Budget 2026: From PM-KISAN to Seed Law - What’s in store for agriculture stocks

The forthcoming Budget 2026 presents a chance to enhance long-term resilience via specific initiatives in the agriculture sector, according to experts. Allocations for agriculture has increased consistently from ₹21,933 crore in FY 2013-14 to more than ₹1.27 lakh crore today, as per reports.

Experts believe that key priorities encompass sustainability, digital infrastructure, and shrimp exports, accompanied by demands for subsidy reforms aimed at improving efficiency.

Also, enhancing allied sectors like livestock, fisheries, and horticulture, along with expanding cold-chain and processing infrastructure, can substantially elevate farmer earnings, experts state.

From a market perspective, Harshal Dasani, Business Head, INVasset PMS, explained that the focus is shifting from headline allocations to balance-sheet quality and earnings visibility across the agri value chain.

According to Harshal, investors are likely to track companies exposed to fertilisers, agro-chemicals, farm mechanisation, irrigation equipment, and agri-logistics, where demand is increasingly driven by structural factors like higher cropping intensity, precision farming, and rural income normalisation.

A steady monsoon outlook and improving rural credit flow provide an added tailwind. The budget, therefore, is less about short-term sentiment and more about reinforcing a multi-year transition from subsidy-led support to productivity-led agricultural growth, believes Dasani.

Budget 2026: Four key things to watch out in the agri sector

Agri-spending

According to Abhinav Tiwari, Research Analyst at Bonanza, the Union Budget 2026-27 is expected to prioritize agriculture segment, amid ongoing challenges like climate variability, input costs, and market access. With India's agriculture sector contributing around 18-20% to GDP, the govt aims to push productivity, sustainability, and farmer incomes through focused allocations and reforms.

"We anticipate increase in agriculture budget from ₹1.37 Lac crore in 2025-26 to around ₹1.5 Lac crore. This could include higher funding for schemes like PM-KISAN, Pradhan Mantri Fasal Bima Yojana, and irrigation schemes under PM Krishi Sinchayee Yojana," said Abhinav Tiwari.

Kavach 4.0

Abhinav Tiwari believes that this budget is expected to rollout the Kavach 4.0, an advanced automatic train protection system and the electrification if remaining routes. The sector is also moving toward increasing the rail model share in freight from 26% to 45% by 2030.

New seeds bill

According to the Agriculture Minister's announcement, the government intends to present the new seeds bill during the budget session. This legislation will focus on the rampant sale of counterfeit and low-quality seeds, enforcing severe penalties, including fines of up to ₹30 lakhs and imprisonment for a maximum of three years. Its objective is to guarantee seed quality, safeguard farmers against losses, and enhance overall agricultural productivity.

As noted by Abhinav Tiwari, the bill may provide advantages to seed and fertilizer firms, such as Kaveri Seeds, Mangalam Seeds, and Bombay Super Hybrid Seeds within the seed sector.

For fertilizer companies, UPL Ltd, PI Industries Ltd, Sumitomo Chemical India, Bayer CropScience Ltd, and Dhanuka Agritech Ltd are expected to benefit.

Agri and food exports

India’s agri and food exports stand at ~USD 50–55 billion annually, but global trade disruptions and tariff-related barriers have emerged as a near-term challenge. According to Tushar Badjate, Director of Badjate Stock & shares Pvt Ltd, budget 2026 is expected to focus on export facilitation, faster approvals, and support for value-added agri products, helping farmers and agri companies gain better access to global markets despite tariff pressures.

Encouragingly, India’s logistics ecosystem has improved meaningfully — logistics costs have declined to ~13–14% of GDP, cold-chain capacity has expanded, and rural connectivity has strengthened, reducing post-harvest losses and improving price discovery, highlighted Badjate.

“From an equity perspective, a policy tilt towards crop protection, specialty chemicals and nutrient efficiency would be supportive for companies such as UPL and PI Industries, which are integrated with global supply chains. Integrated agri-input players like Coromandel International and Rallis India also stand to benefit from continued focus on efficiency-led growth,” said Tushar Badjate.

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