Challenges hindering the growth of agri-startups in Telangana: A constraint analysis

Introduction

A startup is defined as a newly established enterprise, typically in its nascent operational stages, engineered to develop unique, innovative products or services aimed at market disruption and rapid scalability (Startup Indian, 2021) [23] . In the context of India, agriculture serves as the socio-economic bedrock of the nation. It not only contributes approximately 18% to the national Gross Domestic Product (GDP) but also functions as a primary employment generator, accounting for 12.91% of the workforce within the organized manufacturing sector (MoFPI, 2025) [12] . Driven by an ongoing Agri-Tech revolution, the sector is undergoing a profound structural paradigm shift, transforming from traditional subsistence farming into a high-value, market-led business ecosystem. This technological evolution is underscored by the recognition of over 6,000 agricultural startups and 2,800 specialized Agri-Tech ventures by the Department for Promotion of Industry and Internal Trade (DPIIT) (Startup India, 2023) [24] . Globally, India accounts for roughly 7.5% of total agricultural production, positioning it as a critical pillar for global food and nutritional security (FAO, 2023) [6] . Within this matrix, agricultural startups play a pivotal role in mitigating hunger and strengthening food security networks. Through integration with the food processing industry, these ventures optimize value addition, process agricultural surpluses, extend shelf life, and stabilize supply chains to ensure food availability across diverse regions at affordable prices. Beyond processing, agri-based startups have generated substantial economic opportunities, yielding approximately 33,400 direct and 70,700 indirect jobs (Anand et al., 2025) [1] , while overall recognized startup frameworks have contributed to the creation of over 12 lakh jobs nationally (Ministry of Finance, 2024) [11] . Furthermore, these enterprises enhance the market bargaining power of smallholder farmers and stimulate downstream economic activity across the secondary and tertiary sectors.

At the sub-national level, Telangana has emerged as a pioneer in fostering entrepreneurial growth. The state launched its comprehensive 'Innovation Policy' in 2016, designed to leverage its favorable demographic dividend and pool of skilled technology and research professionals (Startup Telangana, 2016). The policy establishes a conducive environment for institutional innovation, risk-taking, and statewide entrepreneurship. Utilizing a highly unique structural model, Telangana has cultivated a robust startup ecosystem to transition toward an innovation-driven economy. Consequently, it is recognized as one of India's top-performing startup states, housing 526 dedicated agri-startups (Startup India, 2021) [23] . Several studies identified the constraints experienced by the stakeholders of the agri-startups, such as inadequate training (Sindhu, 2015; Bhaskar, 2018) [20,3] , lack of efficient managers (Kumar, 2016) [8] , non-availability of input materials (Raju, 2017) [17] , shortage of labor (Shivacharan et al., 2017) [19] , lack of training about scientific production technology (Pal, 2018) [14] , less support by Government (Manohar, 2019; Kumar, 2022) [, 8] , lack of funds (Swathi, 2019; Bhooshan and Kumar, 2020; Divya, 2023; Devi, 2023) [, 4, 5, ] , non-availability of information regarding technical guidelines (Pal, 2018; Jatav et al., 2023; Priyanka and Gurupandi, 2026) [14,7,16] , inadequate incentives provided by Government (Aneesha, 2021; Reddy, 2023) [2,18] , inefficient supply chain (Srishailam et al., 2022; Venu et al., 2025) [22,25] ; limited access to technology (Nair and Raj, 2024) [13] ; inappropriate marketing (Singh et al., 2025) [21] .

Statement of the Problem

Agri-startups offer pertinent, original, and scalable solutions to deeply entrenched challenges across the entire agricultural value chain. By bridging critical operational gaps among smallholder farmers, input dealers, wholesalers, retailers, and end consumers, these ventures establish reliable market linkages and deliver high-quality inputs in a timely manner. However, despite their transformative potential, these entrepreneurs navigate a highly volatile and capital-intensive ecosystem (MANAGE, 2021) [10] . To devise targeted strategies that can fortify this landscape, it is imperative to empirically investigate and comprehend the multifaceted constraints experienced by the diverse stakeholders within the agri-startup ecosystem.

Methodology

The present study was conducted in Telangana state of India. It was purposively selected for the present study due to its success in agri startup, which is mainly due to their unique 'Triple Helix' model involving Government, Academic and Industry. While, to examine the constraints experienced by the stakeholders of agri-startup ecosystem, 64 agri-startup entrepreneurs were selected for the present study. Various constraints experienced by the stakeholders were identified and studied as financial, technological, marketing, establishment related and personal constraints. The stakeholders were requested to assign rank to the constraints based on their experience and analysis was carried out as per Henry Garret Ranking technique. In Garret ranking technique, the rank given by the entrepreneurs were converted into percent position by using the formula Where Rij= Ranking given to the ith attribute by the jth individual Nj = Number of attributes ranked by the jth individual Then for the calculated value using the Garrett ranking conversion table, the Garrett score was found. The Garrett score was multiplied with the ranks given by the entrepreneurs for each factor. The average of each factor was taken and ranking was done. By employing the above methodology, the major findings were given as follows.

Results and Discussion

Constraints experienced by the agri-startup entrepreneurs

The constraints experienced by the agri-startup entrepreneurs under five dimensions such as financial, personal, physical, technological and establishment related constraints were studied and presented as follows.

Financial constraints

Financial constraints helps to identify financial pressures experienced by the startups. The various financial constraints experienced by the agri-startup entrepreneurs were presented in Table .1

Technological constraints

Since technological constraints emphasizes the applications of agri-startup rather than theoretical aspects, understanding technological constraints helps to prevent high technology abandonment rate, promote infrastructural and operational realities. In this regard, the technological constraints experienced by the agri-startup entrepreneurs were studied and presented in Table 2.

Marketing constraints

Understanding marketing constraints helps identify the specific barriers experienced by entrepreneurs in reaching their endusers. Consequently, the marketing constraints experienced by them was studied and presented in Table .3. level of knowledge about marketing strategies. In addition, it was observed that lack of real-time market intelligence and reliable information databases forces ventures to operate blindly across highly fragmented, unpredictable rural distribution networks. Eventually, the low prioritization of non-remunerative pricing and initial low consumer trust underscores that target farmers and end-consumers are willing to adopt new startup offerings, provided the entrepreneur possesses the strategic capacity to navigate the supply chain and reach them

Establishment related constraints

Examining establishment-related constraints provides critical insights into the foundational, institutional, regulatory, and licensing bottlenecks encountered by early-stage agri-startups.

To evaluate these dynamics, the empirical data was systematically analysed and is presented in Table 4.

Personal constraints

Studying personal constraints helps to identify the psychological, social and capability related problems experienced by the agri-startup entrepreneurs that influences their strategic decision making and business survival. In this regard, personal constraints of the agri-startup entrepreneurs were studied and presented in Table .5. It could be understood that personal constraints among agristartup entrepreneurs are dominated by perceived fund-raising vulnerabilities and human capital deficits rather than family friction or team dynamics. Since griculture is a high-risk, weather-dependent, and long-gestation sector, entrepreneurs experience heightened anxiety regarding their personal capacity to secure capital from traditionally risk-averse investment networks. In addition, founders often possess strong technical agronomic knowledge, they suffer from a self-perceived deficit in business negotiation, pitch-deck creation, and strategic management skills. This educational gap naturally suppresses their confidence, leading to a moderately high concern over low innovation capacity and a limited risk-bearing ability due to the fear of compounding financial liability in an unpredictable market.

Conclusion

As agricultural enterprises are intrinsically bound to seasonal production cycles and unpredictable weather conditions, coupled with a growing consumer awareness toward environmental sustainability, there is an imperative need to accelerate the development of food processing industries and agri-tech startups. Ultimately, the empirical findings demonstrate that agri-startups do not fail in isolation; rather, they are restricted by an uncoordinated ecosystem where technical innovation is severely decoupled from financial governance, regulatory ease, and strategic market execution. To transition the agricultural landscape from traditional subsistence farming into a resilient, innovation-driven economy, the state of Telangana can implement targeted interventions-such as introducing blended finance alongside patient capital instruments, building localized public-private testing and validation laboratories, establishing a single-window regulatory clearance platform, and facilitating product quality governance paired with digital market linkagesto fundamentally strengthen agri-tech startups within their broader operational ecosystem.

Acknowledgement

AcknowledgementThe authors of this research study are thankful and acknowledging the help, support and co-operation from faculty from PJTAU, Ag-Hub, T-Hub, a-IDEA NAARM, CIA MANAGE.

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