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High demand for medicinal plants in India

IBEF, Knowledge Centre

Dec 17, 2020 18:27

India has 15 agroclimatic zones that comprise ~18,000 types of plants, of which 6,000-7,000 have therapeutic properties. These medicinal plants are used in numerous applications in the Indian society and used to make medicines in traditional medical practices such as Ayurveda, Unani, Siddha, Sowa-Rigpa and homeopathy; also used in plant-based pharmaceutical companies. ~960 types of medicinal plants are traded, of which 178 species have yearly consumption levels of >100 metric tonnes. ~80% medicinal plants are extracted from the wild, while 69% plants are collected using destructive farming practices.

There is a huge gap between the supply and demand of medicinal plants to manufacture Ayurvedic medicines in India. According to the ‘All India Trade Survey of Prioritised Medicinal Plants, 2019’, demand for high-value medicinal plants increased by 50%, while the availability declined by 26%. This led to increased habitat degradation and levels of over-exploitation by pharmaceutical industries. This also resulted in 65 species (i.e., 10% of the total species) falling into the critically endangered, endangered, vulnerable, and nearly threatened categories.

For ayurvedic medicines, raw materials such as herbs and shrubs can be grown and harvested in a period of one year, while medicinal trees take >10 years to get ready for harvesting. Therefore, it is important to engage in conservation, cultivation, and research & development of medicinal plants.

Cultivation of medicinal plants in a commercial mode is one of the most profitable agri-business for farmers in India. If anyone has sufficient land and knowledge of herb marketing, then they can earn a high income with moderate investments. Cultivation of medicinal herbs such as shankhapushpi, atis, kuth, kutki, kapikachhu and karanja are changing the Indian agrarian ayurvedic scenes and providing extraordinary opportunities for farmers to increase their incomes. According to the traditional treatment health centre, there are 25 significant medicinal plants that are always in full demand. These plants include the Indian Barberry, Liquorice, Bael, Isabgol, Atis, Guggal, Kerth, Aonla, Chandan, Senna, Baiberang,  Long Pepper, Brahmi, Jatamansi, and Madhunashini, Kalmegh, Satavari, Ashwagandha, Chirata, Katki, Shankhpushpi, Ashoka, Giloe, Kokum and Safed Musli.

Market Scenario

The market for medical plants in India stood at Rs. 4.2 billion (US$ 56.6 million) in 2019 and is expected to increase at a CAGR 38.5% to Rs. 14 billion (US$ 188.6 million) by 2026. The total world herbal trade is currently assessed at US$ 120 billion. India’s share in the global export of herbs and herbal products is low due to unsophisticated agricultural and quality control procedures, lack of processing, research & development, standardisation in products and regulatory framework in trade of medicinal plants.

The export of herbs and value-added extracts of medicinal herbs has been gradually increasing over years. In 2017-2018, India exported US$ 330.18 million worth of herbs at a growth rate of 14.22% over the previous year. Also, exports of value-added extracts of medicinal herbs and herbal products in 2017-2018 stood at US$ 456.12 million, recording a growth rate of 12.23% over the previous year. The demand for herbal/value-added extracts of medicinal herbs is gradually increasing in foreign countries, especially in European and other developed countries.

Government Initiatives

The Government of India has taken several measures to promote cultivation and export of medicinal plants. The National Medicinal Plants Board (NMPB) offers up to 75% subsidy to farmers; formulates schemes and guidelines for financial assistance in various zones of medicinal plant divisions, secured under promotional and commercial plans, which are relevant for government and non-government associations.

The Department of Commerce has set up export promotion councils (EPCs) to promote exports of various product groups and has assigned Shellac & Forest Products Export Promotion Council (SHEFEXIL) to mandate exports of herbs and medicinal plants. The export promotion of several herbal products has been assigned to Pharmaceuticals Export Promotion Council (PHARMEXCIL). The EPCs facilitate the exporting community and undertake various promotional measures to promote exports of their products.

Under the Market Access Initiative (MAI) Scheme of the Department of Commerce, the EPCs/trade bodies are provided with financial assistance to participate and organise trade fairs, buyer–seller meets (BSMs), reverse buyer–seller meets (RBSMs), research & product development, market studies, etc.

The Merchandise Exports from India Scheme (MEIS) provides incentives to the exporting community for specified goods in order to counteract infrastructural inefficiencies and the associated costs of exporting products manufactured in India; thereby, giving special emphasis to these products which are of India’s export interest and have the capability to generate employment and enhance the country’s competitiveness in the world market.

The International Cooperation Scheme by the Ministry of AYUSH provides financial assistance to exporters to help them participate in trade fairs, organise international business meets & conferences and avail product registration reimbursements.

In November 2017, the National Medicinal Plants Board (NMPB), Ministry of AYUSH and Government of India launched a ‘Voluntary Certification Scheme for Medicinal Plants Produce (VCSMPP)’ to encourage good agricultural practices (GAPs) and good field collection practices (GFCPs) in trading of medicinal plants. The VCSMPP enhances the availability of certified quality medicinal plants and raw materials in the country. It also boosts exports and India’s share in the global export of herbs.

The Ministry of AYUSH through its quality certification programme such as ‘AYUSH’ and ‘Premium’ marks has been assisting the industry in setting up a quality of standard. In addition, it has also entered into a memorandum of understanding (MoUs) with a few countries to promote traditional medicines.

Future of Medicinal Plants Industry in India

In India, the production and cultivation of medical plants is mostly unorganised. An equipped supply chain management and formation of farmer associations will improve the production and sales of medicinal plants in the country. The sector has observed recent entries of start-ups bringing in technology upgradation. These start-up are using precise farming techniques by integrating artificial intelligence (AI) and data analytics for crop profiling, seed analysis for better germination, among others.