India’s Evolving Seed BusinessMay 2015

India has a vibrant seed market. Over the years, the seed industry has evolved side by side with Indian agriculture. From the practice of saving seeds from the previous crop, Indian farmers have come a long way.

Today, the Indian seed industry is the fifth largest seed market in the world, accounting for 4.4% of global seed market. In terms of global trade, India is almost self-sufficient in flower, fruits and vegetables and field crops seeds.

The hybrid seed market has grown at a stupendous CAGR of 36.1 per cent over the period FY’2007-FY’2013. The contribution of varietal seeds to the overall commercial seed market in India has witnessed a steep decline from 72 per cent in FY’2007 to 36.8 per cent in FY’2013. In FY’2013, the non-vegetable seeds accounted for 82.2 per cent of the overall seed market in India. Non-vegetable seed market in India is largely concentrated in cotton, contributing the largest share of 40.8 per cent. Overall, paddy, maize and vegetables are expected to drive the growth of Indian hybrid seed industry in the next five years. It is expected that better rice hybrids will be developed to give yield advantage of at least 3-4 tonnes per hectare over the research varieties.

Seed industry’s excellent growth story is reflective of India’s own agriculture momentum. The government’s policy support has also gone a long way in supporting the seed industry’s evolution and development. From the Seed’s Act of 1966 to the Seed’s Bill 2004, India’s seed policy has been suggestive of India’s evolving needs and market dynamics.

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 private sector is a formidable presence in India. 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.

Private sector has its own agenda which is obviously profit oriented. So their investments are focussed on high value crops like cotton, maize, pearl millet, sorghum and horticulture crops where genetic improvements can be made in hybridbackgrounds. There are immense prospects for private investment in rice improvement in India. Rice is potentially of considerable interest to the private sector in the seed and agro-biotech industries. More than half of the rice seed planted in India in 2008-09 was purchased (rather than saved) by farmers, suggesting that farmers are willing to pay for quality seed. This opens the door for growth in the market for hybrid rice seed, even though only 6 percent of the rice area was planted to hybrids in 2008-09. Many companies have recognized this potential, and several are investing heavily in research and marketing to increase and stabilize yield, improve grain quality and enhance marketing and distribution networks.

There is also a need for more and higher-quality data on agro-biotech research in India to improve the efficiency and effectiveness of the regulatory system.

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