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Fruit industry in India: Growth and emerging trends
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Friday, 18 February, 2022, 12 : 00 PM [IST]
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Pankaj Khandelwal
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The horticulture sector in India plays a huge role in the country's agricultural GDP, accounting for 33 percent of the total cropped area. The second-largest producer of fruits and vegetables in the world, Indian horticulture sector has enormous export potential.
A growing demand for nutritious, quality and relatively more expensive horticulture produce has been caused by rising domestic and global per capita incomes, as well as increasing health consciousness. The changing scenario encourages private investment, to go for hi-tech horticulture with micro-propagation, protected cultivation, drip irrigation, fertigation, and integrated nutrient and pest management, besides making use of latest post harvest measures particularly in the case of perishable commodities.
During the last few years, India's horticulture area has continued to expand. According to the Department of Agriculture and Farmers Welfare, the 2020-21 (Third Advance Estimates) show an estimate of 331.05 million tons of produce from different horticultural crops over the next two years out of which production of fruits is estimated to be 103.0 million tonnes and production of vegetables is estimated to be 197.2 million tonnes.
Both the crops have shown remarkable growth compared to 2019-20. As of 2021, fresh fruits are the leading export from India, accounting for over 56 billion rupees in value. In terms of production, India dominates the market for bananas, mangoes, guava, lemons, and papaya.
The global fruit trade has not only seen an increase in volumes and value, but the variety of fruits being traded has also grown creating more opportunities. The countries that benefitted from this trend are Mexico, Peru, Vietnam, Turkey, and Thailand. According to Fresh Plaza Asia, Southeast Asia is recording fast growth in the global fresh fruit market.
As a result of its high production of tropical fruits, India holds a 30% share in global production. However, according to data issued by the FAO, India has a meager 0.5% share in global trade, despite its 10.9% share in fruit production. This percentage sounds abysmally low given that about 9% of fruits grown are exported. Currently, UAE, the Netherlands, Saudi Arabia, Bangladesh, the US, UK, and Russia are the top destinations for Indian fruit exports.
India has generated impressive banana production trends with more acreage of land being added, resulting in a 14-fold increase in the last 50 years and a more than 3-fold increase in the last 25 years. The largest producer, with 32 million tonnes of bananas produced per year, contributed only 0.61% to global trade in 2020-21. It exported bananas valued at $99 million to countries in West Asia.
In addition to being the second largest producer of fruits in the world, India is also widely known as the "fruit basket of the world". As a result of abundant raw materials and favorable Government policies such as Pradhan Mantri Kisan Sampada Yojana (PMKSY), Indian fruit industry enjoys a conducive growth environment. A rising standard of living coupled with rapid urbanization resulted in lifestyle changes, leading to a substantial increase in the preference for fresh fruits.
However, a number of obstacles, including inadequate infrastructure, and the higher cost of processed fruits are impeding its growth. The lack of quality and safety practices in production and packaging are the primary reasons why Indian fruits don't reach export markets in significant quantities. To overcome these challenges, a paradigm shift in the way agriculture business is approached will be needed backed up by technology.
The biggest challenge faced by the fruit industry is perhaps the limited availability of fruits. Since India has a low per capita availability of fruits, many of these make their way to retail markets, which leaves little for processing. When fruit supply is inconsistent, the industry is unable to make sure that its customers are supplied. They are reduced to marginal players just processing table varieties and filling the void left by crop failures in other parts of the world.
Over the past couple of years, with the Westernisation of Indian society and the growing number of health conscious consumers, the demand for imported fruits has increased in the country. The well-traveled and well-heeled Indian consumer is supplying a surge in demand for exotic produce to importers and retailers. The popularity of exotic fruits stems largely from a change in consumer habits and the many health benefits they offer. Because exotic fruits have wonderful flavors and a whole lot of health benefits, a growing number of consumers include them in their daily diets.
There are several fruits imported in large quantities, including Fuji apples, as well as other varieties of green apples, red grapes, dates, berries, kiwi fruits, mandarin oranges, pomelo, and other citrus fruits. To promote this small but significant sector, the Indian government announced it would provide local farmers with seeds and saplings of exotic food ingredients. In order to reduce the prices of exotic fruits and to allow consumers to enjoy their health benefits, many farmers are considering the cultivation of these fruits in their own backyards or farms.
In recent years, global lifestyles have changed rapidly, especially with the onset of the Covid-19 pandemic, food preferences have changed, and the focus has shifted to consuming both nutritious food and quality food in order to promote good health. Fresh produce has largely replaced processed foods as the preferred option; customers are willing to spend more for better quality and increasingly demanding transparency on production and supply chain. As the emphasis shifts to safety and health, consumers are more aware of what they consume.
As a result, companies and growers are increasingly focused on branding beyond the logo and adding value through packaging, communication, traceability, and block-chain to their products. The rise in branded fruits has become an emerging trend now. The recent developments on technology driven grading-sorting systems, automation, hand-held quality control devices, make it possible to guarantee fruit's taste and eating experience to meet brand promise and consumer expectations.
Consumers are increasingly demanding safe and healthy foods, urbanisation and corporate farming are taking over, and packaged foods are gaining in influence and scale, creating a massive market for India to become the global hub for fruits.
(The author is chairman and managing director, INI Farms)
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