Tariff Pressures Brew Trouble for Indian Coffee Farmers as Global Market Shows Steady Growth
8th April, 2025, Indian coffee producers struggle with declining market rates for their agricultural output because of worldwide trade restrictions and reduced foreign market imports. The current price Indian coffee producers earn for arabica parchment beans amounts to just ₹7,500 per 50 kg bag, yet their production expenses exceed ₹10,000–₹11,000 per bag. The worsening cost-price disparity for smallholder coffee farmers has sparked sustainability doubts within Karnataka, Kerala, and Tamil Nadu, where these states lead coffee production.
Several factors drive the decrease in market prices according to exporters, such as existing tariffs, which major customers like the European Union, United Kingdom, and United States have increased. New regulations and strict EU sustainability compliance norms make Indian coffee exports more complex and costly. Foreign exporters lower their initial prices because they must compete successfully in international markets.
The challenges faced by Indian export companies that market coffee face additional hurdles due to the implementation of significant policy barriers. The total volume of exported Indian coffee in 2023 reached 4.02 lakh tonnes with a market value of ₹8,228 crore yet experienced a downward trend over 2022 when 4.43 lakh tonnes worth ₹8,955 crore were exported. Market analysts and growers find that existing policy conditions combined with economic volatility have deteriorated both profit margins and the spirits of industry stakeholders throughout production operations.
The worldwide coffee sector maintains robust and steady expansion regardless of production obstacles faced in India. According to Coherent Market Insights, the global coffee market demonstrated significant financial progress using a compound annual growth rate (CAGR) of 4.72%, which exceeded US$ 145.84 billion in 2025 and will exceed US$ 201.41 billion by 2032. The entire coffee market demonstrates sustained growth because more millennials and members of Gen Z appreciate unique coffee selections sourced sustainably and prepared easily for their enjoyment.
“New preferences for drinking coffee at home and recent innovations in cold brew and RTD beverages have transformed industry patterns. The growth of emerging economies combined with urbanization has elevated coffee consumption as significant market players develop their product lines through premium innovations and digital market channels.” Says lead CMI analyst.
Global trends will benefit Indian producers only when they receive immediate policy intervention. Multiple industry leaders request the Indian government to secure advantageous trade contracts while streamlining compliance standards in new international protocols. The addition of processing along with domestic branding activities would boost profits and minimize Indian coffee producers' dependence on exporting raw materials.
Additional factors besides climate change create an impending danger. The unpredictable rainfall and temperature rise affect bean production quality while requiring immediate implementation of climate-resistant agricultural practices and research-based institutional programs that provide irrigation support and training to farmers.
The present state of affairs exposes a fundamental turning point for the Indian coffee industry. Within the global market, Indian growers face a challenging future because decisive steps must be taken regarding pricing pressures and tariff barriers, or remaining viable will become difficult. The world's escalating coffee demand enables Indian coffee production to gain further leadership by implementing sustainable initiatives that support farmers through trade reforms and infrastructure development for enduring sector success.
Sources:
News Outlet: The Hindu Business Line
