Overseas Indians park $17.41 billion in FCNR deposits
Subhana Shaikh
subhana.shaikh@livemint.com
Mumbai
Non-resident Indians (NRIs) have poured $17.41 billion into Indian banks through foreign currency non-resident (FCNR) deposits under a new deposit incentive scheme, recording a promising start to the campaign to attract dollars and boost the rupee. Announced on 5 June and rolled out three days later, the scheme allows NRIs to make leveraged deposits and runs till the end of September, with the central bank taking the hedging risk, offering overseas investors the potential to earn up to 14% return on their money.
The Reserve Bank of India (RBI) on Monday said its dollar swap facility received a total of $20.72 billion till 17 July, with FCNR-B deposits accounting for the lion’s share. Apart from FCNR(B) deposits, the swap window also received $1.97 billion in overseas foreign currency borrowings and $1.34 billion through external commercial borrowings (ECBs). Commercial banks exchange dollars for rupees at the swap window at guaranteed rates.
“The swap facility has seen avid interest and attracted steady forex inflows since June 8, 2026,” the RBI said in a press release. The official data follows weeks of uncertainty; while private sector lenders described customer interest as strong, most had refrained from disclosing specific inflows, unlike public sector banks which had already begun revealing collections and targets.
Gaura Sengupta, chief economist at IDFC First Bank, termed it a “very healthy start". She noted that given the current pace, there could be an upside risk to estimates of overall FCNR-B inflows reaching $50 billion due to the scheme, with major flows likely in August and September. She added that the FY27 Balance of Payments (BoP) surplus is expected to be moderate at $25 billion, helping to moderate rupee depreciation.
The concessional swap window was introduced to incentivize capital inflows and strengthen India’s BoP amid global uncertainties. The FCNR-B window remains open until 30 September, while the facility for overseas foreign currency borrowings (OFCBs) and ECBs is available until 31 December.
“This is an excellent indication of what kind of funds could flow in under the scheme,” said Ashok Chandra, managing director and CEO of Punjab National Bank (PNB). Chandra expects flows to pick up further after 15 August. PNB is currently targeting $2.5 billion in FCNR deposits and has received $425 million so far.
However, banks are reportedly being selective, focusing on FCNR-B deposits from NRIs with over $1 million as overseas funding costs rise. Smaller leveraged deposits are becoming infeasible, which could potentially undermine the goal of attracting $30-40 billion in total inflows.
Bankers initially grappled with tax-related concerns among NRIs in the US and UK, as well as uncertainty over the source of flows. Operational clarifications only arrived later in June, prompting the RBI and the government to meet with lenders in mid-July to push for faster mobilization. Domestic banks do not expect significant inflows from the US, as many NRIs there remain wary due to stricter tax scrutiny and compliance challenges following a similar 2013 program. Officials from the central bank and the Union finance ministry have continued to meet top bank executives regarding the incentivized scheme.
Four Indians killed in ship attack in Ukraine’s Odesa
Bloomberg
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Four Indian seafarers were killed and one hospitalized in critical condition after a ship departing from the Ukrainian port of Odesa came under attack on Sunday evening.
The vessel, MV Golden Leo, was attacked with 17 crew members on board, including the five Indian nationals, the Ministry of External Affairs (MEA) said in a statement on Monday. “Our Mission in Ukraine is closely monitoring the situation and is making every effort to extend all possible assistance to those affected,” the ministry said, offering condolences to the families of the deceased seafarers.
While the MEA did not provide specific details of the attack, Ukraine’s port authority reported that 10 people were killed when Russia struck a Guinea-Bissau-flagged merchant ship near Odesa. According to the Russian defence ministry, its forces launched a “massive” attack on what it described as military and logistical centers in Kyiv and the surrounding area, as well as the Pivdennyi port in the Black Sea region of Odesa. Russia and Ukraine have traded significant air fire recently, with Ukrainian forces hitting Russian e-commerce warehouses on Saturday.
The deaths in Odesa follow a period where multiple Indian sailors were killed in strikes on ships in and around the Strait of Hormuz during the US-Iran war. India condemned the attack in Odesa, reiterating that targeting commercial shipping and endangering civilian crew members was a “deplorable” act.
India is a major contributor to the global maritime workforce, with more than 310,000 Indian seafarers on merchant ships, making the country the second-largest supplier of sailors in the world.
India-Tibet barter trade to resume
PTI
Pithoragarh
The annual barter trade between Indian and Tibetan traders, which was suspended during the covid pandemic in 2019, is set to resume on 1 August through the Lipulekh Pass in Uttarakhand’s Pithoragarh district, officials said on Monday.
Traders, however, said the delayed start of the cross-border exchange of goods will not benefit much as the trade is restricted until October, and Tibetan buyers start losing interest after August. Indian traders travel to Tibet carrying items such as rock sugar, jaggery, cosmetics, and specific grocery items, and bring back wool, pashmina jackets, shoes and other products.
According to officials, Indian traders have been granted permission to enter the market in Purang (Taklakot), Tibet, and the trade will commence on 1 August. Information received from the Tibetan administration confirms that Indian traders will be permitted to enter Tibet starting August 1, said Ashish Joshi, Sub-Divisional Magistrate and Trade Officer of Dharchula.
Around 28 Indian traders had been waiting for several days to receive permission from Chinese officials.
Inside Kerala’s global ingredients powerhouse
Over five decades, Synthite became a $500 million B2B success story. Now, it’s looking to diversify and reach $1 billion by 2030
Radhika P. Nair
radhika.nair@livemint.com
Kochi
If you have ever used a desert air cooler padded with fragrant vetiver or sat on a balcony shaded by a vetiver screen sprinkled with water, you will recognise its unmistakable earthy scent. Perfumers noticed it decades ago and transformed the essential oil derived from the roots of this humble grass into one of perfumery’s most prized base notes, featuring in an estimated 90% of luxury men’s perfumes. Although vetiver is native to India and derives its name from the Tamil word vettiveru, meaning “cut root”, it is the Haitian variety that has long dominated the global perfume industry. About half the world’s vetiver oil originates in the Caribbean nation, where the grass was introduced by the French only in the 18th century.
That is changing. On 600 acres of arid and otherwise uncultivable sandy soil hugging the southeastern coast of India, particularly in Tamil Nadu, a specially cultivated variety of vetiver is now grown. The essential oil extracted from the roots of these plants has made its way into luxury perfumes, including American fashion designer Marc Jacobs’ Daisy Murakami Eau de Parfum. At the heart of that journey is a natural ingredients company headquartered in the small town of Kolenchery, about 25km from Kochi, Kerala. Synthite Industries works closely with contract farmers to cultivate the grass and harvest its roots and then extracts the fragrant oil before it travels to Swiss flavours and fragrances giant Givaudan’s laboratories, where it becomes, Vetiver des Sables India Orpur, which in turn becomes part of perfumes sold around the world.
The vetiver project is just one example of the role Synthite plays in the global natural ingredients supply chain. Synthite, founded in 1972, is the world’s largest producer of spice oleoresins, controlling approximately 30% of the global market. Its customers include some of the world’s largest flavour, fragrance and food ingredient companies, including Swiss giants Givaudan and dsm-firmenich, Ireland’s Kerry Group, New York-listed International Flavors and Fragrances (IFF), as well as food and consumer goods companies such as Tata Consumer Products, ITC Ltd, Hindustan Unilever Ltd, and PepsiCo.
The same company that helps create a premium fragrance ingredient for one of the world’s largest perfume houses also formulated the seasoning that gives Kurkure its distinctive taste and the masala sachet inside every packet of YiPPee! Noodles. It also owns masala and ready-to-cook brand Kitchen Treasures, premium bean-to-bar chocolate brand Paul & Mike and gourmet ingredients and specialty foods brand Sprig. In 2025-26, Synthite hit a critical milestone: $500 million in revenue. Yet, despite building one of India’s most successful ingredient manufacturing companies, Synthite finds itself at an inflection point. “The first $500 million took us 54 years. We want to make the next $500 million by around 2030,” says Aju Jacob, managing director of Synthite. “But that journey will be very different. That’s what we are working towards now.”
The company is in the midst of the biggest transformation since it was founded. It wants to expand beyond commodity spice extracts into higher-value natural solutions, expand its global footprint to be closer to both raw materials and customers, make strategic acquisitions, and restructure the organization to set it up for its next phase of growth. Jacob, the younger son of Synthite founder C.V. Jacob, is in a hurry to get all this done, for two reasons: He plans to retire at 65, a little over three years from now, and he wants to take Synthite public before then.
Spice capital
To understand the need for this transformation we need to first understand the industry that made Synthite what it is today. For centuries, the world came to Kerala for its spices. Romans, Arabs, and later European colonial powers all sailed to the Malabar Coast in search of pepper, cardamom and other prized spices. “Today people still come to Kerala for spices, but in a different form,” says Dr K. Anees, principal scientist at the Indian Institute of Spices Research. The breakthrough came with the two-stage extraction.
Oleoresins are concentrated extracts containing both the volatile oils responsible for aroma and the non-volatile compounds that deliver flavour, pungency and colour. After the extraction, the two sets of compounds are blended back in different proportions, depending on a customer’s requirements. Unlike ground spices, which vary from one harvest to another, oleoresins provide manufacturers with consistency and control over flavour, aroma, colour and pungency, so products such as noodle seasoning or chips taste identical across millions of packs.
Kerala became the global capital of spice extraction because it combined raw material availability, a major port in Kochi, and deep scientific expertise around spices, says Anees. “Over time, companies invested in extraction technologies and application knowledge, creating an ecosystem that was difficult to replicate elsewhere.” Three companies headquartered in and around Kochi—Synthite, Plant Lipids and Mane Kancor—account for an estimated 65-70% of the global spice extracts market.
Beyond oleoresins
“While Synthite holds a leadership position in oleoresins, the scope for future growth is only incremental. The larger growth opportunities lie in adjacent categories such as natural colours, nutraceutical ingredients, botanical extracts and actives,” says Shashi Kant Singh, partner and agri transformation specialist at PwC India.
This is a worldview Synthite has already embraced. “We will continue to grow spice oleoresins. That business built this company and it will remain our foundation,” says Jacob. “But if we want to become a billion-dollar company, we cannot get there by simply selling more oleoresins. We want to become a natural solutions company. Our strength has always been natural ingredient isolation and extraction. The larger opportunities lie in applying those capabilities to create much-higher-value natural solutions.”
Around 80% of Synthite’s revenue still comes from its extracts business, with five products—black pepper, paprika, capsicum, turmeric and ginger—accounting for 60%. While they provide scale, they have become increasingly commoditized. The rest of the portfolio, spanning products such as coffee extracts, vanilla, mustard essential oil, fragrance ingredients and natural colours, contributes a smaller share of revenue but punches above its weight when it comes to profits.
The strategy is already visible across the portfolio. As regulators, particularly in the US, push manufacturers towards natural colours, Synthite is extending extracts it already produces from turmeric, paprika, spirulina, chlorophyll and marigold into colour solutions. Alongside natural vanilla extracts, it now manufactures bio-based vanillin from ferulic acid using microorganisms, allowing it to create more natural, cost-effective vanilla solutions than using natural vanilla extract alone. It is also working with a Canadian partner to develop natural pesticides using mustard essential oil.
The clearest proof that the strategy can work already exists within Synthite. Seven years ago, its perfumery ingredients business generated annual revenue of just around ₹7 crore. Last year, it crossed ₹120 crore. “The only reason for this growth was focus,” says Jacob. “We identified it as a strategic area, built a dedicated team around it and kept investing.” Colin Gillie, former director of global sourcing at Kerry, says this willingness to move into technically demanding niches has consistently kept Synthite ahead of the market. “The company has never been content with simply supplying standard ingredients,” says Gillie. “It has consistently invested in new technologies, new applications and new categories ahead of where the market was moving. That’s one of the reasons customers continue to see it as a long-term innovation partner rather than just another supplier.”
Synthite clearly wants to be more than just an extracts supplier and become a more valuable application-led ingredients and solutions partner to clients. The trouble is it will be playing catch-up in many areas. Each of the new categories that Synthite is expanding into, including natural colours, speciality actives and perfumery ingredients, is dominated by companies that have spent decades building expertise. The natural colours market, estimated to exceed $2 billion globally, is ruled by names such as Denmark’s Oterra, the world’s largest dedicated natural colours company, Netherlands-based GNT Group, known for its EXBERRY colouring foods, US-based Sensient Technologies, and Germany’s Döhler Group.
In nutraceutical ingredients and speciality actives, US-based Kemin Industries, Italy’s Indena and Indian-origin Sabinsa have built proprietary ingredient platforms supported by clinical research, intellectual property and formulation expertise. Indeed, some companies in the science-led speciality ingredients space are far ahead of Synthite. Take for instance, Kemin Industries, a company that Jacob wants to emulate. Both companies built expertise extracting bioactive compounds from plants, but Kemin invested much earlier in turning those molecules into clinically validated, application-led specialty ingredient platforms. While Synthite focused on extracting the active molecule, Kemin invested in turning those molecules into proprietary ingredient platforms.
Today, Kemin generates annual revenue of around $1.4 billion, according to ZoomInfo, with much of its portfolio built around proprietary specialty ingredients rather than commodity extracts. One example is lutein, a carotenoid or natural pigment extracted from marigold flowers. Synthite manufactures lutein extract from marigold and supplies it as an ingredient. Kemin invested heavily in application science, clinical studies, formulation, regulatory approvals and intellectual property to create FloraGLO Lutein, one of the world’s best-known branded ingredients for eye health.
“The extraction business has reached a level of maturity. The next phase of value creation will come from application science; developing ingredients that are stable during processing and delivering specific functional benefits in food, nutraceutical and personal care applications,” says PwC India’s Singh. Jacob admits that Synthite missed out on capitalising on its expertise in extraction science sooner to create proprietary ingredient systems and solutions. “We had not proactively done exploratory research. But now we feel the need to do that. We are revamping that entire segment to become much more exploratory, and it is a top priority,” he says. Yet Jacob believes Synthite has one important advantage. “We are not starting from zero. Technologically, we are already halfway there.”
Jacob believes the reinvention requires changing the organization as much as the product portfolio. Businesses such as perfumery, which has crossed ₹100 crore in revenue, are being run as dedicated business segments with their own leadership teams rather than as part of a single integrated organization. “The challenge is to retain the advantages of being one company while allowing each business to move at its own speed,” he says. That philosophy also explains why Jacob is open to hiving off non-core consumer brands such as Kitchen Treasures, Paul and Mike, and Sprig, over time. “That’s at least three years away,” he says. Paul and Mike, Sprig and neutraceuticals brand NatXtra together form Zenriva, Synthite’s suite of premium consumer products. While Kitchen Treasures is a ₹330-crore business, Zenriva does about ₹30–35 crore today. “The team is confident of taking it to around ₹70–80 crore. Once it reaches that scale, we will decide the next step.”
Eye on India
While its growth is primarily led by exports, Synthite’s India-focused business-to-business segment is set to play a more prominent role. India’s food processing market is estimated to grow from around $300 billion in 2023 to nearly $600 billion by 2030, according to a joint Ficci and Deloitte study released earlier this month. That is creating demand for companies that can help food manufacturers develop products rather than simply supply ingredients. Through Symega Food Ingredients, Synthite intends to be that company. Synthite launched Symega in 2006 to offer seasonings, flavours, sauces, natural colours and customised ingredient systems for packaged food companies, quick-service restaurants and food service businesses in the domestic market.
“The conversation has shifted from simply buying ingredients to jointly solving problems,” says Biju Joseph, director of procurement for India, Middle East and Africa at dsm-firmenich. “Customers are looking for partners with strong scientific capabilities." The company could also expand Symega to Africa.
Beyond Kerala
The transformation is also changing where Synthite wants to manufacture. For much of its history, the company’s international strategy was straightforward: Source raw materials primarily in India and where needed from around the world, but process them in India and export finished ingredients to global customers. That model is beginning to change. “There are two reasons to expand outside India,” says Jacob. “One is when you need to be closer to the raw material because certain botanicals and fresh crops lose value rapidly after harvest, making local extraction both technically and economically more attractive. The second is to be closer to the customer.”
Synthite’s earliest overseas manufacturing investment was in China, initially to process paprika sourced locally. Over time, this has evolved into a multi-ingredient extraction unit taking advantage of China’s position as a major producer of several botanicals. The company has also begun expanding its sourcing footprint. In Rwanda, Synthite is working with farmers to cultivate crops such as marigold, rosemary and turmeric. Around a quarter of the company’s marigold requirement now comes from Africa. It also operates a licensed cannabis extraction business in Canada serving that country’s regulated medical and recreational markets.
Synthite is now set to expand to other locations, including South America, where it already has a presence in Brazil, and Indonesia. Jacob says he would like global centres to account for at least 25-30% of Synthite’s manufacturing. Jacob’s ambition is that, in the decades ahead, Synthite will not merely supply natural ingredients to the world but become a natural solutions company.
KEY NUMBERS
- $500 million: Synthite’s revenue during the last fiscal. Aside from the oleoresins business, it also owns food brands like Kitchen Treasures.
- ~80%: Share of the extracts business in Synthite’s revenue. Of that, black pepper, ginger, paprika, capsicum and turmeric account for 60%.
- 1972: The year Synthite was founded. It is now the world’s largest maker of spice oleoresins, controlling about 30% of the global market.
Rupee falls 6 paise to close 96.36 against dollar
PTI
The rupee fell 6 paise to 96.36 against the US dollar on Monday, on risk aversion in global markets and a surge in crude oil prices. Foreign exchange traders said escalating US-Iran conflict and rising US Treasury yields weighed on the rupee.
At the interbank foreign exchange, the rupee opened at 96.53 against the US dollar and traded in the range of 96.35 to 96.53 during the day. The domestic unit finally settled for the day at 96.36, down 6 paise from its previous close.
On Friday, the rupee gained 12 paise to settle at 96.30 against the US dollar. “We expect the rupee to trade with a negative bias on escalating conflict between the US and Iran over the weekend and elevated crude oil prices," according to Dilip Parmar, senior research analyst at HDFC Securities. He noted that the recent spike in Brent crude, driven by geopolitical tensions, has pressured emerging market currencies like the Indian rupee.
TV industry eyes alternative metrics as BARC ratings stop
The Centre has asked BARC to halt TV ratings until its licence is renewed under the Television Ratings Policy, 2026. Broadcasters and advertisers are now relying on historical BARC data and OTT analytics to negotiate deals.
Lata Jha
lata.j@livemint.com
New Delhi
With the information and broadcasting ministry directing Broadcast Audience Research Council (BARC) to stop publishing television ratings for news and non-news genres until its licence is renewed under the Television Ratings Policy, 2026, the broadcasting industry is scrambling to find alternative ways to sustain advertising operations.
Broadcasters and media agencies are increasingly relying on historical BARC ratings, DTH (direct-to-home) and cable distribution data, OTT analytics such as watch time and unique viewers, and campaign performance metrics including sales and website data and internal analytics, but that is a stopgap rather than a complete substitute, he added.
Ritu Dhawan, managing director, India TV, said established networks with a consistent ratings history have the advantage of using their long- term audience data and have been exploring future alternatives, including hybrid models combining Panel data backed with large scale digital data, no standardized, independently audited system is currently available,” she said, adding that the timing of the suspen- sion means there’s no true substitute in place. In the interim, broadcasters and advertisers are leaning on proxies like historical data, and ER-based (effective rate) deals to keep business moving,” Rupali Chavan, senior vice president and head of business at media agency Mudra, agreed.
However, the impact isn’t uniform, she said. Categories driven by ER are stable, while CPRP-led (cost per rating point) planning has taken a hit due to the lack of validation of planning and performance KPIs. As a result, some advertisers have chosen to pause campaigns and wait for clarity, while ER-based advertisers continue spending [on cam-]paigns and broadcasters launch marquee content to maximize audience reach. These alternative metrics provide useful insights but cannot fully replace an independent, industry-wide ratings system, agreed Akshat Pande, managing partner, Alpha Partners.
As a result, advertisers are seeking greater transparency, negotiating more aggressively on pricing, and placing greater emphasis on measurable campaign outcomes. Some brands are also allocating a larger share of their advertising budgets to digital platforms, where audience measurement is more robust, Pande added.
The bigger concern is what happens if the suspension drags on. Without a common, independently verified benchmark, pricing TV inventory gets harder, negotiations take longer, and rates—especially for small broadcasters—could come under pressure. The uncertainty could also push ad budgets toward digital.
Broadcasters like Sony, Zee and JioStar did not respond to Mint’s queries.
“Broadcasters can rely on historical ratings, genre-level trends, audience composition data, past campaign performance, and cross-platform metrics from digital and connected-TV inventory,” Alay Razvi, managing partner, Accord Juris, said. In practice, many already use these inputs in negotia- tions.
India needs a climate-integrated inflation forecasting framework
It’s time to formally incorporate climate-driven inflation risks for effective monetary policy action
Abhinav Jindal & Vaibhavi Singh
As India becomes increasingly vulnerable to climate change, its implications for inflation can no longer be ignored. Climate risk is now inflation risk too, requiring monetary policy frameworks to evolve and reflect this reality. The Reserve Bank of India’s (RBI) Monetary Policy Report of April 2024 estimated that climate-induced shocks could add up to 100 basis points to headline inflation by 2050. While India’s flexible inflation targeting (FIT) framework has a CPI inflation target of 4%, with a margin of 2% on either side, its primary tool—the repo rate—is effective against demand-driven inflation. So, we must evaluate how this band would change if climate shocks are incorporated.
This is especially important because food, which accounts for over one-third of the consumer price index (CPI), is highly climate-sensitive. Yet, a 6% inflation reading caused by a failed kharif harvest and one driven by excess liquidity appear identical in conventional models, despite requiring very different policy responses. Existing frameworks struggle to distinguish between the two. Global evidence shows that excessive rainfall, heat stress and flood damage reduce productivity and disrupt supply chains. Inflation-targeting assumes supply shocks are temporary and self-correcting, but climate change has been making them more frequent, persistent and overlapping. This represents a structural shift in inflation dynamics.
The FIT framework largely treats all inflation deviations as alike, even though climate-induced inflation differs from demand-driven inflation in both persistence and policy implications. The key challenge is to tell temporary price spikes apart from persistent climate shocks. Misreading a climate-driven inflation spike as excess demand could slow growth without easing inflation, while underestimating persistent climate shocks risks inflation expectations getting unanchored.
Climate change is reducing RBI’s margin for policy error. Research suggests food inflation is turning structural, with temperature shocks raising it by up to 0.4 percentage points. India has made significant progress in integrating climate risks into policymaking through three key developments:
- First, RBI’s Monetary Policy Committee (MPC) has increasingly recognized climate risks in its deliberations, citing El Niño (2023), excessive rainfall (2024) and a likely deficient southwest monsoon (2026) as risks to inflation and growth.
- Second, Climate Risk Disclosure Frameworks require regulated entities to report climate exposures in line with principles outlined by the Task Force on Climate-related Financial Disclosures.
- Third, RBI’s newly launched Reserve Bank-Climate Risk Information System (RB-CRIS) provides centralized climate data for climate-adjusted forecasting.
Integrating these into policy models is the next challenge. Despite these advances, climate risk largely enters policy through qualitative judgement rather than as a quantified input for inflation models. The next step is to systematically adopt inflation forecasting that duly takes climate data into account for policy calibration. No major central bank has completely solved the climate-driven inflation riddle, but three cases are instructive:
- The European Central Bank’s (ECB) three-part taxonomy has terms like ‘climateflation’ for supply-side price pressures, ‘fossilflation’ for energy volatility related to carbon pricing, and ‘greenflation’ for input cost increases led by decarbonization efforts.
- The Bank of England’s (BoE) Climate Biennial Exploratory Scenario has extended its forecasting model to embed physical climate variables directly into the rate-decision process.
- The Reserve Bank of Australia publishes a climate scenario analysis that explicitly separates weather-driven supply shocks from demand-side inflation.
Led by these examples, India could try routing RB-CRIS’s meteorological feeds into the macro-economic models that underpin inflation projections and let policymakers see how much of a CPI surprise can be traced to climate effects vis-à-vis other factors. India is fast catching up with Western countries in developing climate-related data infrastructure and frameworks. We could now take the next leap of faith: using that infrastructure to provide tangible forecasts as inputs for policymakers. It is amply clear that climate risks in India need to be integrated into its inflation targeting framework before climate shocks become sufficiently persistent to weaken the central bank’s current framework.
These are the authors’ personal views.
Abhinav Jindal & Vaibhavi Singh are, respectively, an economist and an economics student at Shiv Nadar University.
Don’t push the young off farms: improve their incomes
Vidya Mahambare & Vivek Jadhav
Indian policymakers recently renewed an old call: move workers out of agriculture. It is good economics—the traditional path to prosperity involves a country’s labour force moving from farms to manufacturing and then to services. Except that in India, that transformation is already done to a large extent, at least among the young. Such calls today ignore what has happened to the age structure of those employed on farms and what will happen if we push more people off them.
The median age of a farm worker in India in 2025 was 40 years, having increased by five years over the last two decades. In some states, farm workers are even older: a typical worker in Kerala was 53 years old, and in Tamil Nadu and West Bengal, 48. Even in Uttar Pradesh and Bihar, a typical agricultural labourer was 40 years old.
In contrast, between 2004-05 and 2025, the proportion of young adults (20-29 years old) working in farming, mining and allied activities dropped dramatically from 35.4% to 18.3%. If animal husbandry is excluded, barely 13% of young adults now work on farms and other primary sectors. Young workers have been leaving farms at roughly twice the rate of those older than 30, a natural progression as more young adults are highly educated and aspire to work in industry and services. During the last 20 years, service-sector employment among 20-29-year-olds rose from nearly 20% to 28.7%, and education enrolment doubled to nearly 12%.
Any call to move people out of agriculture today is effectively a call to accelerate the aging of the farm workforce, since those who leave will invariably be young. While the country must mechanize farms to improve productivity, someone must still run tractors, manage irrigation, read sensors, and implement artificial intelligence. If only older workers remain, India will be short of hands capable of adopting technology to improve farming.
We do not need more young people on farms, but we do not need to push out those who remain either; instead, we must improve their earnings and make farming viable. Even among 30-plus year-olds, only about 21% worked on farms and in mining in 2025, down from nearly 37% two decades ago. Meanwhile, the share of this group working in animal husbandry has tripled from about 3% to nearly 9%—representing about 65 million people. This shift suggests that suitable jobs in industry and services in rural areas remain few and far between.
Unemployment among young adults has nearly doubled to about 6%, and many are leaving the labor force as they struggle to find suitable jobs after graduation. Pushing for a further exodus just adds more people to the job-seeking queue while leaving fields to an ever-older set of hands. While young adults remain over-represented on farms in states like Madhya Pradesh (about one in four), the answer is not to push them off but to make it easier for them to move to parts of rural India where farm work pays well, largely in the south.
This requires:
- Investing in migrant housing and easing social integration in destination states.
- Making welfare entitlements truly portable across states.
- Lowering hard physical labour via mechanization.
- Re-allocating labour from low-productivity to high-productivity farms and regions.
India also needs more investment in agricultural research, irrigation, and the consolidation of fragmented plots to raise yields. We must incentivize the agro-processing industry to add value, develop cold storage, and nurture stable exports to reduce price volatility.
Reforms must be viewed holistically. While the National Education Policy targets 50% of youth in higher education, there is a growing need for trade skills like plumbing and electrical work. Similarly, housing policies that subsidize building on small rural plots can discourage land sales and farm consolidation, holding back productivity.
The shift India needs is no longer away from agriculture, but in how we treat the sector and its workers.
Vidya Mahambare & Vivek Jadhav are, respectively, Union Bank chair professor of economics at Great Lakes Institute of Management, and assistant professor at the Institute of Management Technology.
‘Vikram-1 success has drawn global attention to India’
INTERVIEW: It (Vikram-1) demonstrates that building world-class space technology in India is possible — Pawan Kumar Chandana, Founder, Skyroot
Shouvik Das & Nabodita Ganguly
New Delhi
Skyroot Aerospace founder Pawan Kumar Chandana is finally getting some sleep. After weeks of surviving on just three to four hours of rest a night as his team prepared for the historic Vikram-1 mission, Chandana says he’s able to be a little more relaxed now that India’s first privately developed orbital rocket has successfully placed satellites in space. But the respite will be brief—the company is already preparing for its next launch later this year, while accelerating work on a more powerful Vikram-2.
The successful mission marks a milestone for the country's private space sector. India formally opened its space sector to private participation in 2020, introducing reforms that allowed private companies to build, own and launch rockets and satellites, while setting up IN-SPACe to promote and regulate private participation.
Chandana said the government has moved very quickly and supported the industry efficiently. "It also strengthens India's credibility globally. You saw the congratulations coming in from across the industry, and international customers are watching closely. This launch tells them that India now has a commercially capable space industry, which is a big boost for winning business from overseas as well,” he said. Edited excerpts from the interview:
How was it the day you were launching Vikram 1?
It was a very crucial period for us. Every component in a rocket is critical, and there are thousands of systems that all have to work together seamlessly. Even a minor issue has to be understood, fixed, and thoroughly tested before moving ahead. The final two to three weeks were especially intense, with most of the core team averaging just three to four hours of sleep a night and many days without any sleep at all.
After six years of development, everyone treated the mission as a personal one. Since this was the first time a private company was launching an orbital rocket from a government spaceport, there were many firsts and constant last-minute technical challenges that the team had to solve in real time.
What’s next? Should we expect another Vikram-1 launch, or will Vikram-2 be the next launch?
Vikram-1 is our workhorse rocket, so you'll see more Vikram-1 launches. We're currently analysing all the data from the first mission to identify improvements for the second mission, and that process will determine the exact timeline.
As of now, our target is to conduct the second Vikram-1 launch later this year. Next year, we aim to significantly increase our launch cadence. We're also targeting the first launch of Vikram-2 end of next year. That said, Vikram-2 is a much more complex vehicle, so we'll continue evaluating our progress over the coming quarters before locking in the schedule. The goal is to keep increasing the number of launches every year.
How much does access to capital influence your launch plans and the pace at which you scale?
Every launch involves uncertainty. We think about it in terms of known issues, known unknowns, and unknown unknowns. The known unknowns are risks we can anticipate and prepare for. However, there are also unknown unknowns—things you can only discover during flight. That's why every launch is a learning experience. Before launch, we make sure we've addressed all the known unknowns as thoroughly as possible.
Capital also directly impacts our timelines. As a private company, we have to be very careful about how much we spend and when we spend it. It took us almost seven years to raise around $100 million, so scaling has been a gradual journey of raising capital, building the technology, and validating it through successive milestones.
What's the development cycle like for Vikram-2? Will Vikram-2 need extra funding?
The first stage of development is already complete, and we've also carried out flight testing. So there are no major changes required there. The second stage is still under development, and completing that development is what will take time.
But the Vikram family shares a lot of common systems and technologies, so we're able to build on what we've already developed. Now, we're adequately funded as we just raised a round. Beyond that, we'll evaluate our capital requirements based on the progress of the programme.
What impact do you think this launch will have on India's broader spacetech ecosystem?
This is a global milestone achieved by an Indian private company, and it demonstrates to the entire ecosystem that building world-class space technology in India is possible. That gives founders and engineers the confidence to pursue ambitious ideas.
It will also boost investor confidence because we've demonstrated that India can commercially build and operate something as complex as an orbital launch vehicle.
At the same time, it validates the government's efforts in opening up the space sector and creating a more supportive regulatory environment. I think this success will encourage even greater support for the industry.
Finally, it strengthens India's credibility with international customers. They're watching these milestones closely, and this launch reinforces India's position as a serious player in the global space market.
