Tamil Nadu is considered to be one of the best states in India for agriculture, but what are the advantages of investing in farmland in the region?
Investing in farmland in Tamil Nadu comes with a lot of advantages such as:
- High financial return
- Growing cash crops
- Loose restrictions
- Tax-free industry
- Thriving agricultural sector
- Cheap land
- Expansive real estate options
- High GDP
After extensively researching India’s economy and agricultural regions, I have been able to gather enough information to determine the advantages of investing in farmland in Tamil Nadu. My research has indicated that although Tamil Nadu is one of the most promising states in all of India for agriculture, you should thoroughly inspect any parcel you are considering to ensure that it is in line with your long-term investment strategy.
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Advantages: Farm Land Investments in Tamil Nadu
There are more people looking to invest in farmland in Tamil Nadu than ever before. This Indian state is widely recognized as one of the best regions in the country for farming but what encourages so many people to invest in Tamil Nadu?
Investing in farmland in Tamil Nadu comes with a lot of advantages and understanding them will help you make an informed and profitable decision on your agricultural land purchase.
High Financial Return
The key goal of any real estate or business investment is to receive a solid financial return. Landowners that have invested in agricultural property in Tamil Nadu have seen consistent financial returns over the years, which is the first and most important advantage of buying farmland in this Indian state.
Tamil Nadu is currently one of the safest and most reliable regions in India that you can invest in for agriculture. Virtually all farmers that have established themselves in Tamil Nadu have high profit margins and are receiving a great return on their investment.
Agriculture can be a very promising investment, regardless of what you are growing. However, farming cash crops can particularly be profitable given that you earn more for every harvest.
Tamil Nadu is a region suitable for growing various types of cash crops. Depending on your investment strategy in Tamil Nadu, you may find that one of the following cash crops is suitable for your agricultural operation:
Capitalizing on the right cash crop can make all the difference in how much you profit on your agricultural land in Tamil Nadu.
Either of the above-mentioned cash crops will be reliable for farming, but you should carefully consider the ecology of the area before you make a commitment to a specific type of cash crop. Farmland in Tamil Nadu is a very attractive financial investment, but you need to ensure that you are picking the right kind of crop for your operation.
Tamil Nadu has relatively loose restrictions, which means less red tape for investors and business prospects. It’s not uncommon to encounter regions in India that have very strict regulations on who is allowed to buy agricultural land and what kind of crops can be grown there.
In Tamil Nadu, you can pursue an agricultural investment without being from the actual state. This encourages a lot of people throughout India to seek out farmland in Tamil Nadu, as you are not excluded from the market. This is a particularly important advantage given that virtually all other states in India require you to be a farmer to buy agricultural land.
In addition, you are given a lot of freedom to decide exactly what you want to grow. Unlike other regions in India that specifically focus on grain production, you can choose to capitalize on whichever cash crop you find more profitable and advantageous.
Taxes play a key role in a lot of investment decisions, as they can vary throughout different parts of India. Heavy taxes are imposed on various industries in the country and you can end up paying a lot to the government if you set up your business in the wrong location.
With that said, virtually every industry in India requires you to pay tax - except for farming. By setting up a farming operation anywhere in India, you can profit without having to pay taxes. The reason why this is such a game-changer for Tamil Nadu is that you can buy agricultural land without actually being a farmer and you can also do so as someone from outside the state.
A driving force behind agricultural investments in Tamil Nadu is that you can establish a farming operation, make solid profits, and never have to pay taxes.
Thriving Agricultural Sector
A lot of people are interested in buying farmland in Tamil Nadu because the region is regarded for its thriving agricultural sector. Roughly 70% of all people living in Tamil Nadu participate in some kind of farming practice.
The main reason for this is that the region is essentially set up for farming with an expansive selection of land that is suitable for food production. As farming in Tamil Nadu has increased over the years, the state has become one of the agricultural capitals of all of India.
Agricultural land in India can vary in price - with cheaper land parcels often being less promising for long-term farming investments. However, Tamil Nadu is a particularly popular region for buying farmland because, not only is the state suitable for agriculture, but the price of real estate is quite cheap.
You can buy a hectare of agricultural land in Tamil Nadu at just ₹ 170 per sq. ft. This offers a lot of incentive for people to seek out farming operations in Tamil Nadu, as it takes less upfront costs to get the investment in motion.
Expansive Real Estate Options
Despite Tamil Nadu being a very popular state in India for farming, there are still a large number of parcels available on the market in attractive locations. Investors have an expansive selection of real estate options to consider when seeking agricultural land.
This gives investors a lot of flexibility to weigh out parcels on the market that are the most aligned with their real estate and business strategy.
In addition, the expansive number of land options also drives down the price of farmland in the region. With less competition and more land options available, the price of farmland has continued to stay very reasonable over the years.
Tamil Nadu is one of the wealthiest regions in all of India. It currently ranks second for the state with the highest GDP and all of the region's wealth comes specifically from farming.
Investing in farmland with a high GDP comes with financial security. Tamil Nadu has a lot of stability, which makes it a safe region to invest in agriculture. The current estimated GDP for 2022 to 2023 is a staggering $330 billion.
I also noticed that the GDP of the state continues to increase annually. There has been an increase of 14% from 2021 to 2022 in Tamil Nadu’s GDP - with this figure expected to continuously rise in the coming years.
Factors to Consider
Buying farmland in Tamil Nadu comes with a lot of advantages and the pros certainly outweigh the cons. However, much like with any business investment, buying farmland in Tamil Nadu should be approached with care and consideration.
That is why you should consider the following factors before you make any commitments to a land parcel in Tamil Nadu.
No Residential or Commercial Developments
Agricultural land in Tamil Nadu is zoned specifically for farming. This means that investors are not allowed to pursue alternative types of developments.
With that said, while this law is in place, that does not mean that you cannot buy farmland and flip it for profit. Just because the land is set up for farming does not necessarily mean that you have to practice agriculture.
High Stamp Duty & Registration Fees
Although the majority of parcels in Tamil Nadu are quite reasonably priced, the state does impose a high stamp duty and registration fee on agricultural investors. If you are buying farmland in Tamil Nadu, you can expect to pay the following:
- 7% stamp duty
- 4% registration
This amounts to an additional 11% on top of your purchase, which can be a red flag for a lot of investors.
Restricted Land Size
Tami Nadu has a regulation that specifically limits the size of any land purchase to 59.95 hectares.
While this is a reasonable size for most agricultural investors, some people may find it to be a limitation on their business strategy.
About THE AUTHOR
Brittany has been in the land business since 2020 when the world was starting to shut down. Since then, we’ve sold to dozens of people from ATV weekend warriors to camping enthusiasts to retired truck drivers. Our inventory spans mostly in the western United States. We’ve been trained by experience, land acquisition courses, and hundreds of hours meeting with county assessors and clerks, zoning officials, realtors, and land investors. We’ve answered hundreds of questions from people regarding the buying and use of land.Read More About Brittany Melling