ICRIER Release Report to Make Turmeric Global

· Testing and Multiple Standard by Official Barriers in Exports

Executive Summary

Introduction

Known as the 'Golden Spice of India', turmeric, due to its preventive, therapeutic and curative properties, has been integral to Indian and many South Asian cultures, cuisines, and traditional systems of medicine like Ayurveda and Unani. It is commonly used as a condiment, dye, drug and key raw material for the cosmetic industry, and in traditional medicine and religious ceremonies. The turmeric market value was around USD 58.2 million in 2020 and is projected to grow at a CAGR of 16.1 per cent from 2020 to 2028. Rising awareness of curcumin's medicinal benefits has fuelled an increase in turmeric demand. Consequently, in 2023, global turmeric trade was valued at USD 587 million, with exports at USD 320 million. The export value increased by 13.56 per cent between 2017 and 2023.

Turmeric is produced in various regions, such as Africa (Tanzania, Nigeria, and Ethiopia), Asia (China), South Asia (India, Bangladesh, Sri Lanka, Myanmar) and South America (Brazil, Peru), with these regions also being the largest consumers. Emerging markets like the United States of America (USA) and the European Un ion (EU) are rapidly adopting turmeric for nutraceuticals and food applications, especially after COVID-19, as consumers seek healthier options. India, as the leading producer, consumer and exporter, accounted for 73.40 per cent of global production in FY 2022-23. India's export value rose from USD 182.53 million (2017) to USD 212.65 million (2023). The de mand for high-curcumin and organic varieties of turmeric has also been rising because of its diverse end-uses and affordability. Developed markets like the EU and the USA are emerging as key hubs for high-quality turmeric that meets stringent SPS and quality standards. In this context, India can become a turmeric pro duction hub and widen its consumer base by expanding exports to destination countries other than South Asia.

Overview of the Turmeric Sector in India vis-a-vis Global Turmeric Sector

In 2022, global turmeric exports reached 238.81 thousand tonnes, up from 157.68 thousand tonnes in 2017. Turmeric exports peaked in 2020, reflecting a surge in demand for curcumin-based products during the COVID-19 pandemic.

India, being the largest producer and exporter, has solidified its market dominance by increasing its export value from USD 182.53 million in 2017 to USD 212.65 million in 2023 (see Table 1), with its global market share rising from 71.55 per cent to 73.40 per cent during the period.

The overall production of turmeric in India in creased from 2012-13 to 2022-23, with fluctuating trends. Demand and production rose after the pandemic, but price fluctuation led to output fluctuation. Although there was an increase in cultivated area, turmeric yield per hectare declined by a CAG R of approximately 3.24 per cent between 2012-13 and 2022-23.

This reflects the challenge of maintaining yield efficiency.

According to the Ministry of Agriculture and Farmers ' Welfare 2024 (Third Advance Estimate of FY 2023-24), 297,460 hectares of land is under turmeric cultivation in India, with an expected production of 1, 041, 730 MT.

As the Government of India aims to make India the global turmeric production hub, the Ministry of Commerce and Industry projects that India's turmeric exports will reach USD 1 billion by 2030.

- State-wise Turmeric Production

Between 2012-13 and 2022 -23, India's turmeric production and cultivation across states has undergone significant changes. Maharashtra, Telangana, Tamil Nadu, Karnataka, Madhya Pradesh, Andhra Pradesh and Odisha are some of the top turmeric-producing states. While Gujarat, Haryana, and Manipur have dropped out of the top 10 turmeric producing states, Maharashtra and Odisha have emerged as key producers as of 2022-23. Over 30 varieties of turmeric are cultivated in India across more than 20 states, with both local and improved varieties developed by agricultural research institutions.

Local varieties possess certain qualities and characteristics based on the specific geographical location. These varieties vary in curcumin content, yield and disease resistance. To protect and promote the reputation and unique ness tied to the respective region, they get a geographical indication (GI) tag. India has six GI tags for turmeric (see Table 2).

To maintain India's global dominance, it needs to evolve from being just a raw turmeric supplier by innovating, ensuring quality, and adopting sustainable practices. Several companies have already taken strides in this direction and produce curcumin extracts for pharmaceuticals and nutraceuticals. Products like Vicco Turmeric Cream merge turmeric with modern cosmetics, linking Ayurvedic traditions with contemporary personal care. High-curcumin variants like Alleppey and Lakadong turmeric are gaining international attention for their medicinal benefits.

Methodology

The study is based on secondary data and information analysis, and a primary survey of diverse stakeholders in the turmeric value chain. The stakeholder s included farmers, farmer producer organisations (FPOs), companies, certification bodies, laboratories, government agencies, and non-governmental organisations (NGOs) across six states, namely Telangana, Tamil Nadu, Maharashtra, Meghalaya, Odisha, and Madhya Pradesh. There were two stake holder consultations, multiple case studies and key informant interviews, and a semi-structured questionnaire -based survey, ensuring a comprehensive representation of the perspectives of over 500 stakeholders.

Key Findings of the Primary Survey

The semi-structured questionnaire-based sur vey covered 262 farmers, 45 FPOs, and 69 companies engaged in the turmeric value chain.

- Farmer Survey

The survey revealed that most turmeric farmers (80 per cent) earned less than 50 per cent of their annual income from turmeric. This is largely due to their reliance on cultivating multiple crops like paddy, soybean, maize, sugarcane, and cotton.

The decline in turmeric production in recent years is due to fluctuating prices and gaps in market access, highlighting the need for targeted support to stabilise turmeric cultivation.

Farmers also reported a decline in turmeric cultivation in the last three years, stating several reasons, like a sudden fall in prices, inadequate infrastructure, unfavourable weather conditions, pest infestations, inability to connect to the right buyers and issues related to soil fertility. Some other findings are given in Figure 1.

Farmers are either conventional farmers or organic farmers. Organic farmers can be (a) default organic/natural, (b) third-party certified organic farmer under National Pro gramme for Organic Production (NPOP) of Agricultural and Processed Food Products Export Development Authority (APEDA), and (c) self-certified under the Participatory Guarantee System of India (PGS-India) of the National Centre of Organic Farming (NCOF).

A probit model was used to identify the primary determinants that influence the farmer's choice between conventional and organic farming in turmeric cultivation.1 The dependent variable is a binary variable representing the choice of farming method adopted by a turmeric farmer. The key findings are presented in Figure 2.

While the farmland holding varies across states, most turmeric farmers in India are small and marginal farmers. There are state-wise differences in farming methods, reflecting the state's socio-economic and institutional dynamics. For example, turmeric farmers in Meghalaya practice co-operative farming, while farmers in Tamil Nadu, Madhya Pradesh, Maharashtra, and Odisha are either doing their own farming or contract farming. These farmers highlighted the following multiple benefits of contract farming:

· Security and support in agricultural practices from companies

· Access to quality seeds, fertilisers and other inputs, reasonable pricing and reduced risk exposure

· Training and knowledge sharing like free integrated pest management (IPM) kits

· Guidance on efficient fertiliser application to help optimise crop yield and quality.

Various factors, including curcumin content, market demand, and GI, influence the market price of turmeric. For example, in Meghalaya, the Lakadong variety is renowned for its high curcumin content, market value, and GI tag. In 2024, this variety sold at an average price of INR 32.14 per kilogram for raw turmeric, while its dried and powdered forms fetched INR 179.47 per kilogram and INR 266.66 per kilogram, respectively. The Erode Manjal variety, GI-tagged but with lower curcumin content ranging from 2.5 to 4.5 per cent, sold for INR 152 per kilo- gram for dried turmeric in 2024 (see Table 2).

Furthermore, global value chains are reshaping themselves as consumer demand shifts to wards organically cultivated turmeric with high curcumin content. Although organic turmeric fetches a higher price in the market, the transition from conventional to organic farming is often a rigorous and expensive process. This creates financial strain and uncertainty for farmers, discouraging them from making the switch.

Enhancing finance, marketing, co-operatives, and regulated market access is essential to empower farmers and boost output

- FPO Survey

The survey highlighted the essential support FPOs offer to farmers, especially small and marginal ones (over 80 per cent of FPO members), by providing inputs, post-harvest processing, aggregation, marketing and better price negotiations. Some key findings are presented in Figure 3.

FPOs attributed the decline in turmeric production to frequent market price fluctuations. De spite government assistance to FPOs through different schemes at both the central and state levels, the number of FPOs registered and re ceiving assistance under the schemes was less than 10. Most of the surveyed FPOs, registered as MSMEs, receive several benefits, as shown in Figure 4.

FPOs need comprehensive support to bolster their operations, expand their market reach, and boost their overall sustainability.

However, they continue to face the following constraints:

i. Market linkages and information/knowledge gap

ii. Visibility to buyers since they are not listed under spices or turmeric on government portals

iii. Getting credit and accessing benefits/ subsidies.

- Company Survey

The surveyed companies encompass manufacturers, wholesalers, exporters, retail and contract farming companies, and companies handling turmeric products (whole turmeric, turmeric powder and turmeric extracts). Some of the key findings of the company survey are presented in Figure 5.

Companies source turmeric through multiple channels, including farmers, FPOs, organic clusters, e-NAM, regulated market s and traders, with over 50 per cent of the companies re lying on mandi agents, commission agents and local traders, sourcing both organic and conventional turmeric.

With an expected growth rate of more than 15 per cent, the companies also intend to diversify their turmeric portfolio in the next five years (see Figure 6).

The survey highlighted that the use of turmeric has expanded globally, with foreign firms sourcing turmeric from India and Indian firms growing internationally.

Some Roadblocks to India's Leadership in Turmeric Production

Despite holding a commanding share exceeding 62 per cent of global turmeric trade, India faces challenges that impede further growth, ranging from the rejection of spices in key export markets to price fluctuations leading to farmers withdrawing from the cultivation of turmeric to not meeting the desired curcumin levels re quired by companies (see Figure 7).

We are only able to supply 10 per cent of turmeric products with the high curcumin content required by global clients. Fragmented supply chains, lack of uniform quality of produce, lack of access to high-quality inputs, gaps in testing and certification, lack of traceability, targeted subsidies and support, and infrastructure gaps are some of the issues that stem from the complex institutional structure for governance. With varying end-uses of turmeric, there exist multiple organisations, each with its own regulations, policies and governance, depending on end-use and production. There are different regulatory bodies for domestic markets and exports. Multiple agencies, such as the Spices Board India, APEDA, Food Safety and Standards Authority of India (FSSAI) and Bureau of Indian Standards (BIS), set standards for agricultural produce. The Spices Board India looks at processed turmeric, while APEDA covers fresh turmeric. Each of these agencies have onboarded different laboratories and ask for different compliance requirements. Additionally, although domestic turmeric may align with international standards such as the CODEX Alimentarius, it is low on curcumin (2 per cent), which does not meet the global demand for turmeric varieties of high curcumin content (5 per cent or more). We do not have mutual recognition agreements with key markets for processed organic produced.

Globally, rising consumer awareness regarding food safety and standards has resulted in strict er border review processes and requirements in export partners. Recently, border refusals of Indian spices have become more frequent and non-compliance with safety standards has become a major issue. Instances of adulteration in turmeric by manufacturers seeking to profiteer by using low-cost raw materials and additives have also resulted in the rejection of turmeric by global buyers.

Pathways to a Resilient Future: How Can India Retain its Leadership Position and Move up the Value Chain?

The Government of India is aware of the issues, and the Honourable Prime Minister announced the setting up of the National Turmeric Board to resolve some of the issues related to regulatory gaps, quality and standards, research and product development, etc. Establishing a single nodal agency like the National Turmeric Board can ensure quality standards, traceability and streamline certification and testing processes. Once the domestic quality and standards are in order, signing mutual recognition agreements for standards and certification for both fresh and processed turmeric with key export markets can reduce the compliance burden and enhance trade. Subsidies should be linked to help develop high -end product value chains. For example, there can be subsidies for third -party certification, cultivation of high curcumin varieties, research and development (R&D) for value-added turmeric products and for promoting GI products. Investments in post-harvest infrastructure, scaling up turmeric FPOs and fostering knowledge sharing through R&D and global collaborations are crucial for maintaining competitiveness.

Promoting high-curcumin varieties and leveraging international platforms can solidify India's position as a leading turmeric exporter.

To help India retain its leadership position, it is urgent to replicate the different collaborative models and best practices discussed in this re port. Collaborative platforms involving policymakers, traders, corporations and processors are instrumental in developing effective strategies. Industry events such as the World Spice Congress and Global Turmeric Conference pro vide valuable opportunities for knowledge sharing, networking and identifying market trends. International platforms such as these can also be used to market India 's success in turmeric, as well as disseminate information about importing country requirements. Capacity building for farmers, processors and exporters can significantly enhance the industry's global competitiveness. By aligning production practices with international benchmarks and fostering a collaborative ecosystem, India can solidify its position as a reliable and preferred supplier of high quality turmeric in the global market.