India’s booming food, agri sectors attracting preferential pricing on interest rates: Kotak Mahindra Bank
The Hindu
Post-pandemic, food/agriculture sector has seen flurry of activity, attracting preferential pricing on interest rates. RBI innovation Hub has been actively working towards digital onboarding of farmer land records. Work-from-home norms have seen tech entrepreneurs take up agri- and food-processing initiatives. Monsoon's progression will determine growth of tractor industry.
India’s food and agricultural sector has witnessed a flurry of activity post pandemic and has therefore, been attracting preferential pricing on interest rates despite the general rise in the rates, observed Kotak Mahindra Bank on Thursday.
“The increasing credit flow to the food and agri space by banks due to priority sector lending target requirements is ensuring large credit flow into this segment after the pandemic. Currently, the space is also getting preferential pricing on interest rates in the MSME space despite the upward interest rate movement in the last year,” Manish Kothari, President & Head – Commercial Banking, Kotak Mahindra Bank told The Hindu.
Post pandemic, the food and agriculture space has been clearly witnessing a surge in investments and expansion activities. In fact, the space was the least impacted even during the pandemic as it was labelled as critical and allowed to continue without restrictions, he noted.
The RBI innovation Hub has also been actively working towards digital onboarding of farmer land records and KYC details which can enable quick disbursement of crop loans based on online farmer details, Mr. Kothari said.
He further said, the pandemic and post-war developments have brought in a genuine price escalation across commodities, which in turn has made commodity-related businesses and trading activities more attractive in the country.
On the funding scenario, Mr. Kothari observed that there have been a spate of agri-tech firms who have got PE funding for undertaking several farmer-linked initiatives like drone-linked pesticide spraying, remote satellite-based crop assessment, plant health management and Application Programming Interface-enabled land record management.
Work-from-home norms have also seen several tech entrepreneurs take up agri- and food- processing initiatives bringing additional buoyancy to the space, he commented.
According to recent Foreign Trade Performance Analysis data, India’s overall exports remained resilient in late 2025, even as traditional sectors faced sharp declines. While shipments of gems and jewellery to the U.S. plummeted, the overall figures were bolstered by a massive 237% surge in telecom exports, particularly smartphones. Data shows that Indian exporters are aggressively diversifying their portfolios. By deepening ties with existing partners and discovering new alliances, India is replacing lost U.S. sales with a more diversified set of trade partners
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