New Delhi, Feb 28 – India’s agricultural water technology sector requires an investment of ₹500-600 crore to drive the widespread adoption of smart irrigation solutions, according to a recent report. The study, conducted by DCM Shriram on The Investment Mismatch in AgWater, underscores the urgency of funding as the country grapples with an escalating water crisis.
Despite agriculture consuming the largest share of India’s water resources, the sector struggles with inefficiencies and insufficient financial backing. Agriculture contributes 16% to the national GDP and employs 55% of the workforce, yet investments in AgWaterTech remain inadequate.
India currently has 70-100 active AgWaterTech startups, but many face the risk of shutting down due to funding challenges. The report identifies limited data availability, long gestation periods, and the dominance of small and marginal farmers as key deterrents for investors.
Urgent Call for Government and Private Investment
Ajay S Shriram, Chairman and Senior Managing Director of DCM Shriram and Director of DCM Shriram Foundation, stressed the criticality of addressing this issue. "Water is the most essential resource for agriculture. Given the severity of India’s water crisis, scaling holistic and modern solutions has become an urgent mission," he said.The report proposes a results-based financing model, calling for an immediate allocation of ₹50-60 crore over the next two years. Additionally, it advocates for government partnerships and enhanced distribution networks to facilitate the adoption of advanced water management solutions.
Drawing comparisons with the micro-irrigation sector—where government support played a pivotal role in scaling adoption—the report highlights the need for similar backing to ensure success in the AgWaterTech space.
Enhancing Water Efficiency for Small Farmers
With smallholder farmers comprising nearly 85% of India’s agricultural workforce, the push for efficient water management solutions is critical. "To shape the future of Indian agriculture, we need solutions that enhance water efficiency, improve productivity, and build long-term resilience for small farmers," said Kanishka Chatterjee, Director of The/Nudge Prize.The study also emphasizes the importance of standardized data collection to bridge funding gaps and attract investment in the sector.
The findings were unveiled at the conclusion of the AgWater Challenge Grand Finale, an 18-month initiative inviting AgTech innovators and agri-social entrepreneurs worldwide to develop scalable solutions for Indian smallholder farmers growing rice, wheat, sugarcane, or cotton.
With increasing pressure on water resources, the call for targeted investment and policy support has never been more urgent to secure a sustainable future for Indian agriculture.