India’s coffee industry set for 8.9 per cent CAGR growth, driven by out-of-home demand

New Delhi: India’s coffee industry is projected to grow at a compound annual growth rate (CAGR) of 8.9 per cent by 2028, supported by rapid expansion in the out-of-home segment, which is expected to rise 15–20 per cent annually to reach $2.6 billion–$3.2 billion, according to an official statement issued on Saturday.

The Coffee Board of India has set a target to scale national production to 9 lakh tonnes by 2047, strengthening the country’s position among major coffee-producing nations.

India currently produces around 3.6 lakh tonnes of coffee every year, with nearly 70 per cent exported to 128 countries. The growing popularity of speciality coffees, such as Monsooned Malabar, Mysore Nuggets and Koraput Coffee, has boosted India’s profile as a supplier of premium and globally competitive varieties.

The government highlighted the success of tribal cooperatives, including the Tribal Development Co-operative Corporation of Odisha Ltd (TDCCOL), which has demonstrated how coffee cultivation can drive socio-economic uplift and support sustainable livelihoods.

Coffee production in India is largely smallholder-driven, with nearly 99 per cent of growers falling under the smallholding category and contributing 70 per cent of total output. The sector remains an essential contributor to the rural economy.

Policy measures such as GST rationalisation and new free-trade agreements, including the India–UK Comprehensive Economic and Trade Agreement (CETA), have opened fresh opportunities for value-added coffee exports.

India’s coffee exports have crossed $1 billion for four consecutive years, touching a record $1.8 billion in FY25, a 40 per cent jump from $1.29 billion the previous year. Despite global geopolitical challenges, exports between April and September 2025 totalled $1.07 billion, up 15.5 per cent year-on-year.

The cut in GST on coffee extracts and essences from 18 per cent to 5 per cent is expected to reduce retail prices by 11–12 per cent, boost domestic consumption and improve margins for small processors, the statement added.

IANS

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