India-EU Food Trade: A Massive Opportunity

By Cogoport | 09 Sep 19
India-EU Food Trade: A Massive Opportunity

The way to economy’s heart is through the stomachs of consumers. Opportunities in agricultural trade exist for both the EU and India.


Clove, cinnamon, and pepper once propelled global trade. These were as valuable as gold, so trade in spices was brisk, and it had great cultural and economic significance. New maritime trade routes and partnerships were forged and regional eating habits evolved. European demand was the animating force for commodities trading, and, as the world’s second-largest economy, the European Union (EU) still is.

India’s role has been historically important. It was the largest producer of spices, and the trade routes that emerged from the 14th to 17th centuries still exist. It is still a developing economy, but one of the world’s fastest-growing and as it searches for international trade partnerships to sustain its rapid GDP growth, it sees agriproducts as a way to achieve its ambitions.

Modern day India-EU food trade presents a huge opportunity for both parties, albeit that the EU market is fiercely competitive and highly regulated – particularly on food products – and India’s is complicated and less rule-bound.

All eyes on Asia

Globalisation has brought the world closer, and even our palates have benefitted. Foods that were once treasured in a specific region are now being shared with the world. Avocados, Himalayan pink salt, quinoa, cashews and kale are current examples. A wave of Instagram food enthusiasts has given the taste for new foods and added stimulus as their influence spreads across continents.

When it comes to exotic foods demand, Asia is a huge potential market. It is home to more than half the world’s population. Rising disposable incomes and growing food demand have made it a lucrative market for the EU’s food producers. India is at the forefront.

The question then is to find the right opportunities.

India is still largely an agricultural country. Almost half of its labour force is involved in farming, while the corresponding number in the EU is relatively tiny. The amount of arable land in Europe is declining. This will inflate its demand for food imports – an excellent opportunity for Indian exports, which include rice, jute, lentils, onions, and potatoes. Meanwhile, the EU produces an abundance of wine, barley, grapes and olive oil. Globally, demand for olive oil, a European staple, is set to increase, as awareness of its health benefits grows. While both the production and consumption of wine are expected to stabilise within the EU, appetite for it in developing countries, including India, continues to rise.

Other factors contribute. Thanks to the organic food movement, India predicts growing global demand for its spices and lentils. Environmental consciousness will raise awareness of jute as an alternative fabric. The crown jewel of Indian food grains - basmati rice will be sought after as more people switch to gluten-free diets.

Trade-in agriproducts between India and the EU are like pieces of a jigsaw puzzle - ready to take shape.

Regional trade set to boom

Exporters from India who have traditionally looked at western markets realise export business opportunities with their regional counterparts. Given the proximity and blooming economies, the countries within South Asia could be trading among themselves at three times the current levels according to a recent report by the World Bank. It seems the EU is by no means the only game in town.

India is already taking advantage of specific export opportunities in five markets which include – rice to Egypt, onions to Dubai, lily bulbs to Taiwan, sesame to Turkey, and turmeric to Japan. It is also assessing regional markets for organic products such as grapes, mangoes, pineapple, litchi, ginger, and okra. The country seeks to liberalise trade in farm products and amplify international commerce.

India’s export volumes will grow even if regional focus may shift. It’s also clear that there will be a definite increase in demand for imported European goods. Indian consumers will have agriproducts such as fine wine, olive oil, and other native European produce on their shopping lists. These commodities, once considered luxuries for most Indians, are becoming more prevalent.

Opportunities exist for both the EU, the largest trade bloc in the world, and India, the nation that is set to be the most populous by 2024.

Spice traders were paid handsomely in past centuries. Tastes may have changed the items in the shopping baskets of consumers, but for importers and exporters of food products, there is still a thriving business to be done. 

International tradeGlobal TradeTrade War