India’s burgeoning vegetable export sector, reveals a fascinating narrative of growth and opportunity. Exports of vegetables from India have reached US$ 2.1 billion in 2023, marking a notable 20.5% year-on-year increase.
The potential is undoubtedly bright, given India’s diverse agro-climatic zones and stature as the world’s second largest producer of vegetables. However, as we dive deeper, vegetable exports at present are far from performing according to their actual potential. This is due to several challenges, ranging from regulatory complexities to infrastructural limitations.
Our research takes a deep dive at India’s export performance in this sector, how it is positioned in the international trade landscape, contributing products/markets, key challenges and way forward.
India is a powerhouse in vegetable production due to several factors. Its diverse agro-climatic zones enable year-round cultivation of a wide variety of vegetables. Additionally, the country boasts a large agricultural workforce skilled in traditional farming methods alongside modern agricultural practices. India’s rich biodiversity also contributes to its vegetable diversity, with indigenous crops catering to domestic tastes and preferences. Furthermore, the government’s initiatives to promote agricultural exports and improve infrastructure, coupled with favorable trade policies, position India as a promising export destination for vegetables.
India’s exports of vegetables (HS 07, edible vegetables and certain roots and tubers), reached a value of US$ 2.1 billion in 2023, an impressive YoY growth of 20.5%. On a 5-year basis, exports have grown at a CAGR of 8.45%, which makes this performance truly remarkable. On the other hand, processed vegetable exports have grown by 27.1% YoY to reach a value of US$ 596.11 million. In this analysis, we examine the key drivers of India’s growing vegetable exports and the future prospects.
Production of vegetables
India is the second largest* vegetable-growing country in the world and holds 10.6% share in world’s vegetable production. Its rich and diverse climate provides a large variety of vegetables. Vegetables produced in the country include potatoes, tomatoes, onions, eggplants, and cabbages among others. It is the largest producer of vegetables like ginger and okra and the second largest in the case of vegetables like potatoes, onions, cauliflowers, brinjal, and cabbages (APEDA). Major vegetable producing states (2022-23) in the country include Uttar Pradesh, West Bengal, Madhya Pradesh, Bihar, Gujarat, Maharashtra, and Odisha.
According to the National Horticulture Database (1st Advance Estimates) published by National Horticulture Board for 2023-24, India has produced about 209.4 million metric tonnes of vegetables. The area under vegetable cultivation was about 11.24 million hectares. Furthermore, it estimates that there will be an increase in production of vegetables like cabbage, cauliflower, pumpkin, tapioca, tomato, and other vegetables. This large vegetable production base provides India, immense export opportunities.
An interesting point to note is that the productivity of horticulture has increased impressively from 8.8 tonnes per hectare (TPH) in 2001-02 to 12.1 TPH in 2020-21, with production and acreage far better than foodgrain production since 2012-13.
The top 10 vegetable producing countries in the world are China, India, Nigeria, the Dominican Republic, the United States, Indonesia, Thailand, Ghana, Russia, and Turkey. While China produced over 616 million metric tons of vegetables in 2022, India produced about 138 million metric tons. Interestingly, China accounts for over 50% of the world’s fresh vegetable production.
Global vegetable exports reached a value of US$ 84.9 billion in 2022, with a 4-year CAGR of 5% (ITC Trade Map). The top exporters were China (12%), Mexico (11%), Netherlands (10%), Spain (10%) and Canada (7%).
Source: ITC Trade Map, figures in US$ billion for 2022
India’s rank in global exports was 13 with a value of US$ 1.7 billion (2% share) with a CAGR of 10% in 2022. In comparison to the top countries, this is lower than Australia (20%, #12), Turkey (18%, #9), Thailand (16%, #9) and Canada (11%, #5).
When it comes to imports, the top markets are the US (16.7% share), Germany (8.2% share), the UK (4.9% share), France (4.5% share) and China (4.4% share). India was ranked 11th in imports with a value of US$ 1.9 billion (4-year CAGR of 16%). China is incidentally also the fastest growing import destination during the same period with a 4-year CAGR of 21%.
Now we look at India’s latest export data and trends over the past 5 years. As mentioned earlier, India’s total fresh vegetable exports were valued at US$ 2.1 billion. The top export markets were Bangladesh (US$ 463.8%, ↑125.1% YoY), UAE (US$ 239.8 million, ↓ 5.1%), Malaysia (US$ 114.1 million, ↓5.4% YoY) Following is the break up of India’s top markets.
Source: DGCIS figures for 2023
When it comes to products, the largest exported products are HS 0713 (Dried leguminous vegetables, US$ 704.5 million, ↑24.45% YoY); HS 0703 (onions, shallots, garlic…, US$ 670 million, ↑25.8% YoY); HS 0712 (dried vegetables, US$ 211.3 million, ↑1.8% YoY) and HS 0709 (other vegetables, fresh or chilled, US$ 157.4 million, ↑11.04% YoY). At the 8-digit level, the data reveals the predominance of onions (fresh, chilled or dried, 24.7%); lentils (mosur, 8%); kabuli chana (6.8%) potatoes (5.1%) and cucumbers & gherkins (4.4%).
It is well known, however, that onion exports are subject to vagaries of production and government often has to intervene to keep prices in check. The most recent instance of this was December 2023. Even though the government has now removed the ban, it has imposed stringent conditions – a minimum export price of $550 per tonne as well as a 40% export duty.
When you look at the global market dynamics, India’s top 10 markets are very different from the global top 10 import markets, with the exception of the US, China and the UK. Moreover, India’s share in the top products imported by the world is very low, as is visible in the table below:
Top imported products globally in the fresh vegetables category
Source: ITC Trade Map
As the table above indicates, India’s share is quite significant in the case of onions/shallots (12.5%), while it has a more modest share in potatoes (2%) and lentils (1.7%). On the other hand over a 4-year period, India’s exports of dried/shelled peas (CAGR of 160%); dried/shelled leguminous vegetables (CAGR of 111%), dried/shelled lentils (CAGR of 37%); dried/shelled beans (CAGR of 35%) and dried vegetables & mixtures (CAGR of 16%) hold promise.
Government and industry stakeholders have been working in tandem to address India’s current low share of vegetable exports from India. Some of the main challenges identified are smaller operational landholdings, production challenges, fragmented supply chains, insufficient storage facilities, sub-par transportation infrastructure.
On its part, the government is providing comprehensive coverage under Pradhan Mantri Fasal Bima Yojana, which covers losses against natural risks, from pre-sowing to post-harvest stages. Ministry of Food Processing Industry has launched a series of initiatives that include the development of cold storage infrastructure, agro processing clusters, backward and forward linkages, etc. Moreover, India is promoting sea protocols for exports of various fruits and vegetables to promote their exports via ocean routes. So far, most of these exports are happening by air due to lower volumes and different ripening periods. However, this reduces their international competitiveness due to higher freight rates.
Apart from this, exporters have to cater to MRL standards, which vary across markets, and are especially stringent in markets like EU and Japan, according to an industry source. He also adds that one product that has achieved success for India in this regard is grapes, where producers in Nashik are so well aligned that they can easily cater to various import requirements as per destination markets, with complete end-to-end traceability. The same needs to be replicated to encourage India’s vegetable exports as well. Finally, India needs to work on diversifying its vegetable exports and look at products with untapped potential for promotion in lucrative markets.
Are you an exporter looking to enhance your presence in the international market? Connect with TPCI’s research team at researchdesk@tpci.in for tailored research support and insights. Let our expertise guide you towards unlocking new opportunities and expanding your global reach. Reach out today and embark on a journey towards export success!
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