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India is one of the major agricultural producers in the world with almost 55% of India’s population earning their livelihood from agriculture. One of the major players in the global agriculture sector, India is the second largest producer of wheat and rice, the second biggest producer of cotton, and is the largest producer of milk, pulses, and spices.

But while the country largely engages itself to food production to feed its people, it has expanded its commercial crop production to become a major force globally. Plantation crops, which are commercial or cash crops grown on a large, contiguous area of land, have become a big part of India’s agricultural landscape today and are providing livelihood to a large section of rural families. 

What are plantation crops?

Plantation crops refer to a specific group of agricultural products which are grown on an extensive scale in a large contiguous area, typically in tropical and subtropical climates. The primary characteristic of these crops is that they are high-value cash crops, grown commercially for the purpose of sale rather than personal consumption.

Plantation farming is characterized by its large scale monoculture setup, intensive use of labour and significant capital investment. These crops usually have a long gestation period and require a sizable labour force for their care, harvesting, and subsequent processing. Plantation crops play a crucial economic role, significantly contributing to the gross domestic product and export earnings.

Growth of plantation sector in India

The history of plantation crops owes its origin to 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 development of plantation crops in India began as an imperialistic move to take advantage of its geographical compliance.

The Indian plantation industry encompasses the large-scale cultivation of perennial crops such as tea, coffee, rubber, coconut and spices, primarily in the southern and north-eastern regions of the country.  The plantation industry contributes significantly to the economy by generating employment, boosting export earnings, and supporting various agro-industries. It also plays a vital role in rural development and provides essential raw materials for the domestic and international markets. 

Major plantation crops in India include coconut, arecanut, oil palm, sugarcane, cashew, tea, coffee, rubber and cocoa. India is the largest producer and consumer of cashewnut 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.

Among the plantation crops, tea is probably the most widely cultivated one and its use is nearly universal. India is the second-largest producer of tea globally. Indian tea is one of the finest in the world owing to strong geographical indications, heavy investment in tea processing units, continuous innovation, augmented product mix, and strategic market expansion.

India becomes the second biggest tea exporter

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 more than a fifth of the global production. 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. Tea production increased to 1,382 million kg in 2023-24 from 1,347 million kg in 2022-23.

On the global reckoning, the Indian tea industry, which was reeling under problems for years, has finally achieved something to cheer about. According to Tea Board of India, India has exported 254 million kg of tea in 2024, thus becoming the second-highest exporter in the world. While Kenya retained the first spot in global tea exports, India surpassed Sri Lanka to take the second spot. Kenya exported over 500 million kg of tea in 2024. India's 2023-24 figures were also its second-best export margins behind 2018 when it exported around 256 million kg of tea. India's 2023-24 tea exports amounted to $ 826 million – up $ 8 million from 2022-23. 

While India's export figures hovered around 200-250 million kg for the last several years, barring 2018, this impressive growth has provided the tea industry with the hope to touch the 300- million kg mark by 2030. India, on an average, produces about 1,400 million kg of tea every year.

India exports tea to over 120 countries, with major destinations including Russia, Iran, the UAE, the US, and the UK. These countries, along with Germany and China, are among the largest importers of tea from India. Significant volumes are also shipped to CIS nations like Ukraine and Kazakhstan. 

The bulk of the export comes from the orthodox segment, the growth of which has been supported by various schemes launched by the Union and state governments in recent times. With the favourable export policy by the Centre and support by the state governments, the industry is hopeful of increasing its export basket in the years to come.

The good performance of the tea industry both at home and abroad is significant. For, the industry provides direct employment to over one million people and indirectly supports 10 million more through its supply chain network. Northeast India alone employs around nine lakh people directly in tea plantations, with women constituting a significant portion of the workforce. The industry is also a major employer of women, with nearly 51% of the tea sector workforce being women. 

Coffee export crosses $ billion-mark

India’s journey with coffee began centuries ago, when the legendary holy saint Baba Budan brought seven Mocha seeds to the hills of Karnataka in the 1600s. His simple act of planting these seeds in the courtyard of his hermitage in Baba Budan Giri unknowingly set in motion the rise of India as one of the world's prominent coffee producers. Over the centuries, the cultivation of coffee in India has evolved from a humble practice to a thriving industry with the country's coffee now widely loved across the globe. India is now the seventh-largest coffee producer globally with exports reaching $ 1.29 billion in 2023-24 – $ 140 million more than that of 2022-23.

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. 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%.

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. During the last four years, between 2019-20 and 2023-24, the production has increased by 25% from 29.98 lakh tonnes to 3.74 lakh tonnes. 

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 four years export earnings from coffee has increased by 75% from $ 734 million in 2019-20 to $ 1,286 million in 2023-24. India exports coffee to more than 50 countries.  Italy with about 15% 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.

Being a labour-intensive sector, the industry directly employed 6.83 lakh workers 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.

Coconut production rises steadily

India is the third largest coconut-producing country in the world accounting for about a third of the total world production. India produced 21,374 million nuts in 2023-24. According to the ministry of commerce the crop contributes about $ 3.88 billion to India’s gross domestic product.  The coconut palm provides food security and livelihood opportunities to more than 12 million people in India. It is also a fibre-yielding crop for more than 15,000 coir-based industries, employing nearly six lakh people. 

Copra processing, coconut oil extraction and coir manufacturing are the traditional coconut-based activities in the country. India’s coconut production is majorly situated in Kerala, Karnataka, Tami Nadu and Andhra Pradesh, accounting for 89.13% of the coconut area and 90.77% of the coconut production in the country during 2023-24. Other coconut-producing states in the country are West Bengal, Orissa, Maharashtra, Gujarat, Assam and Bihar.

India plays a major role in the global coconut and related products supplies. India exports coconut to more than 140 countries around the world. The major importers of coconut from India are Vietnam, the UAE, Bangladesh, Malaysia and the USA.

At a CAGR of 7.05%, the global coconut market, valued at $ 12.03 billion in 2023, is projected to reach $ 19.38 billion by 2030. India's exports of coconut products were valued at $427.3 million in 2022-2023, a 9.8% increase from 2021-2022. India, the largest producer of coconut but has only 15% share in global trade and thus, has ample opportunity to scale up its export in the growing market.

To increase coconut exports, India must focus on quality, market research, branding and compliance. The exporters have to ensure high-quality coconuts, conduct thorough market analysis, develop a strong brand identity, and adhere to export regulations and certifications. Also, they have to leverage online platforms, trade shows, and B2B networks to expand reach. 

India needs to increase rubber production to cut imports

In 2023-24, India's rubber production touched a new high of at 8.57 lakh tonnes. The rubber consumption at 14.16 lakh tonnes also touched a record high. This growth in production was fuelled by various initiatives like the INROAD project and the Sustainable & Inclusive Development of Natural Rubber Sector scheme, which aims to expand plantations and enhance productivity. The government is also increasing financial assistance for the rubber sector, including funding for rubber research and promoting Rubber Producers Societies. 

As part of the project INROAD (Indian Natural Rubber Operations for Assisted Development), the Automotive Tyre Manufacturers' Association (ATMA) had planned to develop two lakh hectares of rubber plantation in Assam, Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Tripura and West Bengal at a cost of `1,100 crore in five years. In fact, over 1.25 lakh hectares of rubber plantation have reportedly been already completed in Northeast and West Bengal as part of the INROAD project by four leading tyre manufacturers of the country.

India is the sixth largest producer of natural rubber in the world; accounting for 5.5 % of the total supply and occupies the second position in terms of productivity. India continued to be the second largest consumer of natural rubber by accounting for 9.0% of the global demand. 

With robust growth of the automobile industry, the demand for natural rubber in India has been growing steadily leaving a big gap between domestic production and consumption. And although with higher production, this gap has narrowed down but India still needs to meet more than a third of its consumption through imports. Maybe, the government’s recent policy reforms will help to cut down the country’s dependence on imported rubber in the future.

The plantation sector in India has overall done well in 2024 with higher production and bigger export earnings. But the sector is suffering from sustainability problems. While commodities like tea, coffee, cardamom, and rubber saw bullish price trends, several external factors created hurdles. Erratic climate patterns, geopolitical tensions, and rising costs deeply affected their production and profitability.