Indian Cashew Industry Exports Reduced

Indian cashew industry has long been a leader in cashew production. But in recent years, its exports have dropped sharply. A decade ago, India accounted for 43% of global cashew exports; today, it stands at only 8%. This dramatic decline has hurt the industry, leaving Vietnam to claim the top spot in the international market.

Vietnam's rise is no accident. Over the past 20 years, the country has focused on building a highly efficient cashew industry, powered by automation, cost-effective operations, and aggressive export strategies. To regain its footing, India must adopt some of Vietnam's best practices, particularly in states like Maharashtra, the largest cashew producer in the country.

Learning from Vietnam's Success

1. Automation Drives Efficiency

Vietnam’s large-scale processing units, equipped with advanced automation, handle over 200 tonnes per day, far exceeding Maharashtra’s top plants, which process just 20 tonnes daily. This automation minimizes labor costs, requiring only 40 workers for a 20-tonne unit in Vietnam, compared to 300 workers in India.

2. Access to Cutting-Edge Machinery

Vietnam not only uses high-quality machinery but also manufactures it, making advanced equipment widely accessible. India, on the other hand, relies on importing cashew processing machines from Vietnam, increasing operational costs.

3. Lower Freight and Financing Costs

Vietnam benefits from lower freight charges to major markets like the U.S., giving it a pricing edge. Additionally, term loans for Vietnamese cashew manufacturers carry interest rates of 4–5%, compared to 9–10% in India.

4. Value-Added Products

Vietnam is focusing on high-margin cashew products like cashew butter and spreads. Collaborative ventures with the U.S. have helped it scale its value-added offerings. India, however, remains focused on traditional graded cashews, which are costlier and face pricing challenges internationally.

Steps to Strengthen India’s Cashew Industry

1. Expand Plantations

Increasing plantation areas with modern farming techniques can boost domestic production and reduce dependence on raw cashew nut imports.

2. Introduce Automation

Promoting large-scale processing units and automated technologies can help Indian processors achieve economies of scale and improve efficiency.

3. Make Financing Accessible

Introducing affordable, long-term loans with simplified processes can help cashew processors modernize and scale operations.

4. Target Middle Eastern Markets

With proximity and high demand, Middle Eastern markets are a natural fit for Indian cashew exports. Strengthening trade relationships here can reduce logistics costs and increase profitability.

5. Promote Indian Cashews Globally

India should position its cashews as premium-quality products, emphasizing their superior taste and nutritional value. Establishing a strong global brand can differentiate Indian cashews from competitors.

6. Support Through Tax Incentives

Offering tax benefits and subsidies to cashew processors can reduce operational burdens and encourage growth in the sector.

7. Leverage APEDA’s Machinery Subsidy

The 40% machinery subsidy under APEDA for cashew processors is a step in the right direction. This support must be widely promoted to help manufacturers invest in modern technologies.

A Mixed Outlook for Vietnam and Opportunities for India

While Vietnam excels in exports, its heavy reliance on international markets is a vulnerability. With just 5% of its production consumed domestically, the country faces challenges such as raw material shortages and increasing competition from African nations, which are now processing their own cashews.

India, by contrast, enjoys strong domestic demand and a vast raw material base. With its proximity to Middle Eastern markets and a growing consumer base, India has a unique advantage that can be leveraged for long-term growth. Maharashtra, as the country’s largest cashew producer, plays a crucial role. The establishment of a state-level Cashew Board is a strategic move that can help drive modernization and market expansion.

Conclusion

India’s cashew industry stands at a critical juncture. By learning from Vietnam’s success and implementing modern practices, India can reclaim its position as a global cashew leader. With strong domestic demand, strategic investments, and support for value-added products, the future of Indian cashews looks promising.





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