India’s Coffee Industry Set to Grow 8.9% Annually, Could Reach $3.2 Billion by 2028

New Delhi: India’s coffee industry is expected to grow at a compound annual growth rate (CAGR) of 8.9% by 2028, with the out-of-home coffee segment projected to expand even faster — at 15–20% CAGR — to reach between $2.6 billion and $3.2 billion, according to an official statement released on Saturday.

The Coffee Board of India has set an ambitious target of scaling national coffee production to 9 lakh tonnes by 2047, strengthening India’s position as a major global coffee producer. At present, India produces around 3.6 lakh tonnes of coffee annually, of which nearly 70% is exported to 128 countries.

India’s reputation for premium coffee continues to rise, thanks to specialty varieties such as Monsooned Malabar, Mysore Nuggets, and Koraput Coffee gaining global recognition.

The success of tribal cooperatives — notably the Tribal Development Co-operative Corporation of Odisha Ltd (TDCCOL) — has demonstrated how coffee cultivation can drive socio-economic development and create sustainable livelihoods. Smallholder farmers form the backbone of the sector, accounting for 99% of coffee holdings and nearly 70% of national production.

Policy support, including GST reductions and new free trade agreements such as the India–UK Comprehensive Economic and Trade Agreement (CETA), has opened up greater opportunities for value-added coffee exports.

Coffee exports have crossed $1 billion for four consecutive years, reaching a historic high of $1.8 billion in FY25 — a 40% jump from $1.29 billion the previous year. Despite global challenges, exports during April–September 2025 touched $1.07 billion, up 15.5% compared to the same period in 2024.

A recent GST cut — from 18% to 5% on coffee extracts and essences — is expected to lower retail prices by 11–12%, boost domestic consumption, and increase profitability for small coffee processors, the statement added.

With inputs from IANS