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Report Highlights:

India’s organic food and beverage consumption has grown in recent years due to its advanced demographic dividend, improved purchasing power and increased interest for the perceived health and wellness benefits of
certain organic products. In market year (MY) 2019, organic food and beverage retail sales reached $69 million and is estimated to further rise by 12 percent to $77 million in MY 2020. Further propelled by a surge
of demand in the wake of the COVID-19 pandemic, India continues to be an emerging market for organic food and beverages with robust prospects. With predicted favorable weather patterns, monsoons and a strong focus
by the Indian government towards exports to fill U.S., European Union (EU) and South Asia demand, India’s certified organic cropland will likely increase.

Market Summary…

India is home to 30 percent of total certified organic producers in the world, but accounts for just 3.3 percent (1.9 million hectares) of total organic cultivated area at 57.8 million hectares. A burgeoning middle class with
higher disposable incomes, rapid urbanization, elevated concerns for the safety and quality of food and a growing niche of consumers embracing wholesome or naturalistic lifestyles are all factors driving domestic
organic food consumption. India’s organic food sector is expected to grow at a compound annual growth rate (CAGR) of 10 percent in the MY 2016-2021 period from US $386.32 million in 2015 and reach US $10.75 billion mark by 2025. In the last few years, contribution to the growth in the Indian organic foods landscape has included various national level schemes to encourage organic farming, initiating new exports from the remote North East region, and improved market linkages of producer clusters with agribusiness,
phytochemical, organized retail and e-commerce firms.

However, the Indian organic food industry is curtailed by multiple challenges including reduced farm production per hectare, a general apprehension among farmers to forego the use of chemical fertilizers and
pesticides and higher storage and transportation costs due to the lack of preservatives required for long-term storage. These complexities all result in higher food prices for consumers, thereby attracting only a niche
segment of customers. Another prominent factor exacerbating the challenge of Indian organic agriculture is waste due to ample supply, demand that is confined from largely urban centers and often inaccessible for many producers and other supply chain inefficiencies.

Organic Farm Production…

India’s MY 2018-19 organic area accounted for 1.08 percent of total agricultural land and reached 1.93 million hectares, an 8.8 percent increase from 2017 (Figure 1). This excludes 1.49 million hectares for wild harvest
collection. The states of Madhya Pradesh, Rajasthan, Maharashtra and Uttar Pradesh have the largest area with organic certification. Furthermore, Sikkim, a north-eastern province in India declared itself the first “organic
state” of the world, as all its farmland (76,000 hectares) has been certified organic since 2015. Primary crops grown in the state are fruits (Sikkim mandarin, pear, guava and kiwi); spices (ginger, turmeric and cherry
pepper), flowers (cymbidium orchids, anthurium and rose) and mushrooms.

In MY 2019, 453,622 farmers were practicing organic farming under the Participatory Guarantee System (PGS India) and 1.14 million farmers were registered under third party organic certification. With predictions of a
normal monsoon at 96 percent of the long period average from the Indian Meteorological Department, and a lower probability of deficient rainfall both indicate that India’s reservoirs and ground water levels will rebound
(IMD Press Release April 15, 2020). This will likely result in improved production and farmers will see opportunities to transition to organic and reduce the use of pesticides or other non-organic fertilizers

Source: USDA, Foreign Agricultural Service

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