India’s coffee sector eyes global expansion as production, exports rise

Ziraat Times Team Report

New Delhi, Nov 29: India’s coffee industry is expanding rapidly, buoyed by rising global demand, new trade agreements, and a growing domestic market, according to a detailed review released by the Ministry of Commerce and Industry on Friday.

The report, “India’s Coffee Story from Farm to Global Fame,” traces the sector’s evolution from its origins in the 1600s to its current status as the world’s seventh-largest coffee producer. Today, coffee is grown across 4.91 lakh hectares in the Western Ghats, Eastern Ghats and the North Eastern region, supporting livelihoods for more than two million people. Small growers form the backbone of the sector, accounting for 99% of holdings and 70% of total production.

India produces around 3.6 lakh tonnes of coffee annually, about 70% of which is exported to 128 countries. Karnataka remains the largest producer with an estimated 2.8 lakh metric tonnes in 2025–26, followed by Kerala and Tamil Nadu.

Indian coffee is known for its unique shade-grown system and intercropping with spices such as pepper, cardamom, and vanilla. The country’s diverse agro-climatic zones—13 in total—have created distinct regional profiles recognised globally.

Five regional coffees—Coorg Arabica, Wayanad Robusta, Chikmagalur Arabica, Araku Valley Arabica, and Bababudangiris Arabica—hold Geographical Indication (GI) status. Specialty coffees such as Monsooned Malabar AA, Mysore Nuggets Extra Bold and Robusta Kaapi Royale are increasingly gaining global recognition.

Established under the Coffee Act of 1942, the Coffee Board continues to drive research, quality improvement, value addition and export promotion. Its Central Coffee Research Institute and regional stations focus on developing high-yield, disease-resistant varieties.

The Board supports domestic promotion through India Coffee Houses and global outreach via major trade fairs, the Flavour of India – Fine Cup Competition, and the Know Your Kaapi (KYK) programme.

India has become the fifth-largest coffee exporter globally. Exports touched a record USD 1.8 billion in FY 2024–25, up from USD 1.29 billion the previous year. Exports during April–September 2025 reached USD 1.07 billion, marking a 15.5% year-on-year increase.

Italy, Germany, Belgium, Russia and the UAE remain the top destinations for Indian coffee. Instant coffee accounts for nearly 38% of total exports.

Multiple policy interventions have boosted the sector’s prospects:

• GST on coffee extracts and instant coffee reduced from 18% to 5%, lowering retail prices and stimulating domestic consumption.

• Under the India–UK Comprehensive Economic and Trade Agreement, Indian roast & ground and instant coffee will enjoy duty-free access.

• The India–EFTA TEPA, effective October 2025, provides zero-duty access to Switzerland, Norway and Iceland, opening premium markets for Indian value-added coffee.

The report highlights the progress of Koraput Coffee from Odisha, which won two categories at the KYK Fine Cup Awards 2024. The Tribal Development Co-operative Corporation of Odisha Ltd. (TDCCOL) has expanded procurement and marketing, improving incomes and reducing distress migration among tribal farmers. Eight Koraput Coffee cafés now operate across Odisha and New Delhi.

India’s coffee market is projected to grow at a CAGR of 8.9% by 2028, with the out-of-home segment expected to grow at up to 20%. The Coffee Board aims to scale national production to 9 lakh tonnes by 2047.

The government said the sector is poised for a new growth phase, driven by specialty coffees, enhanced traceability, farmer-oriented policies, and a rising global appetite for Indian varieties. The Ministry noted that the country’s coffee story now blends tradition, sustainability, and modern market expansion—positioning India to play a larger role in global coffee trade in the years ahead.