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The emergence of plantations in India was a part of the commercialisation strategy adopted by the British planters. Geographical spread and development of plantations in the world was in tune with the expansion of colonialism and imperialism. The growth and spread of plantation in India is no way different from the expansion and development of plantation elsewhere in the world.

The plantation has an interface of agriculture and industry. It is a type of commercial farming where a single crop is grown on a large area. Plantation crops are considered to be the major segment of the horticulture crops and the mainstay of agrarian economies in many states and union territories of India. They contribute a significant amount to the national exchequer and to the country's exports by way of taxes and export earnings.

Major plantation crops in India include tea, coffee, coconut, oil palm, cashew, rubber and cocoa. India is the largest producer and consumer of cashew nut and arecanut. Tea and coffee are the main and oldest industries in the country which provide ample employment opportunities to the people and hold immense potential for export. Above all, plantation crops like coconut and arecanut provides adequate interspaces for intercropping of seasonal crops and thus ensures the food security to a great extent. Nevertheless, in India, plantation crops have been continuously facing the problem of lack of investment and depressed yields, and are in great need of modernisation.

Tea industry facing serious challenges

When we talk of the plantation industry in India, tea is the first name that comes to our mind. The tea industry in India is nearly two centuries old. It occupies an important place and plays a very useful part in the national economy. Owing to certain specific soil and climatic requirements its cultivation of tea is confined to only certain parts of the country.

Tea plantations in India are mainly located in rural hills and backward areas of North-eastern and Southern States. Major tea growing areas of the country are concentrated in Assam, West Bengal, Tamil Nadu and Kerala. The other areas where tea is grown to a small extent are Karnataka, Tripura, Himachal Pradesh, Uttaranchal, Arunachal Pradesh, Manipur, Sikkim, Nagaland, Meghalaya, Mizoram, Bihar and Orissa.

India is the second-largest producer of tea globally accounting for about 21% of global production in 2022. Indian tea is one of the finest in the world owing to its ideal climatic condition. Investment over the years in tea processing units, continuous innovation, augmented product mix and strategic marketing have made Indian tea a preferred beverage across the world. As of 2022, a total of 6.19 lakh hectares of area was cultivated in India for tea production. India is also among the world's top tea-consuming countries, with 80% of the tea produced in the country consumed by the domestic population. In 2022-23, India’s tea production stood at 1,374.97 million kg compared with 1,344.40 million kg in 2021-22.

India was the third largest exporter of tea accounting for 13% of the global exports in 2022. India exported 228.40 million kg of tea in 2022-23 with value realisation of Rs 6,386 crore. Tea export in 2022-23 was higher by 27.61 million kg in quantity terms and by Rs 970 crore in value terms.

The major competitive countries in the export market are Sri Lanka, Kenya, China and Indonesia. Kenya was the biggest exporter of tea in 2022 followed by China. China is the major producer of green tea while Sri Lanka and Indonesia are producing mainly orthodox varieties of tea. Kenya is basically a CTC tea producing country. While India is facing competition from Sri Lanka and Indonesia with regard to export of orthodox teas and from China with regard to green tea export, it is facing competition from Kenya and from other African countries in exporting CTC teas.

India exports tea to about 25 countries across the world. Russia, Iran, UAE, UK, USA, Germany and China are some of the major export markets of Indian tea. In 2021-22 Russia imported 32.5 million kg of tea or about 14% of India’s total exports. Iran, USA and UAE imported 29.3 million kg, 23.3 million kg and 13.5 million kg of tea, respectively in the same year  

To help the Indian exporters to market tea of Indian origin in overseas markets on a sustained basis, the Tea Board of India started a scheme: Promotion for packaged tea of Indian origin. The scheme assists in promotional campaigns - up to 25% of the cost reimbursement, display in international departmental stores, product literature and website development, and inspection charges reimbursement of up to 25% of the charges.

Tea industry is a big employment generator. It provides direct employment to over one million people in India. Through its forward and backward linkages, another ten million persons derive their livelihood from tea. In Northeast India alone, the tea industry employs around nine lakh persons on permanent rolls. It is also one of the largest employers of women amongst the organized industries in India, where women constitute nearly 51% of the total workforce.

The industry, however, is facing serious challenges to move forward. Stagnant prices and rising cost of production has pushed the tea industry into a critical stage triggering fear of lack of future interest in the business, Tea Association of India (TAI) has cautioned.

The primary challenge the industry faces now is that tea prices have not kept pace with increasing costs. Many estates have shut down, changed hands, or survive only through subsidies from their group companies with other business interests. The situation is so grim that it may lead to a lack of future interest in the industry. Tea prices are not keeping pace with rising input costs. The workers’ wages have increased to 200% in the past decade, and in contrast the prices of tea have only risen by 30%. The declining performance of tea plantations, rising incidents of pests due to climate change impact, dichotomy with the small tea growers and stagnant exports have pushed the industry to such a stage,"  TAI has observed.

Coffee production rises

“The saga of Indian coffee began on a humble note, with planting of ‘Seven seeds’ of ‘Mocha’ during 1600 AD by the legendary holy saint Baba Budan in the courtyard of his hermitage on ‘Baba Budan Giris’ in Karnataka” is how Indian Coffee Board remembers the beginning of coffee plantation in India.

It was during the 18th century that the commercial plantations of coffee were started by the British entrepreneurs. Since then, the Indian coffee industry has made rapid strides and earned a distinct identity in the coffee map of the world.

Coffee in India is grown under a canopy of thick natural shade in ecologically sensitive regions of the Western and Eastern Ghats. This is one of the 25 biodiversity hotspots of the world. Coffee contributes significantly to sustain the unique bio- diversity of the region and is also responsible for the socio-economic development in the remote, hilly areas.

With the increasing demand from both home and abroad, the acreage under coffee and its production have grown significantly during the last two decades. Acreage has increased by 38% between 2000-01 and 2022-23 while production has increased by about 17% during the same period.

The increase in acreage seems impressive considering the limited land available that qualifies the specific climatic and soil conditions required by this crop. In fact, about four-fifths of the country’s total coffee plantation is concentrated in three states, Karnataka, Kerala and Tamil Nadu. These three states account for over 96% of the country’s total coffee production with Karnataka accounting for 70.5% of the production in 2022-23 followed by Kerala with 20.6%.

Coffee is one of the world’s most popular beverages and is consumed across countries. Taking advantage of its popularity India has taken special efforts to increase its export. In the last three years export earnings from coffee has increased by 53% from $ 731 million in 2019-20 to $ 1,120 million in 2022-23. Italy with 14.7% share was India’s biggest export market of coffee in 2022-23 followed by Germany and Russia with 10.8% and 9.8% share, respectively. India exports coffee to more than 50 countries.

Being a labour-intensive sector, the industry directly employed 6.83 lakh persons in 2022-23 (Coffee Board of India). Indirect employment must be even more. Since Karnataka is the main hub of coffee production, it accounted for more than 70% of the total employment in the sector.

India is a big exporter of cashew

India is the second largest producer and exporter of cashew, another plantation product. India accounts for about 15% of global cashew exports. India primarily exports cashew kernel and cashew nut shell liquid. In rupee terms, the cashew exports were Rs 2,808 crore during 2023-24. India exports cashews to more than 60 countries across the world. The key export destinations for India are UAE, Japan, Netherland, Saudi Arabia, the USA, the UK, Canada, France, Israel, and Italy.

The cultivation of cashews in India covers a total of 0.7 million hectares of land, and the country produces over 0.8 million tonnes annually. Between 2019-20 and 2021-22, India's cashew nut production grew from 743 thousand tonnes to 752 thousand tonnes. In India, cashew cultivation is spread along the coastal regions of the peninsula.

Cashew is mainly grown in Maharashtra, Kerala, Karnataka, Tamil Nadu, Andhra Pradesh, Goa, Orissa, West Bengal, and some parts of the North-Eastern region. According to data published by the National Horticulture Board, Maharashtra was the biggest producer of cashew nuts in 2021-22 with 0.20 million tonnes.

Coconut plantation providing large employment

India is the largest coconut-producing country in the world and accounted for about a third of world's total production in 2021-22, with a production of 13,283 thousand tonnes. According to the ministry of commerce the crop contributes about $ 3.88 billion to India’s gross domestic product.  It provides food security and livelihood to more than 12 million people in India. It is also a fibre-yielding crop to more than 15,000 coir-based industries which provide employment to more than six lakh people.

The coconut plantation is largely concentrated in Kerala, Karnataka, Tamil Nadu and Andhra Pradesh, which together accounted for about 89.13% of the coconut area and over 90% of the coconut production in the country. Other coconut producing states are west Bengal, Orissa and Gujarat.

India is the third biggest exporter of coconut. Between 2015-16 and 2021-22 the total coconut exports from India grew by 13% annually compounded. In 2021-22 India exported coconut worth $ 393 million – up by 41% over the previous year. The sharp rise in coconut is helping to create more employment required in the production of various coconut-related products.

Recognising the employment potential of coconut plantation, the government of India has provided financial assistance of more than $ 10 million in 2021-22 for covering more areas under coconut cultivation and for productivity expansion. Under this scheme six new coconut nurseries, coconut nucleus seed garden and six new coconut processing units for value addition were set up.

But though coconut plantation has proved to be a big employment generator, its growth is suffering from various reasons. In coastal areas, where coconut farming is common, soil erosion and saline intrusion provide additional challenges that reduce the resilience of coconut trees.

The use of monoculture techniques, which are common in coconut farming, depletes the nutrients in the soil and increases vulnerability to pests and illnesses, reducing the productivity. Inadequate management of water and nutrients in agricultural operations makes these problems worse and may even hinder the growth of coconuts. Adoption of sustainable practices is hampered by limited access to contemporary farming technologies, financial constraints, and unstable land tenure, which further impedes long-term investments. 

Rubber plantation

India is the sixth largest producer of natural rubber (NR) in the world; accounting for 5.5 % of the total supply of 13.800 million tonnes in 2021 and occupies the second position in terms of productivity. India continued to be the second largest consumer of NR by accounting for 9.0 % of the global demand of 13.967 million tonnes during 2021.

The overall performance of the rubber plantation industry during 2021-22 was very impressive. Natural rubber production in the country improved to 775,000 tonnes during 2021-22 as compared to 715,000 tonnes during 2020- 21, recording a growth of 8.4 % compared to a growth of 0.4 % registered during the previous year.

Post script

Even as the plantation sector in India is suffering from sustainability problems, the Kerala government has come out with a comprehensive plan to tap the enormous potential of the state’s plantation sector as a driver of economic growth. The state established the directorate of plantations in 2021, the first of its kind in the country, with a mandate to revitalise the sector, improve productivity, and explore potential markets for its value-added products.

Kerala has 7.11 lakh hectares of plantations, mainly rubber, tea, coffee and cardamom, across its vast Western Ghats region. The state accounted for 72% of India’s rubber production, 91% of cardamom, 20.4% of coffee and 4.5% of tea in 2021-22.

“We are in a mission mode to revive the plantation sector by developing various support systems and proposing needed policies that would provide impetus to the plantation sector and help it grow to the next level,” the Kerala government has declared. Maybe, Kerala’s pioneering effort would now encourage other states also to look into the problems and prospects of the plantation sector in their states.