Current Landscape of the Indian Coffee Industry

Last updated on:

June 23, 2025

Picture this: a 17th-century Sufi saint returning from his pilgrimage to Mecca, carrying a secret treasure hidden in his beard. No, it wasn’t jewels or gold-it was seven coffee beans that would eventually transform India into one of the world’s leading coffee producers. Today, as you sip your morning brew, there’s a fascinating story behind how coffee came to flourish in India’s lush hills, and an even more intriguing tale about where the industry stands today.

The legendary journey of Baba Budan
Overcoming early obstacles
Where coffee grows in India today
Arabica versus Robusta: India’s coffee varieties
India’s position in the global coffee market
Contemporary challenges facing the industry
The persistent threat of pests and diseases
Economic pressures and rising costs
Bright spots and future outlook

The legendary journey of Baba Budan

Coffee’s arrival in India is wrapped in legend and daring adventure. Around the 1600s, Baba Budan, a revered Sufi saint from Karnataka, embarked on a pilgrimage to Mecca. During his journey through Yemen’s port of Mocha, he discovered a beverage called ‘qahwa’ that captivated him completely. The problem? At that time, the Arabs maintained a strict monopoly on coffee cultivation. They only exported roasted beans to prevent anyone else from growing the precious crop, and smuggling raw seeds was punishable by death.

But Baba Budan was determined. According to popular lore, he concealed seven raw coffee beans in his thick beard-seven being a sacred number in Islam-and carried them across thousands of kilometers back to India. Upon reaching the Chandragiri hills in what is now Chikmagalur district of Karnataka, he planted these beans in the courtyard of his hermitage. The coffee plants thrived in the misty, fertile slopes of the Western Ghats, marking the genesis of India’s coffee cultivation. Today, these hills are known as Baba Budan Giri (Baba Budan Hills) in honor of the saint who defied death to bring coffee to Indian soil.

Overcoming early obstacles

The coffee industry’s journey in India wasn’t smooth sailing from the start. After Baba Budan’s initial planting, the first commercial plantation was established around 1840 in the Baba Budan Giri region. However, early coffee growers faced significant challenges from pests and diseases that threatened their crops.

The white stem borer emerged as a particularly devastating pest, boring into coffee plant stems and causing severe damage. Coffee leaf rust, another formidable enemy, attacked the leaves and reduced yields dramatically. These biological threats, combined with the learning curve of cultivating a new crop in Indian conditions, meant that the early decades of coffee farming required considerable resilience and adaptation. Many farmers had to shift from Arabica to more resilient Robusta varieties to cope with these challenges, a trend that continues to shape India’s coffee production today.

Where coffee grows in India today

Fast forward to the present, and India’s coffee landscape has evolved into a thriving industry concentrated primarily in three southern states. Karnataka remains the undisputed leader, producing over 266,000 metric tons in recent years, which accounts for approximately 71% of India’s total coffee production. Think of Karnataka as India’s coffee heartland-if it were a country, it would rank among the top coffee producers globally on its own.

Kerala follows as the second-largest producer, contributing about 20% of national production, while Tamil Nadu rounds out the top three with around 5% of total output. What’s particularly interesting is that Tamil Nadu’s Nilgiri district has carved out a reputation for Arabica cultivation, producing coffee with distinct flavor profiles prized by specialty coffee enthusiasts.

Beyond these traditional powerhouses, coffee cultivation has been expanding into non-traditional areas. States like Odisha and regions in northeastern India are experimenting with coffee farming, driven by favorable microclimates and government support. For instance, Japan’s commitment to purchase coffee from Manipur has spurred production in areas like Chandel and Nongmaiching Hills, regions once considered unsuitable for coffee cultivation.

Arabica versus Robusta: India’s coffee varieties

India produces both major coffee varieties, but with a clear preference. Robusta coffee dominates Indian production, accounting for approximately 72% of total output. This isn’t by accident-Robusta varieties are hardier, more resistant to pests and diseases, and thrive in India’s lower elevations. They produce coffee with stronger, more bitter flavors that European markets particularly appreciate for espresso blends.

Arabica, the variety Baba Budan originally brought to India, now represents about 28% of production. Grown primarily at higher elevations in Karnataka and Tamil Nadu, Indian Arabica is known for its milder, more aromatic qualities. India has become recognized as the world’s highest-quality producer of Robusta, filling a unique niche in the global coffee market.

India’s position in the global coffee market

Numbers tell a compelling story about India’s coffee industry. Production reached approximately 374,000 metric tons in fiscal year 2024, making India the seventh-largest coffee producer globally. This represents roughly 4-5% of worldwide coffee production-a modest but significant contribution to the global coffee supply.

What makes these figures even more impressive is their export performance. India’s coffee exports hit a record $1.26 billion in fiscal year 2024, marking the third consecutive year of record-breaking export values. This growth came despite a slight volume decrease, highlighting how Indian coffee commands premium prices in international markets.

About two-thirds of India’s coffee production finds its way to international markets. Europe remains the primary destination, absorbing roughly 70% of exports, with Italy alone accounting for 20% of bean coffee exports. The Russian Federation, Germany, Belgium, and the United Arab Emirates are other major importers. This export orientation means that Indian coffee farmers are deeply connected to global market dynamics and price fluctuations.

Contemporary challenges facing the industry

Despite its success, India’s coffee industry faces mounting pressures that threaten its sustainability. Climate change has emerged as perhaps the most significant long-term challenge. Unpredictable weather patterns, insufficient rainfall, temperature fluctuations, and extreme weather events are affecting coffee growth across India’s coffee belt.

Between 2015 and 2022, coffee-growing regions experienced a rollercoaster of weather extremes-droughts followed by unseasonal heavy rains, floods, and devastating landslides. These climate disruptions don’t just affect yield; they fundamentally alter growing conditions, making traditional farming practices less reliable. Coffee plants require specific combinations of wet and dry periods, and when these patterns become unpredictable, production suffers.

The persistent threat of pests and diseases

Climate change has amplified another chronic challenge: pests and diseases. The white stem borer, coffee berry borer, coffee leaf rust, and coffee wilt disease continue to plague plantations. Changing climatic conditions help these pests breed more readily and facilitate the emergence of new diseases, further stressing coffee plantations.

What makes this particularly challenging for Indian farmers is the cost of control measures. With 98% of coffee growers being small-scale farmers, they often lack the resources for comprehensive pest management programs. The situation creates a vicious cycle: pests reduce yields, lower yields mean less income, and less income means fewer resources to combat pests.

Economic pressures and rising costs

The economics of coffee farming in India have become increasingly challenging. While international coffee prices have risen by over 25%, the cost of cultivation has surged by 250%. Labor costs constitute 60-70% of total plantation expenditure, compared to just 25% in countries like Brazil. This labor intensity, combined with India’s difficult terrain that limits mechanization, puts Indian growers at a competitive disadvantage.

Input costs for fertilizers and agrochemicals have increased by nearly 20% year-on-year, while financing remains expensive for small and medium-sized growers who often cannot provide collateral. Interest rates hover around 12%, compared to single-digit rates available to competitors in other countries.

Bright spots and future outlook

Despite these challenges, the Indian coffee industry shows remarkable resilience and promising developments. The recent surge in Robusta prices-hitting 30-year highs due to supply constraints in Vietnam and Brazil-has significantly benefited Indian exporters. Indian Robusta now fetches premiums over London terminal prices, demonstrating the global market’s appreciation for Indian coffee quality.

Domestic consumption is also rising steadily. India’s coffee industry is projected to grow at 8.9% annually, reaching $3.2 billion by 2028. The café culture, particularly among urban youth, is driving increased domestic demand for diverse coffee preparations. The reduction of GST from 18% to 5% on coffee extracts is expected to further boost domestic consumption.

Specialty coffee presents another avenue for growth. Indian varieties like Monsooned Malabar-created by exposing beans to monsoon winds-and coffee from specific estates are gaining recognition among specialty coffee enthusiasts worldwide. The industry provides direct employment to over 2 million people, making it crucial for rural livelihoods in hilly regions where alternative crops are limited.

Innovation and adaptation continue as well. Indian farmers are at the forefront of developing climate-resilient farming practices, including shade-grown coffee systems that protect biodiversity while producing quality beans. Research institutions are breeding disease-resistant varieties, and many farmers are diversifying income through coffee tourism and value-added processing.

What do you think? How can we as consumers support sustainable coffee production in India while ensuring farmers receive fair compensation for their labor? And what role should technology and innovation play in helping traditional coffee-growing communities adapt to climate change while preserving their cultural heritage and farming practices?

References

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Current Landscape of the Indian Coffee Industry

Table of Contents

The legendary journey of Baba Budan 🔗

Overcoming early obstacles 🔗

Where coffee grows in India today 🔗

Arabica versus Robusta: India’s coffee varieties 🔗

India’s position in the global coffee market 🔗

Contemporary challenges facing the industry 🔗

The persistent threat of pests and diseases 🔗

Economic pressures and rising costs 🔗

Bright spots and future outlook 🔗