India is home to second largest agricultural land in the world, with close to fifty-eight percent of the population directly engaged in agriculture as their primary source of employment. It is already among top fifteen agricultural exporters in the world and the government is aiming to achieve an export target of $60 billion by 2022. Towards this vision, the government has allocated a significant fraction of its annual union budget (2018-19) for undertaking multiple projects in agriculture, including projects to irrigate nearly 20 million hectares of land.
However, the adoption of technology has not been widespread and this presents a strategic area of cooperation between Israeli agri-tech companies and Indian agricultural distributors. Israel is a booming hub for agricultural startups with more 400 companies active in the sector, according to Startup Nation Central, a non-profit organization mapping the innovation ecosystem in Israel. In 2017, Israeli agri-tech sector raised about $141 million, an increase of 45 percent from the previous year. At the governmental level, India and Israel are cooperating in the form of India-Israel Agricultural Project by imparting capacity building programs throughout India, with the help of Israel’s external aid agency, MASHAV.
However, there is a pressing need of Israeli private companies and startups to collaborate with Indian partners and distributors to bring advanced agricultural technologies in India. Recently, an Israeli greenhouse company, Top Greenhouses and an Indian agricultural support company, EPC Mahindra have agreed to set up a new agricultural joint venture in India. EPC Mahindra is a wholly-owned subsidiary of Mahindra Group, one of the largest business conglomerates in India active in nearly twenty key industries. EPC Mahindra is a pioneer of micro-irrigation systems in India and provides various solutions relating to irrigation and agronomic support across India. On the other hand, Top Greenhouses is one of the leading Israeli protected agriculture service providers with clients in over hundred countries. According to a filing before Bombay Stock Exchange (BSE), EPC will hold sixty percent while Top Greenhouses will hold the rest. According to a 2011 policy, up to 100 percent foreign investment is permitted in agricultural sector in India.
The new venture would prove to be a boon for Indian farming system which has been plagued by unpredictable and erratic weather conditions. According to Benjamin Grossman, a partner and head of India practice at APM Law and Co., who solicited for Top in the joint venture, “The idea is to bring individually tailored protected agricultural solutions to not just large players but also to small farmers. Top Greenhouses will provide the know-how and EPC Mahindra will help with the market and local network”. With a large number of Israeli companies having the right expertise to tackle the concerns in Indian agricultural sector, this deal will serve as a right model for other such successful joint ventures between Indian and Israeli partners, Grossman added.