India’s agriculture has historically been shaped by subsidies, minimum support prices, and procurement-driven policies, particularly for cereals, pulses, and oilseeds. While this model has ensured food security, it has created several structural challenges. First, the most subsidised crops, despite heavy government backing, show minimal growth—around 1.5% annually once maize is excluded—indicating inefficiencies in policy design.

Second, intensive cultivation of crops like rice and wheat has contributed to environmental stress. For example, exporting 1 kg of rice effectively transfers about 3,000 litres of water out of the country, exacerbating groundwater depletion in Punjab and Haryana. Soil nutrient depletion and declining nutritional quality of produce further compound the problem. Third, the sector faces risks from climate variability, air pollution, and biodiversity loss.

Thus, the key challenges are:

• Reducing dependence on subsidies without destabilising farmer incomes
• Enhancing crop productivity and nutritional content
• Ensuring environmental sustainability through resource-efficient practices
• Building resilient systems capable of absorbing shocks from climate and market volatility

Food security ensures that the population has access to sufficient calories, but nutritional security guarantees access to diverse and nutrient-rich foods critical for health and productivity. India has made significant strides in cereal production and exports; however, malnutrition and stunting remain pervasive, with nearly 35% of children under five affected.

Soil nutrient depletion, environmental degradation, and excessive focus on water-intensive crops reduce the micronutrient content of staple foods, leading to 'hidden hunger'. Without shifting policy emphasis, increased production alone may not translate into improved health outcomes.

Focusing on nutritional security also has long-term economic benefits. Healthier populations are more productive, reducing healthcare costs and enhancing human capital. Integrating nutrition-sensitive policies into agricultural planning, promoting crop diversification, and investing in biofortification can create a resilient and balanced food system.

AgriStack is India’s initiative to develop a digital public infrastructure for agriculture, integrating land records, cropping patterns, input requirements, and purchase histories. By leveraging digital and space technologies, policymakers can accurately identify who is farming and the specific inputs they need, particularly in a context where tenancy, outdated land records, and fragmented ownership complicate implementation.

This targeted approach allows the government to rationalise subsidies, potentially saving ₹30,000–40,000 crore annually in fertiliser allocations. It also enables precision farming through recommended nutrient doses, soil health mapping, and better water management. Farmers receive timely information, reducing wastage and increasing productivity.

Furthermore, digital infrastructure enhances transparency, reduces leakages, and empowers smallholders. By moving from a blanket subsidy model to a development-oriented framework, AgriStack aligns incentives with sustainability, efficiency, and equitable growth.

India’s export-oriented rice strategy has positioned the country as a global leader in rice trade. However, it has significant environmental costs. Producing 1 kg of rice consumes approximately 3,000 litres of water, intensifying groundwater depletion in major rice-growing regions. Punjab and Haryana, the country’s key exporters, see water tables falling by about 1.5 feet annually.

Intensive mono-cropping and heavy irrigation requirements contribute to soil degradation, nutrient depletion, and reduced biodiversity. Chemical fertiliser use, driven by subsidies, further impacts soil health and long-term agricultural sustainability. Export ambitions that disregard these factors risk compromising domestic water security and environmental resilience.

Therefore, any strategy to become a global food supplier must balance trade objectives with sustainable water management, soil restoration, and crop diversification to ensure that export growth does not undermine domestic resource endowment.

India’s agriculture is characterised by significant government intervention through subsidies, minimum support prices, and input control, particularly for cereals, pulses, and oilseeds. While these measures provide short-term security for farmers, they create distortions that may inhibit productivity and competitiveness. For example, highly subsidised crops often exhibit slower growth despite large fiscal outlays.

Experts argue for a more nuanced approach. Ramesh Chand notes that smart interventions in other major economies avoid distorting prices, focusing instead on contributory issues such as infrastructure, education, and technology adoption. Laveesh Bhandari suggests that excessive intervention fosters artificial market failures and politically entrenched subsidies that are hard to unwind. By stepping back where market mechanisms can function efficiently, the government can redirect resources toward innovation, research, and environment-friendly practices.

Thus, the optimal strategy balances state support for social and environmental objectives with market-led incentives for competitiveness, encouraging efficiency, productivity, and sustainable growth.

Policy reforms could focus on several fronts. First, rationalising fertiliser subsidies based on actual need and soil health, rather than flat allocations, can reduce waste and improve productivity. Targeted nutrient management can save ₹30,000–40,000 crore annually while promoting environmental sustainability.

Second, leveraging digital tools like AgriStack to monitor land use, cropping patterns, and input deployment ensures efficient subsidy distribution and promotes precision agriculture. Third, incentivising crop diversification and water-efficient practices in rice-dominant regions can address groundwater depletion and soil degradation. Examples include introducing high-yield pulses and oilseeds with lower water requirements.

Finally, aligning export strategies with sustainability goals ensures India’s trade growth does not compromise domestic resource security. By combining these measures, India can protect farmers’ livelihoods, improve nutritional outcomes, and maintain global competitiveness.

India’s rice export model demonstrates a classic trade-off between economic benefits and environmental costs. The country is a leading global rice exporter, generating foreign exchange and supporting rural incomes. However, this has come at the cost of water and soil resources. Exporting 1 kg of rice effectively exports 3,000 litres of water, intensifying groundwater depletion and stressing ecological systems.

This example highlights that short-term trade gains can exacerbate long-term sustainability challenges. Experts argue that while India has achieved food security, it has not ensured nutritional security or environmental resilience. Policies that focus solely on export volumes without considering resource efficiency may undermine domestic well-being and future productivity.

Lessons from this case study include the need for integrated planning that aligns export strategies with regenerative agriculture, sustainable water use, and soil restoration, ensuring that economic growth does not compromise ecological and social imperatives.