India’s Organic Industry Market Report : 2020-21 Prospects for Organic Foods

Organic Crop Production:

India’s APEDA reports that in MY 2020/2021 organic crop production reached 3.2 million metric tons (MMT), up 36 percent compared to MY 2019/2020. Oilseeds, fiber crops (cotton), sugar, cereals, and millet are the major organic crops being produced in India

In 2020/2021, the Indian state of Madhya Pradesh was the country’s largest organic producer. Production increased by volume 28 percent compared to the previous year. However, during this same period, Maharashtra state saw a decrease of 17 percent due to disruptions in the organic cotton supply chain. Production in Karnataka at the same time skyrocketed 201 percent. Production in Rajasthan and Uttar Pradesh jumped by a more measured 41 and 32 percent respectively. This excludes approximately 37,000 MT of cumulative organic production for Indian farms under organic conversion.

India, Organic Products Consumption ($ million):

Indian retail growth significantly declined during the COVID-19 pandemic and related national lockdowns. However, India’s mom-and-pop stores (kirana) and e-commerce (hyperlocal food delivery companies) became the mainstays supporting Indian consumers, especially in Tier II and III cities¹².

Organic product supply and distribution throughout the pandemic has remained unfazed despite some temporary disruptions. Sales increased thanks to shifting consumer behavior, with a growing positive perception of organic products. Categories that gained the most included essential foods such as organic eggs, dairy, and fruits and vegetables. Despite the 2020/2021 COVID-19 national lockdowns, retail sales of organic foods surged from March 2021 on wards. Driving demand for organic products is a growing number of consumers perceiving these products as offering improved immunity, better quality, and increased availability through online/eCommerce channels.¹³ Organic teas, condiments, dressings, sauces, and fruit nectar’s are the most consumed organic packaged food and beverage categories.

Prospects for Organic Foods:

The Indian organic food and beverages sector is still at an emerging stage. It is nonetheless rapidly developing due to growing consumer demand. This growth is attributed to increased consumer attention on healthy eating due to the pandemic, new consumer-oriented products, wider availability across cities, and the new brands selling organic products. In recent years, the Participatory Guarantee System has enabled the entry of many smaller sized companies (private label or new entrepreneurs), thereby increasing price competition.

A growing emphasis on healthy and immunity building foods will continue to drive demand for imported organic food and beverage products, led by categories like organic teas, juices and apple cider vinegar. Organic dairy products and fruits and vegetables maintain the highest growth potential in the Indian market.

Nevertheless, many challenges remain for foreign companies exporting to India given the government’s move toward “self-reliance,” including for organic food and beverage products. Despite the market size and growth potential, exporters and investors may continue to face non-transparent and often unpredictable regulatory challenges in India’s organic sector.

Source: USDA & APEDA

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