India's Organic Exports Tumble: Global Demand Slump Hits $665M Trade – What Investors Need to Know!

India's organic food exports have seen a significant decline, driven by a combination of global economic slowdown, trade uncertainties, and regulatory challenges in key markets like the United States and the European Union.

Minister of State for Food Processing Industries Ravneet Singh stated in Lok Sabha that the global market's sluggish demand, coupled with geopolitical tensions and temporary regulatory shifts in destination countries, has adversely affected India's organic food export performance. This trend has led to lower export volumes and values compared to previous fiscal years.

Key Numbers and Data

• In the fiscal year 2024-25 (FY25), India exported 368,155.04 million tonnes of organic food, valued at $665.97 million.
• This represents an increase from the fiscal year 2023-24 (FY24), which saw 261,029 million tonnes exported for $494.80 million.
• However, the FY25 figures are lower than those recorded in FY23, FY22, and FY21, indicating a broader downturn in performance over recent years.

Challenges in Key Markets

• The United States of America (US) and the European Union (EU) are the primary destinations for India's organic food exports.
• Exports to the US require certification from USDA-NOP (US Department of Agriculture National Organic Program) accredited bodies.
• Similarly, processed food exports to the EU need certification from EU-accredited Certification Bodies (CBs).
• A significant challenge arose in 2022 when the EU delisted some certification bodies, reducing the available certification space and increasing transaction costs for Indian exporters. This directly hampered processed food exports to the EU.

Government Initiatives and Support

• The Ministry of Food Processing Industries is implementing schemes aimed at the overall development of the food processing sector, including organic products.
• These initiatives focus on creating better infrastructure, providing assistance to farmers, generating employment, reducing wastage, enhancing processing levels, and boosting overall processed food exports.
• The Agricultural and Processed Food Products Export Development Authority (APEDA) plays a crucial role by implementing the National Programme for Organic Production (NPOP). This program oversees the accreditation of certification bodies, sets standards for organic production, and promotes organic farming and marketing.

Impact

• The decline in organic exports can negatively affect Indian companies involved in this sector, potentially leading to reduced revenues and profitability.
• Farmers producing organic crops may face lower demand and prices for their produce.
• The overall trade balance for India could be impacted, especially in the agri-export segment.
• However, government initiatives and APEDA's efforts aim to mitigate these impacts and promote growth in the long term.
• Impact Rating: 6/10

Difficult Terms Explained

• Organic Food: Food products grown and processed without synthetic pesticides, fertilizers, genetically modified organisms (GMOs), or irradiation.
• Sluggish Demand: A situation where the desire or need for a product or service is low, leading to reduced sales.
• Geopolitical Tensions: Strained relationships or conflicts between nations, which can disrupt international trade and supply chains.
• Certification Bodies (CBs): Independent organizations that assess and certify that products, processes, or services meet specific standards (e.g., organic standards).
• USDA-NOP: The US Department of Agriculture's National Organic Program, which sets the standards for organically produced goods in the United States.
• APEDA: Agricultural and Processed Food Products Export Development Authority, an Indian government body responsible for promoting and developing the export of agricultural and processed food products.
• NPOP: National Programme for Organic Production, India's national program for organic certification that establishes standards and accreditation for organic production.