Why India remains a marginal player in global fruit and veggie market

Though a major producer, lack of infra has meant that country accounts for just 1% of market share, and relies predominantly on neighbours

India is one of the world’s foremost producers of several fruits and vegetables such as mangoes, bananas, potatoes, and onions. But its performance when it comes to exports or capturing the global markets has been woeful.

In fact, according to an assessment by Agriculture and Processed Food Products Export Development Authority (APEDA) based on 2020 data from the Food and Agriculture Organisation (FAO), India ranks first in the production of banana (26.29 per cent), papaya (43.26 per cent) and mango (45.14 per cent).

In vegetables, India is the largest producer of ginger and okra and second biggest producer of potato, onion, cauliflower, brinjal, cabbage, etc. But, its share in the global market of fruits and vegetables is just around 1 per cent.

The vast production base offers India tremendous opportunities for export, APEDA’s assessment said. In 2021-22, India exported fresh fruits and vegetables worth Rs 11,412.50 crore, which comprised of fruits worth Rs 5,593 crore and vegetables worth Rs 5,745.54 crore.

Grapes, pomegranates, mangoes, bananas, and oranges account for a large portion of the fruits exported, while onions, potatoes, tomatoes, and green chillies contribute largely to the vegetable export basket.

The major destinations for the Indian fresh fruits and vegetables are Bangladesh, UAE, Nepal, the Netherlands, Malaysia, Sri Lanka, the UK, Oman, and Qatar. For processed fruits and vegetables, the major destinations are the USA, UAE, China, the Netherlands, the UK, and Saudi Arabia.

A closer look at the destinations shows that, barring the Netherlands or the UK, India’s fresh fruits and vegetables exports have largely been to neighbouring countries or those that are nearby.

And, there are valid reasons for this.

Though it has improved in the last few years, India still lacks and is far behind other major producing countries in developing a robust and vast network of cold chains, cold storages, refrigerated transport systems and other paraphernalia that are vital for ensuring that fruits and vegetables remain fresh when they reach the final buyer.

Post-production losses

A study commissioned by the Ministry of Food Processing Industries (MoFPI) to the Central Institute of Post-Harvest Engineering and Technology (CIPHET) of ICAR to evaluate the food loss in India in 2015 found that post-harvest loss incurred in cereals was in the range of 4.65 per cent to 5.99 per cent, in oilseeds and pulses it was in the range of 3.08 per cent to 9.96 per cent, in spices 1.18 per cent to 7.89 per cent, in livestock produce (milk, meats, fish) 0.92 per cent to 10.52 per cent, and in fruits and vegetables at 4.58 per cent to 15.88 per cent.

Another study by Small farmers’ Agribusiness Consortium (SFAC) based on field trips in Uttar Pradesh, Uttarakhand, and Haryana to evaluate a basket of 29 commodities found that the highest post-harvest loss was in the case of pears (22-44 per cent) and lowest in the case of water melon (7-11 per cent).

Expert view

Pawanexh Kohli, former chief executive officer of National Cold Chain Development Authority (NCCD), the country’s premier think-tank on agriculture logistics, said all fruits and vegetables, except for some like apples and pears, which are grown in the hilly regions, don’t have a big saleable life. While, in case of some fruits the saleable life can be extended up to 16-18 months by reducing oxygen levels.

However, tropical fruits like bananas and mangoes don’t have a saleable shelf life beyond a few weeks even in the best of cold chain facilities. Therefore, there is a need to reduce the time taken from farm to fork, which can only be done through pack houses near fields, reefer vans for quick and efficient transportation etc.

“You can’t export tropical fruits like mangoes by purchasing them from mandis because by the time it reaches the mandis it has already lost 15 days of its saleable life of around four weeks,” Kohli told Business Standard. Therefore, in that situation the only option for an exporter left is to sell in neighbouring countries. “Whereby the vast and lucrative markets of Europe and Americas remain untouched by us,” Kohli said.

Even the Centre’s high-powered panel on Doubling Farmers’ Income (DFI) in one of its reports had flagged this problem. It said that in the case of perishable produce, the marketable lifecycle is under pressure, and food quality is degraded rapidly without recourse to enablers such as cold chains.

“Lack of cold-chain systems force farmers to monetise their produce at first instance by selling into food processing units, inefficient wholesale markets; and these sales are the only opportunity, low down in the value chain system, and do not empower the farmers,” the panel said.

Type of infra	Infra required	Infra Created*	All India Gap	%Share Shortfall
Integrated Pack Houses	70,080 nos	249	69831 nos	99.60%
Refer Transport	61,826 nos	Approx. 10,000+ nos	52,826 nos	85%
Cold Storage (bulk+hub)	35.8 mln tns	31.8 mln tns	4 mln tns	10%
Ripening Units	9131	812	8319	91%

Cold chain and other infra

A study by NCCD conducted in 2015 found that India is woefully short of modern storage infrastructure required for transporting perishable items. It said that when it comes to integrated pack houses, there was a 99.6 per cent shortfall, in reefer vans there was 85 per cent shortfall. (see chart)

Only in case of cold storage (both bulk and hub), there was some comfort, but this is no consolation as cold storages in themselves aren’t adequate for ensuring that perishables don’t get spoiled in transit.

Though there may have been some improvement since then, it appears not to have matched the requirement.“The country has very few integrated pack-houses, which are necessary for assembling and preparing the fresh produce to enter the cold chain. Without these assembly and preconditioning units, the farmer cannot take advantage of the national market and is forced to limit his/her selling range to the limits imposed by the natural holding life of the produce. The limitation in selling radius of the farmers is not only reflected in their lowered income, but also dissuaded efforts for achieving higher farm level productivity,” the DFI report said.

So, unless India develops robust infrastructure to supplement the efforts of farmers, it will continue to remain a big producer of fruits and vegetables such as mangoes and bananas, but a very marginal player in the world market.