India’s Fruits and Vegetables Industry

The Indian Fruits and Vegetables Industry

India is the second largest producer of the fruits and vegetables in the world after China. The country has diverse topography and climate, which ensures availability of fruits and vegetables in every season. During 2021-22, India produced 204.61 million metric tonnes of vegetables and 107.10 million metric tonnes of fruits. The area under cultivation of fruits stood at 7.09 million hectares in 2021-22, while vegetables were cultivated at 11.28 million hectares. In addition, India leads the world in the production of ginger and okra, along with banana, papaya, mango and guava.

Production and export of Indian fruits and vegetables have increased in recent years. During 2021-22, India exported fresh fruits and vegetables worth US$ 1.527.60 million, which comprised fruits worth US$ 750.7 million and vegetables worth US$ 767.01 million. India mostly exports to its neighbours, namely the UAE, Bangladesh, Pakistan, Saudi Arabia, Sri Lanka and Nepal. India's global market share is still only about 1%, but its horticulture products are becoming increasingly popular due to advancements in cold chain infrastructure, research, contemporary post-harvest technologies, supportive governmental policies and quality control procedures.

Production of Fruits and Vegetables in India
According to the United Nations' Food and Agriculture Organization (FAO), India was the world's second-largest producer of fruits and vegetables. India’s food industry is large, and the biggest fruit-producing states are Andhra Pradesh, Maharashtra, Madhya Pradesh, Uttar Pradesh, Tamil Nadu, Karnataka and Gujarat. The major vegetable-producing states are Uttar Pradesh, Madhya Pradesh, West Bengal, Bihar, Gujarat, Odisha and Maharashtra.

Fruit production in India increased to 107.10 million tonnes in 2021-22 from 97.97 million tonnes in 2018-19, at a CAGR of 3.0%. Further, the vegetable market production expanded by 3.8% CAGR to 204.61 million tonnes during this period.

Fruits and Vegetable Exports from India
The large production base provides India significant export potential. It exported fresh produce worth Rs. 11,412.50 crore (US$ 1,527.60 million) over 2021-22, with fruits valued at Rs. 5,593 crore (US$ 750.7 million) and vegetables at Rs. 5,745.54 crore (US$ 767.01 million). During this period, processed fruits and vegetables (including pulses) were exported for a total of Rs. 12,858.66 crore (US$ 1,724.88 million), of which Rs. 8,308.04 crore (US$ 1,114.19 million) and Rs. 4,550.62 crore (US$ 610.69 million) were processed vegetables, including pulses.

The major fruits exported are grapes, pomegranates, mangoes, bananas and oranges, while the major vegetables exported are onions, mixed vegetables, potatoes, tomatoes and green chilies.

According to preliminary data from the Directorate General of Commercial Intelligence and Statistics, processed fruits and vegetables saw considerable growth of 51% between April and July 2022 compared to the same period last year, while fresh fruits and vegetables saw an increase of 3.79%. Fresh fruit and vegetable exports totalled US$ 498 million during this period, rising to US$ 517 million in the comparable months of the current fiscal year. In the first four months of the current fiscal year, processed fruits and vegetables exports more than doubled to US$ 665 million from US$ 441 million in the equivalent months of the previous year.

Government Initiatives to Promote Exports of Fruits and Vegetables
Fruits and vegetables are significant components of the agricultural and industrial economies. Due to their significance for the country’s economic growth, the government has announced several changes to improve opportunities in the fruits and vegetables industry and encourage exports. Some of these reforms are listed below:

• 100% Foreign Direct Investment (FDI) permitted for the food processing sector:
  The government had approved 100% FDI under the automatic route in the food processing sector. The intention was to make the FDI policy more investor friendly and remove the policy blockages hampering the investment inflows into the industry and the country.
• Agriculture Export Policy (AEP):
  The Government of India released its Agriculture Export Policy in 2018, emphasising agriculture export-oriented production, export promotion, greater farmer realisation, and synchronisation with government policies and programmes. The AEP places importance on farmer-focused mobile applications. During implementation of AEP, considerable progress has been made in giving Farmer-Produce Organizations (FPOs) and farmers a stake in the export of their produce. Due to the need to serve foreign markets, direct connectivity of FPOs/farmers with the export market has boosted farmers' incomes and led to better farming practices.
• Direct Involvement of Farmers in Exports:
  • Farmer Connect Portal – On the Agricultural and Processed Food Products Export Development Authority (APEDA) website, a Farmer Connect Portal has been created to provide FPOs/ Farmer Producer Companies (FPCs) and cooperatives a platform to communicate with exporters. There are currently 2,360 FPOs/FPCs and 2,324 exporters registered in the portal.
  • Traceability Systems – Traceability to the farm level is essential to guarantee the quality of exports and establish India as a trustworthy provider of high-quality goods. Many digital platforms for traceability have been created to facilitate easy business flow and ensure system transparency.
    • HortiNet-Mango: More than 38,000 farmers and over 66,000 farms have been registered.
    • HortiNet-Vegetables: The system covers 43 vegetables. To date, over 10,000 farmers and 10,000 farms have been registered.
    • HortiNet-Citrus Fruit: This system was implemented in July 2018. So far, a large number of farmers and farms have been registered.
• Addressing Transport and Logistics Issues:
  • In order to help farmers and producers transport their agricultural products from rural areas to major towns and cities, the Indian Railways has introduced the Kisan Rail service, under which trains are run with multiple commodities (perishables, agriproducts and seeds), consignors and consignees. The Indian Railways has run 157 Kisan Rail services on 18 routes thus far to transport perishable goods such as fruits, vegetables and other foods.
  • The Ministry of Food Processing Industries (MoFPI)’s Operation Greens (TOP to TOTAL) programme provides 50% subsidy on the Kisan Rail delivery of fruits and vegetables.

Outlook

India's food processing sector is one of the largest in the world and has gained prominence in the recent years. The availability of resources and encouraging government policies have contributed significantly to the industry's expansion. Fruits and vegetables are the key sub-segment of this industry. For 2022-23, the government has fixed an export target of US$ 23.56 billion for the agricultural and processed food industry, 40% of which has already been achieved in the first four months of this year. South Asian & Middle Eastern countries have been the major destinations for India’s fruits and vegetables. However, it has huge potential to increase its presence in untapped markets in the near future.

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