The Rise of India’s Coffee Industry: Insights and Trends 2025

Author: John P. LaWare

India has grown into one of the world’s leading coffee producers, generating 374 thousand metric tons in 2024. Having analyzed the coffee market for over 20 years, I’ve observed India’s transformation from a small producer into a major force in international coffee trade. This analysis examines India’s coffee sector from its early beginnings to today’s achievements and tomorrow’s opportunities drawing on market data, industry expert perspectives, and case studies from the field.

India’s Coffee Industry Historical Context

Coffee’s journey in India began with a fascinating act in the 17th century Baba Budan, a Sufi saint, secretly carried seven coffee beans from Yemen and sowed them in Chikmagalur’s hillsides in Karnataka. read more about Yemen Coffee Industry. From these initial seeds, coffee growing expanded throughout Karnataka, Kerala, and Tamil Nadu in southern India, which now produce almost 98% of the country’s coffee.

The growth of India’s coffee industry has deep historical ties. While Indian traders supplied coffee to European markets long before colonial times, as noted by Coffee Lab Limited CEO Sunalini Menon, the British colonial administration later expanded commercial coffee farming operations. After India gained independence, the government took decisive steps to strengthen the sector. Two significant developments in 1942 founding the Coffee Board of India and implementing the Coffee Act – created official guidelines to advance the industry’s development. youtube

Market Size, Growth & Trends

India stands as the sixth largest coffee producer and fifth largest coffee exporter worldwide. The Coffee Board of India reports the nation’s output reached 320,000 metric tons in 2020-21, showing a 12% jump from the year before. Export figures climbed 15% to 334,000 metric tons, bringing in USD 846 million.

Coffee drinking in India continues to expand as cities grow, the middle class increases, and people adopt new habits. Indians now drink 115 grams of coffee per person yearly, up from 78 grams in 2010. As Nandan Nilekani, co founder of Infosys, observed, “The Indian coffee house culture shows how young India’s goals and daily routines are shifting.”

Three states lead India’s coffee production: Karnataka, Kerala, and Tamil Nadu, with Karnataka making up 71% of total output. These areas flourish with coffee plants thanks to their high mountain locations, abundant rain, and rich soil that drains well.

Karnataka: This state produces outstanding Arabica and Robusta beans, mainly in Chikmagalur, Kodagu, and Hassan districts. Trees like rosewood, teak, and fig create natural shade where the coffee plants thrive.

Kerala: This state makes the special Monsoon Malabar coffee, where beans catch monsoon winds after harvest, creating distinct flavors. Coffee grows mainly in Wayanad, Travancore, and Nelliampathy. ead more about Uganda Coffee Industry

Tamil Nadu: Coffee farms dot the Nilgiri hills, where altitude and natural shade support both Arabica and Robusta varieties. Farmers here emphasize clean, earth friendly growing methods.

M P A G Vasu Raju

Karnataka is the largest producer of coffee in India. The state is known for its high quality Arabica and Robusta coffee beans and accounts for around 60% of India’s total coffee production. The coffee cultivation in Karnataka is mostly grown in the hilly regions of Chikmagalur, Coorg, and the Baba Budan hills.

Other major coffee producing states in India include Tamil Nadu, Kerala, and Andhra Pradesh. Indian coffee is known for its rich taste, aroma, and quality and is exported to various countries around the world.

The coffee industry in India plays an important role in the economy and provides employment opportunities to a large number of people, especially in rural areas. The government and various coffee organizations are working to promote and develop the coffee sector in India and improve the livelihoods of coffee farmers.

Supply Chain & Key Players in India’s Coffee Industry

India’s coffee supply chain involves a complex network of stakeholders, including small scale farmers, cooperatives, private estates, Coffee wholesaler exporters, and domestic retailers. The Coffee Board of India plays a crucial role in regulating the industry, providing support to farmers, and promoting Indian coffee globally.

Some of the key players in India’s coffee industry include:

• Tata Coffee Limited: India’s largest integrated coffee company, with a presence across the value chain from plantations to retail.
• CCL Products (India) Limited: A leading exporter of instant coffee, supplying to global brands like Starbucks and Nestle.
• Nescafé: Nestle’s popular instant coffee brand, which has a strong presence in the Indian market and sources a significant portion of its coffee from the country.

Export & Trade Dynamics

India exports coffee to over 70 countries, with the European Union, Russia, and the United States being the primary markets. In recent years, there has been a growing demand for Indian coffee in emerging markets like Southeast Asia and the Middle East.

The Indian government has been proactive in supporting coffee exports through various initiatives, such as the “Brand India” campaign and the establishment of the Coffee Export Promotion Council. Free trade agreements with countries like South Korea and the ASEAN region have also helped boost coffee exports.

India Regulatory & Government Policies of the coffee industry

The Coffee Board of India operates as a division of the Ministry of Commerce and Industry, overseeing and advancing India’s coffee sector. Their work spans establishing quality benchmarks, offering financial support to farmers, and driving agricultural innovation through research programs.

To strengthen coffee cultivation, India’s government launched key programs like the “Coffee Debt Relief Package” and “Coffee Development Programme.” These efforts focus on boosting crop yields, raising coffee quality standards, and encouraging eco friendly growing methods.

Sustainability & Social Responsibility

Environmental stewardship and community well being have taken center stage in India’s coffee sector. Coffee farmers and businesses have embraced planet friendly methods, including growing coffee under forest canopies, collecting rainwater, and applying natural fertilizers.

Equitable trade practices have gained momentum, with groups like the Fair Trade Alliance Kerala (FTAK) helping small farmers receive fair compensation and improved workplace standards. As buyers become more conscious of these issues, responsible farming practices have become a defining feature that sets Indian coffee apart in local and global markets.

Dr_Azygos

I’m super bullish on coffee in India. Speciality coffee is a recently discovered (<10 years) trend in India. For years we were drinking those instant stuff.
Even if you check the engagement on this sub, the activity has picked up, and more and more ppl are consuming specialty coffee. If my forecast goes right, coffee industry in India will pick up pace in the next few years and in the next five years will be able to cross a billion mark 🤞

Innovation & Technology

Indian coffee production has transformed through advances in farming methods and digital systems. Farmers now apply advanced monitoring with satellites, drones, and field sensors to fine tune their growing practices and make the best use of water and nutrients. The supply chain has become more transparent through new digital tracking systems that trace each batch of coffee from farm to consumer. Coffee producers have also expanded beyond traditional products, creating new offerings like coffee flavored drinks, snack foods, and beauty products to meet changing customer tastes and interests. These shifts reflect how the industry adapts to serve modern consumers while maintaining quality.

Competitive Landscape

Indian coffee growers contend with established producers like Brazil coffee industry, Vietnam, and Colombia coffee industry in worldwide markets. Still, Indian coffee stands out internationally because of its distinctive taste characteristics, cultivation under forest canopy, and earth friendly farming methods.

Inside India’s borders, coffee companies and café chains vie intensely for a fast growing customer base. Local businesses such as Café Coffee Day and Indian Coffee House go head to head with global giants like Starbucks and Costa Coffee.

Challenges & Risks

The Indian coffee sector confronts several hurdles in its path forward:

Weather disruption: Coffee plants struggle against unpredictable climate shifts, heat waves, and irregular monsoons that threaten crop yields.

Market swings: The ups and downs of worldwide coffee markets put pressure on farmers’ earnings and long term business health.

Transport bottlenecks: Limited facilities and gaps in the delivery network can harm bean quality and drive up expenses.

Workforce concerns: Growing and processing coffee requires many hands, making fair pay and proper working standards an ongoing priority.

India Coffee Industry Future Outlook

India’s coffee industry is poised for significant growth in the coming years, driven by increasing domestic consumption, rising exports, and a focus on value added products. As per industry projections, India’s coffee production is expected to reach 400,000 metric tons by 2025, with exports surpassing USD 1 billion.

For India’s coffee sector to reach its full growth potential, several key actions can drive success. Agricultural research investments should advance crop yields, bean characteristics, and the ability to withstand changing weather patterns. Building momentum in India’s own market requires wider coffee appreciation, more cafes and stores, plus creative new coffee based offerings.

Indian coffee needs stronger recognition worldwide this calls for focused promotional efforts and active involvement in international coffee shows and exhibitions. As buyers increasingly prefer coffee grown with environmental and social responsibility, producers must adopt earth-friendly methods and fair labor standards. Modern digital systems and tools can streamline operations from farm to cup while boosting transparency and ways to connect with customers.

FAQ

1- What are the main types of coffee grown in India?
India primarily grows Arabica and Robusta coffee. Arabica constitutes 70% of production and Robusta 30%.

2- How does Indian coffee differ in taste from other origins?
Indian coffee is known for its full bodied, low acidity profile with notes of spice, nuts and chocolate. Monsooned Malabar is a specialty coffee with a distinctive earthy flavor.

3- What is the harvesting season for coffee in India?
In India, coffee is harvested between November and February. Arabica is harvested in December to January, while Robusta is picked between January to February.

4- How can I best experience India’s coffee culture?
Visit the coffee growing regions of Coorg and Chikmagalur in Karnataka, tour coffee plantations, and experience coffee tasting sessions. Explore artisanal cafes in metro cities for specialty coffee.

5- What sustainability certifications are common for Indian coffee?
Popular sustainability certifications for Indian coffee include Fairtrade, UTZ, Organic, and Rainforest Alliance. These indicate environmentally-friendly and ethical cultivation practices.

6- Where can I buy specialty Indian coffee beans?
Specialty Indian coffee is available on e-commerce websites like Something’s Brewing, The Coffee Barn, and Blue Tokai Coffee Roasters. Cafe Coffee Day and Tata Coffee also sell their premium coffees online.

7- What makes Indian coffee unique?
Indian coffee is known for its distinct flavor profiles, which can be attributed to the country’s unique growing conditions. The shade-grown cultivation method, where coffee plants are grown under a canopy of trees, imparts a mild and less acidic taste to the beans. Additionally, the monsoon processing technique, where harvested beans are exposed to monsoon winds, results in a unique flavor and aroma.

8- How does the Coffee Board of India support coffee growers?
The Coffee Board of India provides a wide range of support services to coffee growers, including:

Subsidies for the establishment of new plantations and the replanting of old ones
Financial assistance for the adoption of sustainable farming practices and quality improvement measures
Research and development activities to improve crop productivity and resilience
Training and extension services to promote best practices in coffee cultivation and processing
Marketing and promotional activities to enhance the visibility and demand for Indian coffee

9- What are the major challenges faced by small scale coffee farmers in India?

Small-scale coffee farmers in India face several challenges, such as:

• Low productivity due to limited access to modern farming techniques and inputs
• Price volatility and lack of bargaining power in the market
• Climate change and weather related risks
• Limited access to credit and financial services
• Inadequate infrastructure and transportation facilities

10- How is the Indian government promoting sustainable coffee cultivation?

The Indian government, through the Coffee Board of India, has been implementing various initiatives to promote sustainable coffee cultivation, such as:

• The “Sustainable Coffee Program” which provides financial incentives for the adoption of eco-friendly practices like shade-grown cultivation and rainwater harvesting
• The “Organic Coffee Production” scheme which supports farmers in transitioning to organic farming methods
• The “Coffee Quality Upgradation” program which focuses on enhancing the quality of coffee through improved harvesting and processing techniques

11- What role do cooperatives play in the Indian coffee industry?

Cooperatives play a crucial role in the Indian coffee industry by:

• Providing small scale farmers with collective bargaining power and better access to markets
• Facilitating the sharing of knowledge, resources, and best practices among members
• Enabling farmers to achieve economies of scale in procurement, processing, and marketing
• Promoting sustainable and ethical practices through certifications like Fair Trade and Rainforest Alliance

12- How has the COVID-19 pandemic affected the Indian coffee industry?

The COVID-19 pandemic has had a significant impact on the Indian coffee industry, leading to:

• Disruptions in the supply chain and logistics, affecting the movement of coffee from farms to markets
• Reduced demand from the hospitality sector due to lockdowns and travel restrictions
• Labor shortages and increased costs due to safety measures and migration of workers
• Delayed payments and cash flow issues for farmers and exporters

However, the industry has shown resilience by adapting to the changing circumstances, focusing on direct-to-consumer sales, and leveraging e-commerce platforms.

13- What are some of the innovative coffee-based products emerging in India?

Some of the innovative coffee-based products gaining popularity in India include:

• Ready-to-drink coffee beverages in various flavors and formats
• Coffee-infused snacks like cookies, cakes, and energy bars
• Coffee-based personal care products like soaps, scrubs, and face masks
• Coffee-flavored beer and cocktails
• Coffee-based health supplements and nutraceuticals

These products cater to the evolving tastes and preferences of Indian consumers, particularly the younger generation.

14- How is technology transforming the Indian coffee industry?

Technology is playing an increasingly important role in the Indian coffee industry, with applications like:

• Precision agriculture using satellite imagery, drones, and sensor-based systems to optimize crop management
• Blockchain-based traceability systems to ensure transparency and authenticity in the supply chain
• E-commerce platforms and mobile apps for direct-to-consumer sales and customer engagement
• Data analytics and artificial intelligence for demand forecasting, quality control, and risk management

The adoption of these technologies is helping the industry to become more efficient, transparent, and responsive to market demands.

15- What are the major export destinations for Indian coffee?

The major export destinations for Indian coffee include:

• European Union countries like Italy, Germany, and Belgium
• Russia and other CIS countries
• United States and Canada
• Middle Eastern countries like Saudi Arabia and the UAE
• Southeast Asian countries like Indonesia and Malaysia

India’s coffee exports have been growing steadily in recent years, thanks to the increasing recognition of the quality and unique characteristics of Indian coffee in the global market.

16- What are the key factors driving the growth of coffee consumption in India?

The key factors driving the growth of coffee consumption in India include:

• Rising disposable incomes and changing lifestyles of the middle class
• Growing urban café culture and the popularization of specialty coffee
• Increasing health consciousness and the perception of coffee as a healthier alternative to tea
• Influenced by Western trends and the global popularity of coffee chains like Starbucks and Costa Coffee
• Expansion of the organized retail sector and the availability of a wide range of coffee products

The Indian coffee market is expected to continue its growth trajectory in the coming years, driven by these factors and the increasing preference for premium and value-added coffee products.