The global demand of Indian coffee is witnessing a significant upsurge, leading to remarkable growth in exports. In the first half of the fiscal year 2025, India registered coffee exports worth ₹7,771.88 crore, a massive 55% increase compared to ₹4,956 crore in the same period of the previous year.
This extraordinary rise highlights the growing global demand for Indian coffee, marking a crucial moment for the country’s agricultural sector and its coffee industry in particular.
Global Surge in Demand of Indian Coffee
The surge in demand for Indian coffee is not only limited to the volume of coffee exported but also in the prices coffee buyers are willing to pay. During the April-September 2024 period, India exported 2.2 lakh tonnes of coffee, compared to 1.91 lakh tonnes in the same period last year, marking a 15% increase in volume.
This rising demand is supported by increasing international coffee prices, which have spurred buyers to pay an average of ₹352 per kilogram for Indian coffee, a substantial increase from ₹259 per kilogram previously.
This rise in global demand has been fueled by several factors, including the quality of Indian coffee, growing consumption trends worldwide, and possible export regulations in Europe that have created a more competitive market.
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Indian coffee has consistently been known for its distinct flavor profiles, which are characterized by mild acidity and strong body, making it particularly attractive in European markets.
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Additionally, the increase in demand is not only a testament to the growing popularity of Indian coffee but also an indicator of the expanding coffee culture in both developed and developing countries.
As consumers become more knowledgeable and discerning in their coffee choices, they are more likely to seek out high-quality products like Indian coffee, which is often regarded as a premium option.
Coffee Export Market: A Key Driver for India’s Agriculture
India’s coffee export market plays a vital role in driving the growth of the nation’s coffee industry. Karnataka is the heart of India’s coffee production, accounting for about 70% of the total output, followed by Kerala, which contributes 20%, and Tamil Nadu with a 5.7% share.
These states have established themselves as the primary coffee-producing regions of India, where robusta and arabica coffee varieties flourish due to favorable climate conditions and soil types.
The export market has grown significantly over the past few years. In 2021-22, Indian coffee exports stood at $1.016 billion, marking a 38% growth compared to the previous year. This rapid growth has firmly placed India as the fifth-largest coffee exporter in the world, with a 6% share of the global coffee export market.
Italy remains the top importer of Indian coffee, accounting for 20% of the country’s total coffee exports. Other major markets include Germany, Russia, the UAE, and Belgium, collectively importing 45% of Indian coffee.
These countries are traditional coffee-loving nations, where the rich and aromatic flavors of Indian coffee have found a loyal consumer base.
Furthermore, the coffee export market has been pivotal in sustaining livelihoods for millions of farmers in India. The coffee-growing regions, particularly in Karnataka and Kerala, rely heavily on the export market to generate revenue. With increasing global demand, there is an opportunity for the industry to further grow and provide more opportunities for farmers to improve their income and living standards.
Future of Indian Coffee in a Growing Global Market
As the global coffee market expands, India is poised to continue benefiting from the rising demand for its coffee. However, the future growth of Indian coffee exports will depend on how well the country can navigate the challenges posed by international market dynamics and domestic production limitations.
One of the key challenges is the anticipated export regulations in Europe, which could affect the ease with which Indian coffee is sold abroad. European nations have long been major importers of Indian coffee, and any restrictive regulations could impact future growth.
In addition, fluctuating international coffee prices could make it difficult for Indian exporters to maintain steady profits, as price volatility may hurt both buyers and sellers in the global market.
Domestically, Indian coffee production needs to keep pace with increasing demand to ensure sustained export growth. India’s coffee production in 2023-24 was estimated at 3.6 lakh metric tonnes, but there is potential for more growth, especially if new technologies and farming methods are introduced to increase yields.
The government and industry stakeholders must work together to ensure that coffee farmers have access to the resources they need to maintain and improve their productivity.
At the same time, the coffee industry in India will also need to adapt to changing consumer preferences. As coffee drinkers become more conscious of sustainability, there will likely be greater demand for eco-friendly and ethically produced coffee.
India’s coffee producers must therefore focus on sustainable farming practices, ensuring that their products align with global trends and meet the expectations of environmentally conscious consumers.
India’s position in the global coffee market is secure, but future growth will require strategic planning and innovation. By staying ahead of market trends and focusing on quality, sustainability, and productivity, India can continue to increase its share of the global coffee market and build on its success as one of the world’s leading coffee exporters.
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