Industry Odisha Bureau, Sep 06: India is considering wider FDI liberalisation in its plantation sector. Bananas are among the commercial crops under discussion. The Commerce and Industry Ministry is consulting stakeholders on the proposal. India already leads the world in banana production. Yet its global banana export share remains only 1 per cent.
Currently, 100 per cent FDI is allowed under the automatic route in specified plantations. These include tea, coffee, rubber, cardamom, palm, and olive oil tree plantations. FDI is not permitted in other plantation activities beyond these. Bananas do not currently qualify for automatic-route investment.
The government is now exploring bringing more commercial crops into this framework. An official said liberalisation is being examined specifically for banana plantations. This remains a proposal, not an approved policy change. No timeline or investment figures have been finalised yet.
India produces over 30 million tonnes of bananas annually. The country accounts for 26.45 per cent of global banana production. Global production stood at 35.36 million metric tonnes. This makes India the single largest banana-producing nation worldwide.
However, production dominance has not translated into export strength. India’s share of the global banana export market is just 1 per cent. This gap highlights untapped potential in the plantation sector. Wider FDI access could help narrow this disparity over time.
In 2024-25, India’s banana exports were valued at $377.5 million. This marked roughly 30 per cent year-on-year growth. The momentum reflects rising overseas demand for Indian bananas. India aims to push banana exports toward $1 billion.
Major existing markets include Iran, Iraq, UAE, and Oman. Uzbekistan, Saudi Arabia, Nepal, Qatar, and Kuwait also feature prominently. Bahrain, Afghanistan, and the Maldives round out key destinations. Additional opportunities exist in the US, Russia, and Japan. Germany, China, the Netherlands, UK, and France are also potential markets.
Banana production remains concentrated in a handful of states. Andhra Pradesh is India’s largest banana-producing state. Maharashtra, Karnataka, Tamil Nadu, and Uttar Pradesh follow closely behind. Together, these five states contributed around 67 per cent of production in 2022-23.
Separately, India has already attracted FDI in other plantation crops. Tea and coffee drew $295.23 million between April 2000 and March 2026. Rubber goods, distinct from rubber plantations, received $3.93 billion in the same period.
Wider FDI liberalisation could open new investment channels for bananas. Combined with India’s production scale, this may strengthen its export ambitions. The plantation sector’s evolving FDI framework will be closely watched by stakeholders.
