Recalibrating Sustainable Practices with Micro Irrigation Solution

In an exclusive interview with Industry Outlook, Ramesh Ramachandran, MD & CEO of Mahindra Agri Solutions Ltd. and MD of Mahindra EPC Irrigation Ltd., discusses the growth of India’s micro irrigation market. He points to key drivers such as government support, rising farmer awareness, and targeted subsidies, while highlighting future growth enablers such as increased adoption by small landholders, timing of the launch of subsidy schemes, and the need for policy reforms to enhance climate resilience and sustainability. A seasoned business leader with over three decades of global experience in agriculture, strategy, innovation, and brand technology, Ramesh brings deep expertise in precision farming, digital transformation, and sustainable agribusiness growth.

The Indian micro irrigation market has been showing steady growth for over a decade. What factors are driving this growth, and how is it enhancing climate resilience among farmers?

The Indian drip irrigation market is witnessing steady growth driven by rising farmer awareness, strong support from the central government, continued support from the traditional states, essentially in central and southern parts of India, and increasing patronage by a few new states in the northern and eastern regions. Because of efforts put in by various players over the years, awareness among farmers on the benefits of micro irrigation has increased. This growth is also contributing to enhanced climate resilience among farmers. By significantly improving water-use efficiency, micro irrigation, which includes drip irrigation and sprinkler irrigation, enables cultivation even under low water availability. Drip irrigation in particular, with its targeted root zone application, ensures optimal moisture delivery, helping crops withstand high temperatures and water stress for crucial advantages in an increasingly unpredictable climate.

The Micro Irrigation Fund's corpus was increased by ₹5,000 crore in October 2024. How effective has this been in expanding drip irrigation adoption among smallholder farmers?

The increase of ₹5,000 crore to the Micro Irrigation Fund (MIF) in October 2024 has further empowered states to enhance drip irrigation adoption, especially among smallholder farmers. Managed by NABARD, the MIF provides financial support to states that choose to extend subsidies beyond the standard centre-state allocation. By offering bridge loans through the MIF, states are able to provide additional subsidies, sometimes covering up to 90% or even 100% of the cost. This can significantly improve the accessibility and adoption of micro irrigation systems for small and marginal farmers, making the scheme more inclusive and impactful.

Drip irrigation achieves 90% water efficiency. Given this, why is adoption low, and what policy shifts can drive implementation?

It is worthwhile noting that the area under micro irrigation (drip and sprinkler) has increased by about 5.2 million ha in the last 5 years. While adoption is moving in the right direction, it could grow faster. There are some practical challenges faced by the industry. These include the timing of the launch of annual subsidy schemes—often starting only in the second or third quarter—which pose a challenge to timely implementation and better coverage during a specific year. Additionally, a shortfall in fund availability at the state level to match the centre’s contribution on occasion causes delays in payments to micro irrigation companies, which in turn affects industry performance, as each company operates with their own operational and working capital norms and capabilities. At a farmer level too, in states with abundant surface water availability but falling groundwater levels, the perceived need for drip irrigation is low, and the productivity gains from micro irrigation are not yet fully appreciated.

While drip systems offer a higher return on investment in high-value horticulture crops as well as cash crops like cotton and sugarcane, at the moment, the economics are not as attractive for traditional crops like wheat or paddy. To address these challenges, certain policy shifts could prove effective. These include ensuring better centre-state coordination to run subsidy schemes all year round, enabling states to secure matching funds in advance, and enhancing promotion of micro irrigation through agricultural and horticultural infrastructure. Integrating major and minor irrigation systems (like dams and canals) with micro irrigation systems, implementing water metering and usage-based charging, while mandating NBFCs to support micro irrigation under priority sector lending can also help boost adoption.

Despite allocations of ₹3000–4000 crore under Per Drop More Crop (PDMC), installation is limited. How can subsidy structures and localized training programs bridge this gap?

While the ₹3000–4000 crore allocation under PDMC provides significant support, it can be amplified by on-ground education and training initiatives. To address this, the industry, through platforms like the Irrigation Association of India, has initiated upskilling and demonstration programs for local youth. Additionally, responsible companies are actively developing demonstration plots and showcasing successful crop outcomes to build farmer confidence. For instance, Mahindra EPC has developed over 250 demonstration plots that not only support farmers to understand techniques for productivity improvement but also enable horizontal deployment of success stories and learning from such activities. These efforts are complemented by ongoing awareness campaigns and promotional activities led by the Government of India.

Do you see any systemic/infrastructural changes in the space of micro irrigation which may lead to improved water use efficiency and eventually lead to improved micro irrigation?

We need to understand that the current estimated micro irrigation potential is based mainly on groundwater availability and a small proportion of surface water availability. The estimated potential thus is about 72 million ha. In case there are efforts to improve water efficiency through connecting surface irrigation to micro irrigation, then this potential is likely to be about double that of now. Fortunately, we do see efforts in this area, too. There are actions initiated, such as water distribution through pressurized piping systems, developing clusters around major irrigation projects connecting the last mile, i.e., micro irrigation. We also foresee a growing importance of cluster-based and cooperative farming, driven by increased land consolidation and community-led irrigation initiatives. This is one way to improve productivity as well as water use efficiency. We at Mahindra EPC are gearing up to make ourselves future-ready by participating in such areas.

As the micro irrigation market in India continues to grow, what innovations are crucial to achieving this growth and ensuring sustainability?

To achieve the projected growth of the Indian micro irrigation market and ensure long-term sustainability, several innovations are key. These include expanding the range of crops covered under drip irrigation, encouraging more states to participate in the scheme with appropriate fund allocations, and introducing mandates for high water-consuming crops like sugarcane, banana, and paddy, as well as states with fast depletion of groundwater levels. Advancements in precision farming with the inclusion of irrigation automation and promoting community-based irrigation through farmer bodies and water user groups will also play a critical role.