Understanding the Transforming Demand for Organic Food in India: Growth Opportunities and Challenges

The demand for organic food is picking up speed in India. The size of the market is currently estimated to be about $1.8 to 2.3 billion, with annual growth ranging between 15% and 22% according to different research firms. Domestic demand has increased so much that the value of the Indian market is now many times greater than the amount of organic food the country exports each year (exports were approximately $666 million in FY2024–25). It represents a real change from a decade or so ago when organic crops here were mainly grown for the tables of other people. At the same time, distribution is becoming more widespread. Organic food is now appearing more and more in mainstream supermarkets and in quick-commerce services, not just in specialist stores, and demand is most intense in the metropolitan areas, where both health consciousness and purchasing power are high.

However, it’s still skewed to the top of the income pyramid in a handful of cities, and staples like grains and pulses, where real volume lives, remain under-penetrated. What’s changed is that growth is now broad-based rather than a static niche of committed buyers paying steep premiums. I’d call this closer to an inflection point than a plateau, and the next five years will decide whether it becomes a genuine mass category.

Millennium Newsroom spoke with Arvind Narayanan, Co-founder, Growize Farms to understand this transformation and what possible future we are looking at when it comes to organic food consumption in India.

Price remains one of the biggest barriers to wider adoption of organic food. What are the biggest cost drivers across organic farming from certification and farm inputs to lower initial yields, aggregation, processing and distribution, and what needs to change for organic products to become more affordable without compromising farmers’ incomes?

Overall, research into consumer behaviour indicates that Indian customers are willing to pay about 20% to 30% more for organic products than for conventional ones; but in retail, particularly in the case of speciality and online shops, prices for packaged goods are frequently much higher than this, in some instances considerably so. In my opinion, the main issue in the sector is the gap between what people say they will pay and what they actually have to pay, and it is not really a farming-cost problem; it's a distribution-and-scale problem built on top of that.

Also read: Why is it better to go for a robotic knee replacement surgery than a conventional one?

The main factors contributing to the cost are certification (for an individual small farmer the cost of NPOP is generally between ₹15,000 and ₹50,000 per year depending on the size of the farm and the certification body, whereas PGS-India is almost free but its certification is not accepted for export); the three-year conversion period, when crop yields usually fall before the organic input systems become established; and fragmentation - the fact that the holdings are small and dispersed, making it expensive to combine them into large, consistent batches that a retailer or processor needs.

The solution does not involve getting farmers to accept lower incomes; instead, it removes the cost element from the process. Through group certification via Farmer Producer Organisations, where a single audit applies to the entire group rather than each farm separately, the per-farmer certification cost can be reduced by a factor of ten. Government programs such as PKVY, which offer about ₹31,500 per hectare over three years, including direct-benefit-transfer assistance for organic inputs, were set up specifically to address the income gap that arises during the conversion period, and it is essential that the disbursement of funds be both quicker and more widespread. Also, bringing organic staple foods into mainstream retail at the prices charged by organized retailers, rather than keeping them in the specialty channels, is the most important factor in making them affordable.

India has expanded its organic cultivation base, but the sector still faces challenges around fragmented farms, inconsistent supply and quality, certification and traceability. What are the biggest supply-side bottlenecks preventing organic farming companies from scaling, and how can technology, farmer aggregation and better supply chains address them?

India has more certified organic farmers than any other country, with over two million, yet most hold one or two acres, so scale never quite becomes consistent. The real bottlenecks are patchy documentation (NPOP certification depends on meticulous farm diaries, and missing records are one of the most common reasons certification stalls), quality variability across thousands of small farms sold under one label, and traceability that stops at the export gate - APEDA’s TraceNet system, recently upgraded to TraceNet 2.0, tracks certified product rigorously for export, but that same rigour rarely extends into domestic retail.

Also read: Eating for Baby's Health, Not for Two. A First-Trimester Nutrition Guide Every Expecting Mother Needs

Aggregation and technology solve this together: legally recognized farmer-group certification now formally strengthened under the latest NPOP standards lets one audit cover a whole collective, cutting cost and improving consistency at once; simple digital record-keeping apps remove the top cause of certification failure; and extending TraceNet-style, QR-linked traceability down to the retail shelf, not just the export shipment, is the highest-leverage investment the industry could make.

Consumer trust is particularly important in a market where products can command a significant premium. How can the industry strengthen certification, traceability and transparency so that consumers can distinguish genuinely certified organic products from products that use “natural”, “chemical-free” or other similar claims as marketing propositions?

“Organic” is a legally regulated term in India: a product can only carry the claim if it’s certified under NPOP or PGS-India, and it should carry Jaivik Bharat - FSSAI’s unified organic logo, introduced to sit alongside the underlying NPOP or PGS-India certification and help consumers spot genuine certification at a glance. “Natural,” “chemical-free”, and similar phrases carry none of that weight - a brand can print them with no third-party verification at all. Adding to the confusion, the government’s own National Mission on Natural Farming promotes “natural farming” as a distinct agronomic practice closer to a zero-external-input approach, formally separate from certified organic. So an uncertified “natural” product can sit right next to a certified organic one at a similar price, with no easy way for a shopper to tell them apart. FSSAI reviewed proposals in 2025 to narrow the exemptions that let some small organic producers sell directly to consumers without a full third-party audit, and farmer groups pushed back hard, arguing this is a labelling problem, not a food-safety one.

What would help is requiring minimum substantiation before a product can carry an unqualified claim like “natural”; retailers and e-commerce platforms limiting “organic” listings to products with a verifiable certificate number; and extending export-grade traceability to domestic shelves. Consumers already pay a premium for organic; what they’re increasingly unwilling to do is pay it on faith.

India’s organic exports are growing, with markets such as the US, European Union, Great Britain, Canada, Australia and Japan among the important destinations. Where do you see India’s greatest international opportunity, and what must Indian organic producers improve in terms of quality, certification, consistency, processing and value addition to compete more effectively globally?

India’s organic exports were roughly $666 million in FY2024–25, recovering from a dip the year before, against an APEDA target of $2 billion by 2030. The US and EU dominate, followed by the UK, Canada, Australia and Japan.

The sharpest opportunity is spices and high-value botanicals - India’s agro-climatic range is hard to replicate, and certified organic spices command 20–100%+ premiums in US and EU retail. But the bigger structural opportunity is moving up the value chain: India still exports a large share of its organic output as raw or lightly processed commodities, when the real margin sits in processed, branded, traceable products.

Three priorities: finalising certification equivalency with Canada, Australia and Japan (equivalency with EU organic standards already exists, so NPOP-certified exporters don’t need to re-certify there); tightening residue-testing infrastructure, since a single flagged shipment can damage trust in an entire origin; and building processing and value-addition capacity so India shows up at fairs like BIOFACH - the world’s largest organic trade fair with finished, differentiated products, not bulk lots.

Looking ahead over the next five to ten years, what will determine whether India’s organic farming industry becomes a large-scale and economically sustainable agricultural sector—greater domestic consumption, export growth, government support, new farming technologies, climate-resilient practices or greater participation from private companies—and what should the industry prioritise today to achieve that transition?

This is a question about sequencing, not one that involves a single lever. Farmer economics forms the basis of the matter and, if the three-year conversion period continues to wipe out farmers' incomes without any support, then nothing else becomes important. PKVY currently does this for organic farmers specifically, and there is now a more recent, complementary scheme - the National Mission on Natural Farming which provides similar input-cost support to natural farming, a related but formally separate approach to the transition. Both schemes need to be expanded more quickly and applied to more farmers, just as the FPO-based aggregation I mentioned earlier does.

Also Read: India’s Food Safety Problem Is No Longer Just About Adulteration

I would put greater faith in domestic consumption than in exports as the main driver of growth since it is increasing more rapidly, starting from a bigger base, and is less affected by fluctuations in currency and trade. Climate resilience is being overlooked: organic and regenerative methods create real resilience against unpredictable monsoons, so this is becoming primarily a matter of risk management rather than just lifestyle. Moreover, private capital is acting as a true positive force at Growize Farms, our technology-enabled aeroponic farming platform, for we have noticed a strong demand for food production that can be verifiably traced, which shows that this demand goes well beyond the organic label itself.

If I had to pick a single priority, it should be to stop viewing affordability, trust, and scale as distinct issues; all are effects of the same fragmented and costly supply chain. By fixing the aggregation and traceability backbone, organic farming stops remaining a niche concern and becomes a story about how India can feed itself safely on a large scale.