying Agro-based industries, this study considers the NIC code based classification given in Table 1.

Results and Discussion

In terms of mean value of factories in operation, the highest value was registered by food product and beverage industries in India while in case of Gujarat state, the textile industries exhibited the highest mean value of 1950.2 in number with 13.8 per cent share of Indian textile industries followed by paper and rubber industries. The Gujarat state accounted for 8.8 per cent share of factories in operation of total Agro-based industries in India with mean value of 6664.4 in number. The net income generation by different Agrobased industries, the food products and beverage industries showed highest mean value followed by textile industries in India whereas for Gujarat state, the textile industries exhibited highest mean value with the share value of 21.1 per cent in India's net income from textile industries. The net profit, gross value added, employment and total output, the food product and beverage industries showed highest mean value in India whereas in Gujarat state textile industries exhibited the highest mean value of gross value added and employment however in case of net profit and total output the food and beverage industries displayed highest mean value. The contribution of Gujarat state in India's total Agro-based industries was 11.1 per cent in net income, 9.7 per cent in net profit, 11.8 per cent in gross value added, 10.8 per cent in employment and 13.8 per cent in total output (Table 2). Figure 1 illustrated the contribution of different Agro-based industries with percentage share value to the total Agro-based industries in India. In terms of factories in operation the food product and beverage industries exhibited the highest share with the value of 45 per cent followed by textiles industries. As for the net income, net profit, gross value added, employment and total output generation in India manufacture of food products and beverages industries exhibited the highest contribution with percentage share of 38, 42, 41, 35 and 55 per cent followed by textile, rubber and plastic product, textile, textile and textile industries, respectively. The food product and beverage industries of India exhibited a positive and significant growth of all parameters of study in which number of factories in operation and employment increased at the rate of 1.25 and 2.76 per cent per annum while the net income (7.79%/annum), net profit (10.30%/annum), gross value added (8.49%/annum) and total output (9.11%/annum) showed medium to high growth rate during 2012-13 to 2022-23. Reddy and Kumari (2014) [6] furnished similar results of different parameters of food and beverage producing industries in India during the study period 2006-to 2011-12 in that the employment, total output and net income increased at the rate of 1.32, 7.22 and 6.84 per cent, respectively. The tobacco product industries of India displayed negative but significant growth rate of factories in operation and employment whereas, the net income, net profit, gross value added and total output increased at the rate of 4.45, 4.74, 4.05 and 3.69 per cent per annum, respectively. The textiles industries exhibited negative but significant growth of factories in operation decreased at the rate of -1.12 per cent per annum. The net income (7.70%/annum) and net profit (9.15%/annum) of textile industries showed high growth while the employment (1.46%/annum) and total output (4.28%/annum) showed lower rate of growth (Table 3). The leather industries of India showed moderate growth performance of factories in operation, employment and total output increased at the rate of 0.51, 2.89 and 4.61 per cent per annum while the net income (9.48%/annum), net profit (8.20%/annum) and gross value added (7.84%/annum) showed medium growth rate. The manufacture of products of wood, cork, straw and planting materials, planning of wood industries of India showed nonsignificant growth performance of factories in operation while employment (2.62%/annum) illustrated lower growth rate. The net income, net profit, gross value added and total output of wood industries demonstrated medium to high growth rate. The paper and paper product industries showed tremendous growth of net profit increased at the rate of 29.91 per cent per annum whereas the factories in operation (1.28%/annum) and employment (4.24%/annum) displayed low growth rate. Indian paper industries also showed high and significant growth rate of net income, gross value added and total output increased at the rate of 16.30, 11.56 and 10.40 per cent per annum, respectively. The rubber and plastic product industries of India showed low growth of factories in operation while the net income, net profit, gross value added, employment and total output showed higher growth rate and the similar results also furnished by Kumudha (2023) [5] during the period from 2007-to 2021-22 showed that employment of rubber and plastic product industries of India increased at the rate of 7.32 per cent (Table 3). The total Agro-based industries of India recorded stable and significant growth rate in that the factories in operation and employment displayed lower growth value while the net income, net profit, gross value added and total output showed medium growth at the rate of 8.70, 8.80, 7.40 and 8.08 per cent per annum, respectively. The non-agro based industries have shown similar results with low growth performance of factories in operation and employment while the net income, net profit, gross value added and total output showed medium growth rate. In terms of total industries of India also similar trend was found in that the factories in operation and employment showed low growth value while the net income (8.20%/annum), net profit (7.29%/annum), gross value added (7.47%/annum) and total output (7.84%/annum) exhibited medium growth rate (Table 3). The Figure 2, represents the trend performance of different Agro-based industries in Gujarat during study period 2012-13 to 2022-23. The textile industries illustrated tremendous growth with highest trend value in most of the parameters of study from number of factories in operation to total output generation it showed highest value among all Agro-based industries. The food product and beverage industries and total Agro-based industries exhibited increasing trend of all paraments while the tobacco product industries revelled less stable trend and pick revenue generation was found in year 2016-17. The lower trend value was registered by leather industries in Gujarat while paper and rubber industries showed slow and persistent trend whereas the wood industries of Gujarat exhibited slightly increasing trend.

The manufacture of food product and beverage industries of Gujarat showed tremendous growth performance with high growth of net income, net profit, gross value added and total output increased at the rate of 14.50, 14.65, 13.45 and 12.24 per cent per annum while the factories in operation and employment only increased at the rate of 3.39 and 5.12 per cent per annum, respectively. The tobacco product industries of Gujarat displayed negative growth rate of factories in operation and employment decreased at the rate of -5.46 and -0.20 per cent per annum, respectively while net income, net profit, gross value added and total output showed positive and significant results. The net profit of textile industries of Gujarat showed higher growth performance, increased at the rate of 14.31 per cent per annum followed by net income, gross value added and total output at the rate of 11.85, 10.01 and 7.90 per cent per annum, respectively while the factories in operation and employment showed low growth rate. Gujarat's leather industries illustrated higher growth of factories in operation, employment and total output increased at the rate of 14.20, 13 and 17.58 per cent per annum, respectively displayed in Table 4.

References

1. Anonymous. National Industrial Classification. New Delhi, India: Ministry of Statistics and Programme Implementation; 2008.
2. Anonymous. Annule Survey of Industries report. New Delhi, India: Ministry of Statistics and Programme Implementation; 2023.
3. Anonymous. Food and food processing industry in India. Brickwork research; 2024. Available from:https://www.brickworkranking.com.Accessed 30 Mar 2026.
4. Anonymous. Ministry of Information, Government of India; 2025. Available from:https://www.pib.gov.in.Accessed 30 Mar 2026.
5. Kumudha A. Evolution of Agro-based industries in India. Bodhi International Journal of Research in Humanities, Arts and Science. 2023;8(1):71-75.
6. Reddy LK, Kumari SR. Performance of Agro-based industries in India: A critical analysis. IOSR Journal of Economics and Finance. 2014;2(4):15-25.
7. Singh R, Kaur J. Technological and labor challenges in Punjab's Agroindustries: Vocational training and technology adoption. Agricultural Engineering Review. 2018;11(3):158-176.