What Role Does Agriculture Play In India’s Economy?

Agriculture plays a vital role in boosting the Indian economy. In fact, agriculture contributes around 17 percent of the total GDP in India. The vast sector employs over sixty percent of the Indian population. As a matter of fact, over 70% of the rural population in India is dependent on farming for a living. Agriculture in India plays an essential role as 43% of the total geographical area is agricultural land. Food grains, pulses, fruits, vegetables, oilseeds, cotton, and jute, are some of the agricultural crops cultivated in India. Moreover, these are the agricultural products which export to other countries for revenue generation.

Agriculture Generates Employment

The Crucial Role Of Agriculture In The Indian Economy
The Crucial Role Of Agriculture In The Indian Economy
  • According to the estimation, agriculture is the prime income source of two-thirds of the population in India.
  • Different agricultural sectors like agricultural input, processing, and marketing sector contribute to employment in the country.
  • Besides, agriculture in India contributes immensely towards employment generation.

Feeds The Rapidly Growing Population

The Indian population is overgrowing, which is ultimately increasing the demand for food. So, the increase in per capita income is lower if you will compare with the population growth. The need for food is rising. The production of excess food grains can feed the growing population. Besides, food scarcity eliminates in the country.

As a matter of fact, the surplus food grains are feeding the rapidly growing population without a food crisis in the country.

Agriculture In India Contribution To Capital Formation

Capital formation is essential in developing countries like India. Agriculture is the largest contributing industry in the country. Furthermore, surplus extraction is through agriculture in India.

The Crucial Role Of Agriculture In The Indian Economy
The Crucial Role Of Agriculture In The Indian Economy)

Agriculture in India Is A Massive Market For Industrial Products

  • In detail, agriculture helps in enhancing the purchasing power of the rural population. So, the agricultural market now is an active market for industrial products.
  • Furthermore, in India, two-thirds of the population lives in rural area.
  • After the green revolution, the large farmers in the rural area are able to lead a better lifestyle. Moreover, it increases the purchasing power of the people of the rural area.

It Influences External And Internal Trade

  • Availability of agricultural land in the country makes many people adopt agriculture as their source of income.
  • Food grains like rice, wheat, millet are produced mostly in India. As a matter of fact, it encourages internal trading of agricultural products.
  • Other agricultural products like cotton, jute, and oilseeds have massive demand in foreign countries. The production of these crops encourages external trading. Besides, it is an excellent way of revenue generation.

Agriculture In India Provides Raw Material For The Processing Industry

  • The small, medium, and large food processing industries are emerging in India rapidly. Crops acquire the raw material for those agro-input and food processing industries.
  • Textile industries use jute and cotton as raw material. In processing industry crops is the key ingredient to process.
  • Many sectors in India are dependent on agriculture for the raw material.


Agriculture in India is an integral part as it is rooted in the Indian culture. Besides, most of the rural population adopt farming as a family tradition. Agriculture helps in increasing the per capita income in the country. It boosts the total economy of the country. There is massive scope for development and revenue generation in the Indian agricultural sector.

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