What is the Scope of the Organic Food Industry in India

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Over the last couple of years, India has seen massive growth in the organic food industry. Organic food refers to products that are produced without the application of man-made fertilizers, pesticides, growth regulators, and antibiotics in livestock. In addition to this, organic food also ensures that strict cultivation standards are adhered to concerning the impact on soil, water, and air.

Factors driving growth in the organic food industry

The major factors driving the demand for organic food in India is the increase in health awareness among the young generation and millennial, high disposable income, rising popularity, and strong economic growth. Indian consumers have started paying attention to the nutrient content and the quality of the food they eat, leading to increased expenditure on organic health and wellness products. Added to this, the growth of the Indian organic food industry is being accelerated by the strong support of the government.

Role of government in the organic food industry

The Indian government offers financial support under various schemes to farmers who are adopting organic farming. Some of the schemes are the National Project on Organic Farming (NPOF), the National Horticulture Mission (NHM), the National Project on Management of Soil Health and Fertility (NPMSH&F), and more. “Agri-Udaan” is another value-added initiative by the Government of India that is targeted to bring more land under organic farming. Several Agri-tech companies have come forward to help the government improve the Indian organic food industry using technologies like AI, Machine learning, Big data, and more.

Demand vs Supply of organic food in India

The organic food industry in India is still at a budding stage. There is an increase in demand from the buyers, but the supply is low. There are three important reasons for this.

  • In the first place, organic products are priced high. This makes market penetration difficult.
  • The second reason behind the low supply of organic food is that supply chains of organic food from organic farms to domestic consumers are not firmly established.
  • Thirdly, there is a lack of knowledge about organic products amongst potential customers leading to a low supply.

Upcoming scope of Indian organic food industry

The trend of mindful eating is entailing again due to an increased number of consumers who choose to adopt a completely chemical-free lifestyle and have shifted towards eating natural and organic. This shift is witnessed mainly because of the awareness spread by a lot of health specialists, NGOs, and organic food manufacturers.

The Indian organic food industry currently sized at 6000 crores is expected to grow at a CAGR of 25%, reaching a value of US$ 2,091 Million by 2024. With this in mind, a lot of newer organic brands that follow traditional processing techniques are entering the market every day. The organic food industry is expected to grow at a CAGR of over 25 percent in the next three years. This statistic has given a huge scope and opportunity for new startups to enter into the organic food business and work mutually for the growth of the industry.

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