India is weighing a policy shift to allow greater foreign investment in plantation crops, aiming to boost banana exports and turn its dominance in production into a global trading hub.
India is weighing a change to foreign-investment policy that could, for the first time, open more plantation crops to overseas capital, with bananas emerging as the clearest candidate as ministers try to turn India’s dominance in production into a much larger export business.
Reports carried by The Economic Times and a Hindi-language Bhasha version published by IBC24 said the commerce ministry is consulting stakeholders and has not yet announced a formal rule change. In the English version, an unnamed official said: “We are looking for more FDI liberalisation in the plantation sector like banana,”. The Hindi copy made the emphasis on bananas equally explicit, quoting the official as saying: “हम केले जैसे बागान क्षेत्र में FDI को और उदार बनाने की संभावनाएं तलाश रहे हैं।”
That would be a notable break with the present regime. Under India’s foreign-investment framework, 100 per cent foreign direct investment through the automatic route is permitted in tea, coffee, rubber, cardamom, palm oil tree and olive oil tree plantations, but not in other plantation activities. NewsBytes described the possible inclusion of banana plantations as a big shift from the current rules, and the logic is straightforward: India grows more bananas than any other country, yet ships only a sliver of them abroad.
The gap between output and exports is central to the government’s case. Official export-promotion material has put India’s share of world banana production at 26.45 per cent, or 35.36 million metric tonnes, while its share of global banana exports is only about 1 per cent. Banana shipments were worth USD 377.5 million in 2024-25, up roughly 30 per cent on the previous year, and the longer-term ambition is to push that figure beyond USD 1 billion. The biggest current markets include Iran, Iraq, the UAE, Oman, Uzbekistan, Saudi Arabia, Nepal, Qatar, Kuwait, Bahrain, Afghanistan and the Maldives, while officials also see scope in the US, Russia, Japan, Germany, China, the Netherlands, the UK and France.
That ambition has been building for several years. DD News reported that banana exports had risen tenfold over the past decade and reached about USD 300 million in 2023-24, up from USD 176 million in 2022-23. It also said India’s share of global banana exports had climbed from 0.21 per cent in 2013 to 1.74 per cent in 2023. Even so, the trade still relies heavily on expensive air freight, a constraint that officials believe can be eased by developing sea-shipping protocols and more robust cold-chain infrastructure.
A key moment came in November 2023, when APEDA facilitated the first trial sea shipment of fresh bananas to the Netherlands from Baramati in Maharashtra. The consignment was sent by InI Farms, with Del Monte handling marketing and distribution in Europe and Maersk providing logistics, while ICAR-Central Institute for Subtropical Horticulture in Lucknow supplied technical assistance. In that release, APEDA said banana exports worth more than USD 1 billion within five years were achievable and argued that the expansion could raise incomes for more than 25,000 farmers, create over 10,000 direct supply-chain jobs and support more than 50,000 additional on-farm livelihoods indirectly.
The push is not confined to export corridors. In March, the agriculture ministry used a visit by Shivraj Singh Chouhan to Jalgaon in Maharashtra to underline its broader banana strategy. The minister described Khandesh, especially Jalgaon, as the “Golden City” and the “Banana City”, and said a long-pending ₹200-crore Banana Cluster had been approved. According to the official release, the project is meant to add good agricultural practices, mechanisation, bio-control, fruit covering and pre-cooling, along with cold storage, ripening chambers, refrigerated vans, processing and export facilities. Chouhan also acknowledged the difficulty of supporting a perishable crop through conventional minimum support price procurement and said the government was considering compensation if market prices dropped too far below costs or a model price.
The geography of production helps explain why policymakers see room for outside capital. Andhra Pradesh remains the biggest banana-growing state, followed by Maharashtra, Karnataka, Tamil Nadu and Uttar Pradesh; together, those five states accounted for about 67 per cent of output in 2022-23. DD News also pointed to Uttar Pradesh’s One District One Product push in Kushinagar and said subsidies and incentives were improving banana quality in districts including Deoria, Gorakhpur and Ayodhya. It added that Russia was expected to become an important buyer, suggesting that the export strategy now stretches well beyond the Gulf markets that have dominated Indian banana trade for years.
For now, though, the proposal remains only a consultation-stage idea rather than settled policy. No draft amendment had been set out publicly on Sunday. If bananas are eventually added to the list of plantation activities eligible for automatic-route foreign investment, the move would sit alongside a wider state effort already under way: building export logistics, lowering transport costs, improving on-farm infrastructure and trying to give growers a larger share of the value created after the fruit leaves the farmgate.
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