As India approaches the Union Budget 2026, agriculture remains both an economic mainstay and a policy stress test. The sector contributes close to 18 per cent of India’s Gross Value Added (GVA) and supports nearly half of the country’s workforce, even as public investment continues to rise. In Budget 2025–26, the Centre allocated over Rs 1.5 lakh crore to agriculture and allied activities, set an ambitious agricultural credit target of Rs 20 lakh crore, and sustained flagship schemes spanning farmer income support, irrigation, crop insurance and digital agriculture. Yet, with climate shocks intensifying, farm incomes remaining volatile and nutrition challenges persisting, stakeholders argue that Budget 2026 must go beyond continuity and signal a deeper structural transformation of India’s farm economy.
Smallholders at the Heart of Food Security
India’s agricultural future is inseparable from its smallholder farmers. Nearly 86 per cent of farmers cultivate less than two hectares of land, making them highly vulnerable to climate variability, market volatility and rising input costs. Crispino Lobo, Co-founder and Managing Trustee of WOTR, places smallholders squarely at the centre of budgetary priorities.
“As India prepares its Annual Fiscal Budget, it is important to remember that the future of our food systems rests largely in the hands of smallholder farmers, men and women who cultivate less than two hectares of land, yet carry a disproportionate share of climate, market, and economic risk,” he says.
Lobo points to well-documented challenges: limited access to affordable credit, highly volatile farm incomes, increasing exposure to climate extremes, inadequate access to quality inputs and appropriate technologies, and persistent post-harvest losses due to weak rural infrastructure. For him, Budget 2026 must move decisively beyond short-term relief.
“A budget that truly serves smallholder farmers must therefore move beyond short-term relief and focus on long-term resilience,” Lobo says. “Investments in climate-adaptive agriculture, sustainable water security, precision farming technologies, farm-customised dynamic weather-based advisories, post-harvest loss-reducing technologies, and local value chains are no longer optional – they are essential. Equally important is strengthening institutional credit, risk-mitigation instruments such as effective crop insurance, and extension systems that place knowledge and technology in farmers’ hands.”
Climate Risks and Income Stability
These concerns echo across the agriculture value chain. Abhishek Wadekar, Founder Chairman of Tradelink International Private Limited, says expectations from Budget 2026 are shaped by mounting pressures on farmers.
“With the country moving towards the next Union Budget, there are quite a few expectations from the agriculture sector, which remains beleaguered by factors such as climate change, increasing cost of farm inputs, and fluctuating farm incomes,” he says.
Wadekar outlines a familiar but unresolved wishlist: better stability of farm incomes through schemes such as PM-KISAN, wider and more effective coverage of MSP, increased spending on irrigation, climate-smart agriculture practices, conservation of soil and water, and stronger support for allied sectors including dairy, fisheries and food processing. He also highlights the need for better rural credit access, digital agricultural advice, storage infrastructure and marketing platforms that allow farmers to sell produce without distress.
Reflecting on Budget 2025–26, Wadekar notes that while allocations for agricultural credit, infrastructure and digital farmer welfare schemes were continued, outcomes have been uneven. “Small and marginal farmers are still dealing with the challenges of weather risks, cost of farming, and the implementation of plans and schemes associated with agriculture,” he says. What the sector now awaits is faster implementation, stronger climate and risk-management support, and an explicit focus on farmer incomes to ensure long-term sustainability.
From Production to Markets and Exports
While India has largely secured foodgrain availability, experts argue that the next growth phase must be market-led. Ajay Kakra, Leader – Food and Agriculture at GIDAS, Forvis Mazars in India, believes Budget 2026 represents a pivotal moment.
“As India approaches Union Budget 2026, the agriculture sector stands at a decisive juncture,” Kakra says. “While food grain production has remained resilient, the next phase of growth must focus on export competitiveness, quality enhancement, large-scale programme execution, and innovation-led industry participation. Budget 2026 presents an opportunity to recalibrate agricultural policy from being production-centric to market-, quality-, and innovation-oriented.”
According to Kakra, export bottlenecks arise less from production capacity and more from infrastructure and institutional gaps. “Creating export-centric agri clusters, modern pack houses, port-linked cold chains, and a stable export policy framework would encourage long-term investments and reduce uncertainty for farmers and exporters,” he explains. Strengthening quality infrastructure—testing, certification, traceability and residue monitoring—is critical to accessing premium global markets and should be seen as a value-creation lever rather than a compliance burden.
He also calls for strengthening large-scale crop programmes such as pulses and oilseeds missions, while balancing food security through productivity enhancement, buffer management, climate-resilient crops and a robust public distribution system. “Greater convergence of trade facilitation, R&D, innovation, and agri-industry participation can ensure global integration translates into higher and more stable farm incomes,” Kakra adds.
Unlocking the Circular Bio-Economy
Beyond food production, agriculture is central to India’s climate and sustainability agenda. India generates over 500 million tonnes of crop residue annually, much of which is burned, contributing to air pollution and greenhouse gas emissions. Mahadev Chikkanna, Founder and CEO of MYNUSCo, sees Budget 2026 as a chance to mainstream the bio-economy.
“For the upcoming Union Budget 2026, we expect stronger policy support for bio-economy innovation and circular materials, especially incentives that encourage sustainable manufacturing, support farm waste utilisation, and catalyse the adoption of eco-friendly materials across consumer and industrial value chains,” he says.
Chikkanna notes that Budget 2025–26 emphasised sustainable growth through startup support mechanisms and MSME credit expansion, but targeted fiscal incentives for circular economy and bio-materials remain limited. “India produces over 500 million tonnes of crop waste annually, much of which is burned, contributing to pollution and greenhouse gas emissions. Transforming this waste into value-added materials can significantly reduce environmental impact,” he explains.
For Budget 2026, he urges inclusion of R&D tax credits for sustainable materials, export incentives for bio-based products and support for scaling bio-manufacturing infrastructure. “Such measures will unlock rural income opportunities, accelerate India’s transition from linear to circular materials, and strengthen the country’s leadership in climate-friendly innovation,” Chikkanna says.
Fertiliser Reform and Sustainable Inputs
Input sustainability remains another critical policy lever. Rajib Chokarborty, National President of the Soluble Fertiliser Industry Association, outlines a comprehensive reform agenda. Apart from a strategic 3D reform of the Fertilizer Control Order—Digitisation, Decriminalisation and Deregulation—he expects complementary interventions that support a modern and self-reliant fertiliser ecosystem.
Key expectations include promoting ‘Residue-Free, Nutrient-Rich’ farming as an integrated National Agriculture and Health Policy, recognising non-subsidised Soluble, Organic, Micro Nutrient and Stimulant (SOMS) fertilisers as strategic materials on par with Critical Minerals, and including indigenous input manufacturing under all Agriculture Development Funds.
Chokarborty also calls for mandating portfolios for waste-free ‘Green Technologies’ within NABARD and public funding institutions, faster operationalisation of the DST Research, Development & Innovation Fund, and reversal of accumulated GST input credits to improve working capital for domestic manufacturers and level the playing field against imports.
Biologicals and Reducing Import Dependence
The shift towards sustainable inputs is reinforced by Harsh Vardhan Bhagchandka, President of IPL Biologicals. He supports the government’s recent decision to reduce GST on biopesticides to 5 per cent.
“IPL Biological support the government’s decision to reduce GST on biopesticides to 5 percent, which is a positive step toward encouraging sustainable agricultural practices,” he says. “Ahead of Budget 2026, we urge focused incentives for balanced nutrient application through biological products, which can help reduce India’s dependence on chemical fertiliser imports and ease the long-term subsidy burden.”
Bhagchandka also recommends including the biological fertiliser industry under the Production Linked Incentive scheme to support domestic manufacturing, innovation and scalable adoption of sustainable agri-solutions.
Nutrition as the Next Agricultural Outcome
While yields and productivity have long dominated policy thinking, nutrition is emerging as the next frontier. Prateek Rastogi, CEO and Co-Founder of Better Nutrition, believes the focus must now shift decisively.
“Last year’s Budget clearly recognised agriculture as India’s first growth engine, with strong investments in productivity, seed innovation, and sustainable farming. That foundation is critical,” he says. “But India’s next leap must go beyond yield and move toward nutrition as an outcome.”
Rastogi argues that India’s challenge is not food availability but nutrient deficiency. “Today, we don’t suffer from a lack of food. We suffer from a lack of nutrients in our food,” he says. He calls for mainstreaming biofortified seeds and nutrition-focused agriculture as part of national policy, allowing micronutrient deficiencies to be addressed at the source through everyday staples.
“Supporting startups and farmer networks that grow, test and process nutrient-rich crops will not only improve public health but also create a higher-value market for farmers through better price realisation and assured demand,” he adds. A nutrition-led agricultural strategy, he believes, could deliver long-term food security, healthcare savings and rural prosperity.
Digital Agriculture and New Credit Frameworks
Technology is increasingly viewed as an enabler of resilience. Amith Agarwal, Co-founder and CEO of StarAgri, says the agritech sector approaches Budget 2026 with clear expectations.
“The agritech sector approaches this Union Budget with hope and clear expectations. Indian agriculture needs deeper digitisation, stronger technology adoption, and greater farmer participation online,” he says.
Agarwal calls for renewed momentum under the Digital Agriculture Mission, including support for agritech projects in AI-based crop monitoring, GPS-driven farm mapping and drone-enabled farming. He also urges the Finance Minister to establish an alternative rural credit framework that reflects farmers’ income realities. “Agri- and rural-focused NBFCs that specialise in farmer credit should receive differentiated ratings and enhanced lending limits,” he argues, noting that a uniform approach does not serve the agricultural economy.
Climate Intelligence and Capital for Agri Innovation
From an investment lens, Amit Maheshwari, Founding Investor and Strategic Advisor at KhetiBuddy, highlights climate-smart agriculture and traceability as strategic priorities.
“As India positions itself as a global food supplier, the 2026 Budget should recognize climate-smart agriculture and farm-level traceability as strategic investment themes,” he says. “Farm-level intelligence is essential for a stable foundation in supply-demand management, reducing post-harvest wastage and sourcing volatility.”
Maheshwari believes agri ERP and SaaS platforms can integrate data from the AgriStack to improve productivity, traceability and access to sustainable finance. While the removal of angel tax is a positive step, he stresses that further relief on capital gains tax for foreign investors will be crucial to unlocking long-term funding for scalable, sustainability-led agri innovations.
A Defining Moment for Budget 2026
Taken together, these voices underline a common theme: Budget 2026 must move agriculture policy from incrementalism to intent. Climate resilience, nutrition security, circular bio-economy, export competitiveness and digital integration are no longer parallel agendas—they are deeply interconnected pillars of a future-ready farm economy.
For India, the challenge is not merely feeding its population, but doing so sustainably, nutritiously and profitably for farmers. As climate risks intensify and global food systems evolve, the choices made in Union Budget 2026 could well determine whether Indian agriculture merely copes—or truly transforms. |
