India considers FDI liberalisation for plantation sector

The Indian government is considering the liberalisation of foreign direct investment (FDI) norms within the plantation sector. The Commerce and Industry Ministry is currently conducting stakeholder consultations to potentially include more commercial crops under existing FDI policies.

Specifically, officials have mentioned banana cultivation as a potential candidate for expanded investment. While 100% FDI is currently permitted through the automatic route for tea, coffee, rubber, cardamom, palm, and olive oil tree plantations, other plantation activities are presently restricted.

The move aims to bolster India’s banana export industry. Although India is the world’s largest banana producer, accounting for approximately 26.45% of global production, it currently holds only about 1% of the global export market. In 2024-25, banana exports were valued at $377.5 million, reflecting a 30% year-on-year increase. The government has set a target to increase these exports to $1 billion in the coming years, eyeing markets such as the US, Russia, Japan, China, and several nations in the Middle East.