India investors look to agricultural sector
India's unreformed agricultural sector is one of the country's greatest investment opportunities, according to business leaders and politicians speaking at the Financial News India Investors' Summit in London today.
Alan Rosling, executive director of Tata Sons, told delegates: "Agriculture is the biggest unreformed sector in the economy. We believe this is a huge business opportunity."
Tata is involved in the sector through Tata Tea and Tata Chemical, which is a supplier to farmers. Tata has a capital expenditure plan of $30bn to invest in India, across all sectors, said Rosling.
Abhishek Singhvi, MP and spokesperson of the Indian National Congress Party said there was huge demand for a system that regulated food prices in India.
He said: "It's not merely a question of irrigated area, or average sized holdings. The problem is more deep-seated." He pointed to India having more irrigated land than the US, and the average land holding being larger than that in China.
Gross domestic product growth in India is more than two times that in the agricultural sector, he said, which puts the country's long-term potential into perspective.
Infrastructure investors are also looking to develop the sector. Ashesh Shah, global head of corporate development, Trikona Capital pointed to the $7.3bn that is lost in food and vegetables each year and the 120 million tonnes of grain that is lost to rodents across the country, as large problems which could be mediated by investment in the country's infrastructure.
Furthermore, only small portion of food is processed in India, at 7%, compared with 88% in the UK and about 45% in the Philippines.
However, working with the local market place is vital in infrastructure investment. Shah said: "The social value matters. If you can't work with the community, you're going to be in trouble."
The full programme for the India Investors' Summit can be accessed here: http://www.efinancialnewsevents.com/iis/index.cfm?fuseaction=programme
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