How to Start an Agriculture Business & Secure Financing for It?

Starting an agriculture business in India is a promising venture, given the nation's deep-rooted connection with farming and the growing demand for food products. It is also one of India’s most important and valuable sectors as it contributes significantly to the country's GDP and employs a large part of the population.

However, establishing a successful agriculture business calls for thoughtful planning, knowledge base, and the right financial support. Whether you plan to grow crops, set up a dairy farm, or enter the food processing industry, securing the right financing is crucial to kickstart and sustain your business.

There are several types of agriculture businesses you can start, depending on your interests, expertise, and resources:

Crop Farming

Growing various food crops such as rice, wheat, vegetables, or fruits for the local and international markets.

Dairy Farming

Producing milk and dairy products like butter, cheese, and ghee. This can be a profitable venture in rural areas.

Poultry Farming

Raising chickens for egg production or meat. It requires low initial investment but can yield high returns.

Horticulture

Growing plants for food or ornamental purposes, including flowers, fruits, and vegetables.

Fish Farming (Aquaculture)

Cultivating fish in controlled environments such as ponds or tanks for consumption and sale.

Agro-processing

Involves processing raw agricultural products into consumable goods like jams, juices, pickles, and other packaged foods.

Greenhouse Farming

Growing plants in a controlled environment to extend the growing season or cultivate crops in non-conventional climates.

Starting an agriculture business requires a step-by-step approach, from planning to operations:

Research & Planning

Start by researching the agricultural industry, market demand, and possible competitors in your area. Write a business plan that outlines the business objectives, goals, target market, and financial projections.

Select Your Niche

Choose an agriculture business type that fits your skills, knowledge, and resources. This will depend on the local climate, land availability, and market demand.

Identify the Required Land and Infrastructure

Assess the land available to you and consider any specific requirements for setting up your agricultural business, such as irrigation, fencing, storage, or animal housing.

Get the Right Equipment

Invest in the necessary equipment to manage the farming or agricultural business, whether it's tractors, greenhouses, milking machines, or packaging tools.

Hire Skilled Labour

Depending on your business type, you can hire experienced farmhands, technicians, or other experts who understand the nuances of farming or agri-processing.

Develop a Marketing Strategy

Create a marketing plan to promote your products. This could involve selling locally, directly to consumers, or through wholesalers. Setting up an online presence could also help expand your reach.

To legally operate an agricultural business in India, certain registrations and licenses are required:

FSSAI Registration

For food businesses such as dairy or processed foods, obtaining a Food Safety and Standards Authority of India (FSSAI) registration is mandatory.

GST Registration

If your business turnover exceeds the prescribed threshold, registration for Goods and Services Tax (GST) is required.

Land Ownership Certificate

Ensure that you have clear documentation of land ownership or lease agreements for farming activities.

Pesticide and Fertiliser Licenses

If your business involves the sale or use of pesticides and fertilisers, you must obtain the relevant licenses as per Indian regulations.

Animal Husbandry Registration

For livestock-based businesses like poultry or dairy farming, animal husbandry registrations may be required.

Starting an agriculture business in India requires mindful financial planning. Investment needs depend on the type of crops or produce, scale of operations, equipment, and market reach. The city tier, availability of land, and cost of labour significantly influence overall capital requirements. The cost analysis below provides a structured estimate for Tier‑1, Tier‑2, and Tier‑3 cities.

Tier Classification and Cost Factors

• Tier 1 Cities: Cities like Delhi, Bengaluru, and Pune have higher land, labour, and operational costs, which increase initial investment for agriculture ventures.
  

• Tier 2 & Tier 3 Cities: Cities such as Jaipur, Patna, and Indore have lower land and labour costs, reducing overall capital needs for agricultural operations.

Disclaimer: These figures are indicative and meant for guidance only. Actual investment may vary depending on location, crop selection, and market conditions. Consulting experts is recommended before finalising budgets.

Agricultural businesses require careful financial planning to manage the upfront costs of land, equipment, labour, and raw materials. A strong financial plan ensures that the business can be sustained through seasonal fluctuations.

Securing financing is often essential to cover costs such as equipment, operational expenses, and initial working capital. Several government schemes and financial institutions offer loans for agriculture-based businesses, ensuring you can access the funds needed to get started.

A business loan for agriculture can help with:

Purchase of Land or Equipment

Use the loan to purchase land or acquire essential equipment such as tractors, irrigation systems, or greenhouse infrastructure.

Seed and Fertiliser Costs

Loans can help cover costs related to seeds, fertilisers, pesticides, and other agricultural inputs.

Infrastructure Development

Setting up storage facilities, warehouses, or processing units to streamline operations and increase output.

Working Capital

Loans can be used to manage day-to-day expenses, such as wages, raw materials, and marketing costs.

Here’s a quick comparison to help you find the right lender on Bajaj Markets based on interest rates and flexible repayment options:

Disclaimer: The interest rates, loan tenures, and offers listed are indicative and may vary based on lender discretion and applicant eligibility.

Before you apply for a business loan, have a look at the following criteria that you need to meet:

• Eligibility Criteria
  

  • Indian citizenship
    

  • Minimum 2 years of business operation
    

  • Age between 21 and 60 years
    

  • A good credit score (650+)
    

• Documents Required
  

  • Proof of identity (Aadhaar, PAN)
    

  • Proof of business (GST registration, partnership deed)
    

  • Bank statements for the last 6 months

  • Financial statements (Profit and Loss, Balance Sheet)

When planning to start an agriculture business in India, lenders assess both personal and business creditworthiness before approving a loan. A strong personal credit score, typically 700 or above, indicates consistent repayment behaviour and reduces perceived lending risk. This reassures banks and NBFCs that the borrower can manage loan obligations responsibly, increasing the likelihood of approval and potentially securing lower interest rates.

For registered agriculture businesses, lenders also evaluate the Company Credit Report (CCR). The CCR, issued by credit bureaus such as TransUnion CIBIL, reflects the company’s financial health, credit exposure, repayment trends, and existing liabilities. It also provides a CIBIL Rank from 1 to 10, with Rank 1 indicating the highest creditworthiness. A higher rank can improve loan eligibility and terms, including faster disbursal and more favourable interest rates.

Maintaining clean repayment records, timely compliance with statutory obligations, and responsible credit utilisation both personally and at the business level can significantly enhance the chances of loan approval. This assessment helps lenders gauge the overall financial strength of an agriculture business, ensuring the sustainability and growth of farming operations through structured financial support.

Applying for a business loan on Bajaj Markets is simple, fast, and entirely digital. Here are the steps you can follow to apply online:

• Step 1: Select the ‘CHECK ELIGIBILITY’ button on this page
  

• Step 2: Enter your personal and business information in the form
  

• Step 3: Pick a lender from the provided list
  

• Step 4: Select your preferred loan amount and repayment duration
  

• Step 5: Submit the application form for review

The Indian government offers several schemes to support SMEs (Small and Medium Enterprises) and MSMEs (Micro, Small, and Medium Enterprises) venturing into agriculture, providing financial aid, infrastructure support, and skill development. The table below highlights key central government initiatives that agriculture businesses can leverage to grow and sustain their operations:

Central Government Schemes for SMEs/MSMEs

State Government Schemes for SMEs or MSMEs

Disclaimer: These Central and State Government schemes may or may not be applicable to secure business funds for opening a car dealership in India. It is crucial to check the eligibility criteria and other terms and conditions of any scheme you are interested in before applying.

Starting an agriculture business in India can be highly profitable and rewarding. However, it requires careful planning, the right resources, and financing. Business loans play an essential role in ensuring the smooth operation of an agricultural venture. Bajaj Markets provides easy access to loans with flexible terms and competitive interest rates, making it easier for you to realise your agricultural business goals.