India Potato Market Outlook to 2030

India Potato Market Overview

• In 2023, potato yield rises with a production of 58.85 million tonnes. The market is projected to grow exponentially by 2028 due to rising population and urbanization and increasing demand from the processed food industry.
• Major players in the India potato market include ITC Limited, PepsiCo India Holdings, Bhatti Agritech, AK Exports and Adkartmart International. These companies have established strong supply chains and invested heavily in processing and harvesting facilities to cater to the growing demand for potato and potato products.
• MS International invested INR 200 crores in 2022 to expand its potato processing plant in Gujarat, increasing its production capacity by 30%. The expansion aims to meet the rising demand for frozen potato products both domestically and in export markets, particularly the Middle East.

India Potato Market Current Analysis

• The use of biotechnology and advanced irrigation techniques has increased potato yields, it has also made the growing Export demand for Indian potatoes, particularly to neighboring countries, has opened new revenue streams for farmers.
• Processed potato products, such as chips, frozen fries, and dehydrated potato products, are among the bestselling items due to their convenience and taste. PepsiCo India and ITC Limited dominate due to their extensive product lines, strong brand recognition, and robust distribution networks across urban and rural areas.
• Uttar Pradesh is the largest potato-producing state in India, accounting for approximately 30% of the country's total production. The state's favorable climate, fertile soil, and government support for agriculture make it a dominant player in the market.

India Potato Market Segmentation

By Product Type: In the India Potato market segmentation by product type is divided into fresh potatoes and processed potatoes. In 2023, fresh potatoes hold the largest market share because they are a fundamental ingredient in Indian cuisine, featured in numerous traditional dishes. Their versatility and essential role in everyday cooking make them a staple in households.

By End-User: In the India Potato market segmentation by end user is divided into household, companies and food services. In 2023, household consumption is the largest segment in the Indian potato market because potatoes are a staple in Indian cuisine, used in a wide variety of dishes and affordability of potatoes make them a preferred choice for everyday cooking.

By Region: In the India Potato market segmentation by region is divided into North, South, East and West India. In 2023, the Northern region, particularly states like Uttar Pradesh and Punjab, dominates the potato market to favorable climatic conditions, extensive agricultural infrastructure, and advanced farming techniques that significantly boost potato yield and production.

India Potato Market Competitive Landscape 

• ITC Limited: In 2023, ITC Limited launched a new range of baked potato snacks targeting health-conscious consumers. This product line, under the brand name "Farmland," leverages ITC's extensive distribution network. The initiative is expected to boost ITC's market share in the potato snack segment within the first year.
• Pepsico: PepsiCo India to invest ₹186 crore for expansion of its largest greenfield foods manufacturing plant that produces the immensely popular LAY'S potato chipsin Kosi Kalan, Mathura in Uttar Pradesh. This will lead to an overall investment of ₹1,022 crore in the state.
• Bhatti Agritech: In 2023, Bhatti Agritech introduced a new high-yield potato variety, "Bhatti Gold," which is resistant to late blight. Field trials have shown a 25% increase in yield and a 20% reduction in losses due to disease. This development is expected to enhance the profitability of potato farmers using Bhatti Agritech seeds.

India Potato Industry Analysis

India Potato Market Growth Drivers

• Increasing Demand for Processed Foods: The demand for processed potato products like chips, fries, and frozen items has been on the rise due to urbanization and changing consumer preferences. In 2020, the consumption of potato chips alone grew up, reflecting the growing trend towards snack foods.
• Technological Advancements in Agriculture: Techniques such as drip irrigation, precision farming, and the use of genetically improved seed varieties have boosted yields. In regions like Punjab and Uttar Pradesh, the average potato yield per hectare has increased from 20 tonnes to 30 tonnes over the past decade.
• Export Opportunities: India's potato exports have increased, with major importers being Bangladesh, Nepal, and Sri Lanka. In 2021, India exported 320 thousand metric tonnes of potatoes, generating revenue of USD 498 million. The increasing quality standards and competitive pricing of Indian potatoes have made them attractive in the international market, boosting the overall market growth.

India Potato Market Challenges

• Climate Variability: Irregular monsoon rains and extreme temperatures have led to fluctuations in yield, causing supply chain disruptions. For instance, in 2020, unseasonal rains in Uttar Pradesh resulted in a decline in potato output. The increasing frequency of such climatic events poses a major challenge for consistent production and supply.
• Inadequate Storage Infrastructure: Despite improvements, the storage infrastructure for potatoes in India remains inadequate. India has a storage capacity of only 30 million tonnes against an annual production of 50 million tonnes. This gap leads to significant wastage and price volatility in the market, affecting both farmers and consumers.
• Pest and Disease Management: Common issues include late blight, which can cause crop loss if not managed effectively. In 2022, an outbreak of late blight in West Bengal affected the potato crop, leading to substantial economic losses. Effective pest and disease management requires continuous investment in research.

India Potato Market Government Initiatives

• Pradhan Mantri Krishi Sinchai Yojana: Launched in 2015, the PMKSY aims to enhance irrigation coverage and improve water use efficiency. Under this scheme, micro-irrigation systems have been installed across 61.72 lakh hectares of agricultural land, benefiting potato farmers by ensuring better water management.
• National Horticulture Mission: The NHM, initiated in 2005, promotes the cultivation of horticultural crops, including potatoes. As a result, the productivity of potato farms has increased, contributing to overall market growth.
• Kisan Credit Card (KCC) Scheme: The KCC scheme, launched in 1998, provides short-term credit to farmers for crop cultivation. In 2020, the scheme was extended to cover 25 million farmers, including potato growers, with a total credit disbursement of INR 2 lakh crores.

India Potato Market Future Outlook

The India Potato Market is expected to continue its growth trajectory, driven by increasing demand for processed potato products and advancements in agricultural practices.

Future Trends

• Rising Demand for Organic Potatoes: Organic potatoes, free from synthetic fertilizers and pesticides, have seen an increase in demand over the past five years. This trend is particularly strong in urban centers where consumers are willing to pay a premium for organic products.
• Expansion of Processed Potato Segment: Major food processing companies are investing in expanding their production capacities. For example, in 2022, a leading snack manufacturer increased its production capacity by 25%, responding to the growing demand for potato chips and fries.
• Sustainable Farming Practices: Practices such as crop rotation, use of organic fertilizers, and integrated pest management are being increasingly adopted. These practices have reduced the environmental impact of potato farming and improved soil health. In regions like Haryana, sustainable farming initiatives have led to a reduction in input costs over the past five years.