India's Olive Oil Market Shows Growth Potential Despite Challenges

Summary

Tariffs have caused uncer­tainty for olive oil pro­duc­ers in the US, but the out­look for the olive oil mar­ket in India remains pos­i­tive, with sales steadily increas­ing. Spanish olive oil dom­i­nates the mar­ket in India, but high tar­iffs and tra­di­tional cook­ing prac­tices are bar­ri­ers to fur­ther growth, although a poten­tial free trade agree­ment between the EU and India could help reduce tar­iffs and encour­age higher con­sump­tion.

On-again, off-again tar­iffs have cre­ated uncer­tainty for some of the world’s largest pro­duc­ers and bot­tlers in the United States, the world’s sec­ond-largest olive oil con­sumer.

However, offi­cials and com­pa­nies remain bull­ish about the out­look for the olive oil mar­ket in India, the world’s most pop­u­lous coun­try.

According to mar­ket research from the Spanish Institute for Foreign Trade (ICEX), olive oil sales by value have steadily increased, ris­ing from €99 mil­lion in 2018 to €164 mil­lion in 2024. ICEX fur­ther projects sales to reach €198 mil­lion by 2028.

“Over the past decade, the olive oil mar­ket in India has seen con­sis­tent high sin­gle-digit growth, dri­ven by increas­ing accep­tance and use in Indian cook­ing,” Siladitya Sarangi, coun­try man­ager for India at Deoleo, the world’s largest olive oil bot­tler, which has been present on the sub­con­ti­nent for more than 60 years, told Olive Oil Times in an email. 

“This shift has been par­tic­u­larly notice­able in the con­sump­tion of lighter-fla­vored olive oil vari­ants, such as extra light, which bet­ter suit local cook­ing meth­ods,” he added. ​“Moreover, India has proven to be a learn­ing mar­ket, where Deoleo explores diverse uses of olive oil.”

Deoleo’s Figaro and Bertolli brands are two of India’s top ten olive oil brands by mar­ket share. Fellow Spanish bot­tlers Borges and Rafael Salgado are also in the top ten. Spanish olive oil dom­i­nates the mar­ket, mak­ing up 82 per­cent of imports by vol­ume in 2023. 

However, com­pa­nies face sig­nif­i­cant hur­dles in India, includ­ing house­hold pen­e­tra­tion out­side major cities and high tar­iffs. 

World Bank data show that after mete­oric growth, with import vol­umes ris­ing from 45,000 kilo­grams in 2003 to nearly 1.9 mil­lion kilo­grams in 2012, imports have remained rel­a­tively flat, exceed­ing two mil­lion kilo­grams in 2020 and falling to 1.7 mil­lion in 2023.

“The main bar­rier con­tin­ues to be the price, as olive oil is gen­er­ally more expen­sive than other edi­ble oils,” Sarangi said. 

Virgin and extra vir­gin olive oil are sub­ject to a 45 per­cent basic duty and a five per­cent inte­grated goods and ser­vice tax, a tar­iff on goods mov­ing inter­nally in India. 

ICEX esti­mated that the aver­age price of a liter of olive oil in India is about €13. Olive oil rep­re­sents four per­cent of total edi­ble oil con­sump­tion.

“The 45 per­cent basic duty does impact the price com­pet­i­tive­ness of olive oil com­pared to other edi­ble oils,” Sarangi con­firmed. 

“However, in June 2022, the European Union and India resumed dis­cus­sions on a long-awaited free trade agree­ment, which could lead to a reduc­tion in these tar­iffs,” he added. ​“This would cer­tainly have a pos­i­tive impact on the com­pet­i­tive­ness of olive oil prices, encour­ag­ing higher con­sump­tion in the coun­try.”

Along with tar­iffs, the olive oil indus­try some­times strug­gles to incor­po­rate olive oil into the coun­try’s many tra­di­tional cuisines, and there is mis­in­for­ma­tion. 

“There is a per­cep­tion that olive oil is not suit­able for Indian cook­ing, espe­cially when it comes to cook­ing at high tem­per­a­tures,” Sarangi said.

However, the com­pany noted that ris­ing inter­est in inter­na­tional food cul­ture is help­ing to fuel demand for olive oil.

“While olive oil is not tra­di­tion­ally part of Indian cui­sine, we are wit­ness­ing sig­nif­i­cant growth in its inter­est and usage,” Sarangi said. 

“This is not only because Indian con­sumers are embrac­ing inter­na­tional cuisines but also because they are start­ing to incor­po­rate olive oil into local dishes, seek­ing health­ier options with­out alter­ing the authen­tic taste of their food,” he added. 

Walter Zanre, the man­ag­ing direc­tor of Filippo Berio UK, agreed that olive oil is more com­pat­i­ble with Indian cuisines than with other food cul­tures in Southeast and East Asia.

“ I see more oppor­tu­nity in India [than in China] because cul­tur­ally there’s more under­stand­ing of the use of olive oil in cook­ing. They’re that much closer to the West in that respect,” he said.

While Filippo Berio is not widely sold in India, Zanre said the brand is rec­og­niz­able in some cities due to India’s large dias­pora pop­u­la­tion in the United Kingdom.

The ICEX report cited the emer­gence of a mid­dle class in India with dis­pos­able income and grow­ing con­scious­ness around healthy eat­ing as rea­sons for opti­mism.

“Demand is fueled by the upper class and the work­ing, urban­ized mid­dle classes, who are increas­ingly con­cerned about a healthy diet and are begin­ning to intro­duce olive oil into their diets,” the insti­tute wrote.

Indeed, Deoleo con­firmed that much of its growth in India has been cen­tred on Mumbai and Delhi, with increas­ing sales in smaller cities as well. 

“While major cities remain the pri­mary dri­vers of the olive oil mar­ket in India, we have seen sig­nif­i­cantly higher growth in other sec­ondary cities, due to the eco­nomic expan­sion the coun­try is expe­ri­enc­ing,” Sarangi said. 

“This trend reflects a geo­graphic diver­si­fi­ca­tion in con­sump­tion as improve­ments in infra­struc­ture and grow­ing pur­chas­ing power in these areas fos­ter a higher demand for prod­ucts like olive oil,” he added.

To suc­ceed in India, the ICEX report said Spanish olive oil importers must develop local logis­tics infra­struc­ture and focus on expand­ing dis­tri­b­u­tion away from super­mar­kets and large retail­ers to retail stores and kirana.

ICEX also iden­ti­fied online sales and the hos­pi­tal­ity and restau­rant sec­tor, respon­si­ble for 40 per­cent of edi­ble oil pur­chases in India, as sig­nif­i­cant sources of oppor­tu­nity.

Deoleo, for its part, said the com­pany cur­rently man­ages man­u­fac­tur­ing, dis­tri­b­u­tion and mar­ket­ing activ­i­ties through its sub­sidiary in India. 

“In 2018, the com­pany cen­tral­ized its oper­a­tions in the coun­try to cap­i­tal­ize on the grow­ing olive oil con­sump­tion, which is con­sid­ered a pri­or­ity mar­ket for the group,” Sarangi said.

“India has become a key mar­ket for explor­ing new con­sump­tion oppor­tu­ni­ties,” he con­cluded. ​“We now pos­sess a total of four ware­houses at strate­gic points in the coun­try: Mumbai, Kolkata, Delhi and Bangalore.”