8 Barriers Hindering India's AgWater Revolution and How to Break Through

India’s agriculture sector is at a critical juncture, with it consuming nearly 90% of the country’s water, and is at a crossroads. Inefficiencies in irrigation and fragmented systems, over 30 million agricultural pumps and reliance on manual operations, underscore the need for transformation. AgWater technologies like irrigation automation and soil conditioning hold the potential to revolutionise farming by enhancing water-use efficiency, reducing costs, and boosting yields.

However, scaling these solutions to reach the 85% of farmers who are smallholders presents unique challenges. Issues of affordability, regional variation, and trust-building add layers of complexity. 

To address these complexities, the DCM Shriram AgWater Challenge - a collaborative initiative by The/Nudge Institute and the DCM SHRIRAM FOUNDATION , recently featured a workshop on “Scaling AgWater Technologies” led by Emmanuel Murray , Investment Director, Caspian. The session brought together four pioneering Indian AgWater startups - CultYvate , EF Polymer India , IndusTill FarmTech Pvt. Ltd. , and PhyFarm - to delve into these challenges and develop actionable strategies for scaling solutions effectively.

Breaking Down the Roadblocks

Product-Market Fit 

Over-engineered or overly complex tools often fail to gain traction. Innovations must be affordable, region-specific, and grounded in practical realities. Solutions must align with the diverse needs of Indian farmers. 

Scale and Complexity

Scaling AgWater technologies demands more than just geographic expansion, it requires adapting to varied agro-climatic conditions, socio-economic disparities among farmers, and region-specific farming practices. The hardware-driven nature of many innovations add a layer of complexities, from logistics and maintenance to cost considerations, making seamless scaling a formidable task.

The Capital Gap

Venture capital’s short-term outlook doesn’t suit the long gestation and infrastructure-heavy nature of AgWater solutions. Blended finance models, combining grants with lower-cost debt, offer a promising alternative, reducing risk and unlocking growth potential.

Policy and Subsidy Gaps

Government policies must prioritise water-efficient AgWater technologies, especially for high-value crops. Expanding subsidies for tools like precision irrigation and automated systems is essential. Large-scale demonstrations and farmer-focused campaigns are needed to build trust. Partnerships with local organisations can further support adoption and scalability.

Cultivating Farmer’s Trust

Farmers are the ultimate decision-makers, and their adoption of technology is influenced by trust and perceived value. Direct engagement through field demonstrations, partnerships with farmer producer organisations (FPOs), and leveraging state agricultural departments are key strategies to build this trust. Simpler financing options, such as subscription models can help overcome affordability barriers.

Bridging the Skill Gap

Automation may solve for precision and efficiency, but scaling AgWater solutions requires significant human capital. Building a network of skilled technicians and service providers in rural areas can ensure seamless installation, operation, and maintenance of these technologies. This human infrastructure is as critical as the technology itself.

Profitability vs Impact

Innovators in the AgWater space often straddle two interconnected but distinct priorities, farmer welfare and profitability. While improving yields and reducing input costs are direct benefits for farmers, companies must navigate the challenge of ensuring their long-term financial sustainability. This requires a delicate balance of pricing, operational efficiency, and strategic partnerships.

Measuring Impact

Impact investors increasingly demand credible, data-driven insights into the social and environmental benefits of AgWater technologies. For companies, systematically capturing and independently validating impact metrics such as water saved, productivity improved, or carbon footprint reduced can unlock new funding opportunities and enhance credibility.   

Way forward

Addressing India's AgWater challenges needs a strategic and multi-pronged approach:

• Prioritise AgWater Solutions: Drive affordability, accessibility, and farmer-centric approaches through ecosystem collaborations, ensuring AgWater emerges as a national priority for scalable and sustainable agriculture
• Policy Advocacy: Strengthen policies/schemes like PDMC(Per Drop More Crop), at state and central levels for micro-irrigation, IoT automation, and remote sensing, alongside large-scale farmer awareness campaigns and demonstration projects to accelerate adoption
• Mobilise Capital and Rural Expertise: Bridge funding gaps with ₹50 crore philanthropic capital to scale user-friendly and cost-effective technologies. Invest in building rural human capital by training technicians and service providers for effective technology implementation and maintenance