In fiscal year 2023-24, India’s food and beverage(F&B) exports faced a decline due to factors like the Red Sea crisis and the Russia-Ukraine war. Domestic restrictions on key food commodities such as rice, wheat, sugar, and onions, aimed at addressing food security concerns, also contributed to this drop.
Despite these challenges, processed food exports remained strong, showing a 13% year-on-year growth. Indian processed and packaged food exporters should leverage this momentum and explore emerging global market trends.
India’s food and beverage(F&B) exports in 2022-23 reached a record US$ 48.6 billion, up from US$ 33.4 billion in 2019-20. However, FY 2023-24 saw a 10.1% decline to US$ 43.7 billion, with a 5-year CAGR of 5.5%. Exports of prepared foodstuffs (HS 16-22) fell by 23.4% year-on-year to US$ 8.1 billion, but still had a strong 5-year CAGR of 12.6%. This research analysis will explore these trends in India’s food and beverage exports, with a focus on the processed food category.
Several factors including the Red Sea crisis, the Russia-Ukraine war, and export restrictions on critical items such as rice, wheat, sugar, and onions, accounted for a drop in exports. Data from Ministry of Commerce & Industry reveals that year-on-year exports declined for various agri commodities including rice(other than basmoti), wheat, pulses, cashew, niger seeds, vegetable oils, castor oil, other oil seeds, shellac, sugar, mollases, dairy products and marine products.
| S. No. | Commodity | Exports (2022-23) | Exports (2023-24) | % Growth |
|---|---|---|---|---|
| 1. | Marine products | 8,038.70 | 7,371.99 | -8.52 |
| 2. | Rice (other than Basmati) | 6,390.71 | 4,573.41 | -28.05 |
| 3. | Sugar | 3,770.83 | 2,824.74 | -31.05 |
| 4. | Castor Oil | 1,205.04 | 1,071.55 | -15.34 |
| 5. | Pulses | 601.40 | 644.55 | -2.55 |
| 6. | Other cereals | 1,194.07 | 517.79 | -50.64 |
| 7. | Dairy products | 587.15 | 468.81 | -20.15 |
| 8. | Vegetable oils | 438.37 | 422.31 | -3.66 |
| 9. | Cashew | 336.31 | 339.20 | -4.80 |
| 10. | Milled products | 289.02 | 172.87 | -40.19 |
| 11. | Wheat | 1,320.40 | 507.44 | -96.27 |
In FY 2024, wheat exports declined significantly by over 96% YoY, followed by other cereals that declined by -56.64%; sugar exports fell by -51% while rice xports decreased by -28%.
However, amidst the decline in export of various agri products there were also some significant segments that witnessed growth over the previous year. These included fruits & vegetables, meat, poultry products, beverages (tea, coffee and alcoholic beverages), groundnuts, spices, and oil-meals.
| S. No. | Commodity | Exports in FY 2022-23 | (US$ million) | % growth YoY |
|---|---|---|---|---|
| 1. | Basmati Rice | 4,787.65 | 5,943.10 | 22.55 |
| 2. | Spices | 3,712.63 | 4,234.63 | 14.05 |
| 3. | Buffalo Meat | 3,191.93 | 3,724.28 | 17.21 |
| 4. | Oilmeals | 1,601.71 | 1,918.73 | 17.52 |
| 5. | Misc. processed items | 1,421.64 | 1,653.35 | 16.30 |
| 6. | Coffee | 1,146.18 | 1,288.26 | 12.42 |
| 7. | Fresh Fruits | 956.62 | 1,164.59 | 21.80 |
| 8. | Processed fruits and juices | 938.62 | 1,089.67 | 16.09 |
| 9. | Fresh vegetables | 364.07 | 890.96 | 144.22 |
| 10. | Groundnut | 831.62 | 805.56 | 3.14 |
Exports of fresh vegetables in FY 2024 witnessed the highest YoY growth of 144.32%, followed by fresh fruits (32.6%), and basmati rice (22.1%).
In the last fiscal year, India’s food and beverage (F&B) exports, valued at over US$ 5-6 billion, were significantly impacted by export restrictions. These restrictions were imposed due to concerns over domestic food availability and inflation, affecting key exports like rice, wheat, onions, and sugar.
The Indian government banned wheat exports in May 2022 following a heatwave that reduced production. Sugar export restrictions were introduced in June 2022. Consequently, wheat exports plummeted by about 96.3% year-on-year to US$ 56.74 million in FY 2024. Sugar exports also dropped by 51% year-on-year, totaling US$ 2.8 billion in 2023-24.
In July 2023, India restricted non-basmati rice exports to ensure domestic supply. A 20% duty was imposed on parboiled non-basmati rice exports, and a minimum export price (MEP) for basmati rice was introduced in August 2023. Initially set at US$ 1,200 per tonne, the MEP for basmati rice was later reduced to US$ 950 per tonne in October. Despite these measures, basmati rice exports have increased.
To control onion prices, India banned onion exports for about four months last December. The export ban was lifted in May this year, but a high MEP of US$ 550 per tonne and a 40% export duty were imposed, setting the effective minimum price for onion shipments at US$ 770 per tonne.
Although sugar production is now more stable with sufficient stocks this year, the Indian government is not considering lifting the export restrictions. The focus remains on meeting domestic consumption needs, maintaining a three-month supply balance, and achieving ethanol blending targets.
For wheat, the government has decided not to lift the export ban, even though this year’s production is higher and availability is expected to increase by about 10 million tonnes compared to last year. The priority is to ensure wheat is available domestically at reasonable prices and to replenish government reserves, which recently hit a 16-year low. As of May 1, wheat stocks in government warehouses were down by approximately 10.3% year-on-year.
Regarding rice, India is projected to remain a major player in the global rice market despite current export restrictions, according to the USDA. From April to mid-May 2024, India exported 1.75 million tonnes of rice, down from 2.35 million tonnes during the same period last year. For FY24, India exported 15.7 million tonnes of rice, compared to 21.8 million tonnes in FY23.
India has continued to supply rice, wheat, and onions to neighboring countries like Afghanistan, Bangladesh, Bhutan, Nepal, and Sri Lanka, as well as major trade partners such as the UAE, Indonesia, Vietnam, Singapore, Malaysia, and the Philippines, on a case-by-case basis.
Despite challenges in commodity exports, the performance of prepared foodstuffs (HS 16-22) is noteworthy as it remains a key priority for both the government and industry. Here’s an overview of the export figures for this segment:
| HS Code | Commodity | Exports in 2022-23 ($ Bn) | Exports in 2023-24 ($ Bn) | % Growth |
|---|---|---|---|---|
| 16 | Preparations of meat, of fish or of crustaceans… | 794.25 | 725.88 | -8.61 |
| 17 | Sugars and sugar confectionery | 3,323.14 | 3,291.60 | -47.94 |
| 18 | Cocoa and cocoa preparations | 154.54 | 183.7 | 18.87 |
| 19 | Preparations of cereals, flour, starch or milk… | 734.32 | 821.03 | 11.81 |
| 20 | Preparations of vegetables, fruit, nuts… | 934.31 | 1,150.04 | 23.73 |
| 21 | Miscellaneous edible preparations | 1,200.37 | 1,409.01 | 10.35 |
| 22 | Beverages, spirits & vinegar | 374.69 | 451.60 | 20.54 |
Despite challenges in the export of commodities, the processed food sector (HS 16-22) has performed well overall, with sugar and sugar confectionery (HS 17) being exceptions. Two key categories have seen declines: “Other refined sugar, including centrifugal sugar” (HS 17019990) dropped by 41.42% year-on-year, and “Other cane sugar, excluding those specified in note 2” (HS 17011490) fell by 74.25% year-on-year. These two categories alone make up over 90% of India’s sugar exports.
When excluding sugar, India’s processed F&B exports have actually increased by 13% year-on-year, indicating strong performance. This growth is promising as it boosts value addition, foreign exchange earnings, employment, and farm incomes.
Food inflation and domestic food security remain major concerns for the Indian government, leading to no immediate plans to lift food export restrictions. Inflation was 8.7% in April, up from 8.52% in March.
There are also safety concerns about Indian spices, which make up about 12% of global exports. The government and industry are working to address these issues. The full impact on spice exports will be clearer in the coming months.
Packaged food exporters should focus on emerging global trends, such as increased consumer demand for healthy, high-quality, and eco-friendly products. A recent survey found that over half of global consumers prefer healthier options, with a 14% rise in indulgent products with health claims over the past five years. One in three consumers prioritizes products that support well-being and checks ingredient lists, with protein being most sought-after. India’s processed and packaged F&B exports show positive momentum, and the industry should capitalize on this trend.
Read More:
1. India’s Shrimp Industry: A Growing Force in Global Markets
2. India’s dry fruits market: A sunrise business opportunity
3. India’s Banana Exports: The Next Big Leap
How will Indusfood contribute to the growth of India’s processed food exports amidst current challenges?
As India’s premier food trade show, Indusfood significantly boosts the country’s processed food exports by offering a high-profile platform for showcasing products to global buyers. This food trade show in India fosters direct business connections, encourages strategic collaborations, and provides insights into emerging market trends.
By emphasizing India’s strengths in processed foods and facilitating international partnerships, Indusfood enables exporters to capitalize on growth opportunities and navigate challenges in the global market.
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