Makhana’s Rise in India’s Food Processing Strategy: Opportunities & Challenges
Makhana’s Rise in India’s Food Processing Strategy: Opportunities & Challenges
Makhana, also known as fox nut or lotus seed, has become a significant part of India's food processing industry. This article explores the rapid growth in makhana exports, the factors driving its demand, emerging business opportunities, supply chain dynamics, challenges, and the future outlook for this superfood.
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Rapid Growth in Makhana Exports
India stands as the largest producer of makhana, contributing approximately 70-80% of the global yield. In the fiscal year 2023-2024, the country exported 25,130 million metric tons of makhana, accounting for 90% of global exports. This impressive growth reflects India's dominant position in the makhana market.
Rising Global Demand
Several factors contribute to the increasing global demand for makhana:
Nutritional Benefits: Makhana is high in protein, low in fat, and rich in antioxidants, making it a healthy snack choice.
Health-Conscious Consumers: As more people seek healthier alternatives to chips and fried snacks, makhana has gained popularity.
Indian Superfoods Trend: The growing adoption of Indian superfoods by Non-Resident Indians (NRIs) and international markets has boosted makhana's appeal.
Top Importing Countries: The United States, United Kingdom, Canada, Australia, and the United Arab Emirates are among the leading importers of makhana.
Factors Driving Export Potential
Several elements enhance India's makhana export potential:
Rising Health Awareness: A global shift towards nutritious snacks has increased demand for makhana.
New Market Expansion: Interest from regions like Africa, South America, and Russia is opening new markets for makhana.
Technology Advancements: Improved processing and packaging technologies have made makhana more appealing to international consumers.
Government Support: Initiatives such as subsidies, infrastructure development, and export facilitation have bolstered the makhana industry.
Emerging Business Opportunities
The makhana industry presents several promising business opportunities:
Value Addition: Developing products like flavored makhana, makhana bars, and makhana flour can cater to diverse consumer preferences.
E-Commerce Growth: The rise of online retail platforms has made it easier to reach a broader customer base.
Branding & Private Labeling: Establishing exclusive makhana export brands can enhance market presence and consumer loyalty.
Makhana Supply Chain & Marketing
Understanding the makhana supply chain is crucial for addressing its challenges:
Supply Chain Stages: The journey from cultivation to the consumer involves multiple intermediaries, including farmers, processors, commission agents, wholesalers, retailers, and consumers.
Marketing Channels:
Channel 1: Farmers → Processors → Local wholesalers → Distant wholesalers → Distant retailers → Consumers (70% of makhana follows this route).
Channel 2: Farmers → Processors → Local wholesalers → Local retailers → Consumers.
Channel 3: Farmers → Processors → Local retailers → Consumers.
A major market player, Shakti Sudha Industry in Patna, purchases 20-25% of popped makhana annually.
Challenges in the Supply Chain
The makhana supply chain faces several challenges:
Lengthy Distribution: Multiple intermediaries reduce farmers' profits.
High-Interest Credit: Local money lenders often provide credit at high-interest rates (3-5%), leading to farmer exploitation.
Solutions to Improve the Supply Chain
To enhance the makhana supply chain:
Direct Marketing: Reducing intermediaries can increase farmers' profits.
Formation of Farmer Producer Companies (FPCs): Organizing farmers into FPCs can streamline operations and improve bargaining power.
Electronic Marketing Platforms: Utilizing platforms like e-NAM and online sales can provide wider market access.
Government Initiatives: Streamlining the supply chain and improving farmers' socio-economic conditions are essential for sustainable growth.
Requirements for Exporting Makhana from India
Exporting makhana involves several key steps:
Registration and Licensing:
Import Export Code (IEC): Obtain an IEC number for export eligibility.
Business Registration: Legally register the business for export operations.
Export License: Apply for necessary export permits.
Quality and Food Safety Certifications:
FSSAI Certification: Ensure compliance with Indian food safety regulations.
HACCP Certification: Implement hazard analysis and critical control points for food safety.
Organic Certification: Required for exporting organic products.
Compliance and Standards: Adhere to government and international export regulations to maintain quality.
Packaging and Labeling: Use proper packaging to protect the product and follow labeling regulations for compliance and market appeal.
Customs and Documentation: Complete customs clearance and provide all necessary shipping documents.
Other Important Factors:
Market Research: Study target market preferences and regulations.
Quality Control: Maintain strict quality checks during procurement and processing.
Government Focus on Makhana in Budget 2025-26
The Union Budget 2025-26 has placed a strong emphasis on food processing and agricultural investment. A key highlight is makhana (fox nut) cultivation.
However, the intersection of economics and politics in policymaking often affects how well such initiatives translate into real benefits.
This article explores the growing attention on makhana, its health benefits, and the challenges that hinder its full potential in production and exports.
Bihar: The Heart of India’s Makhana Production
Bihar’s reputation as the heart of India’s makhana production is set to soar with the announcement of the Makhana Board.
This initiative promises to revolutionize the state’s economy and strengthen its global market presence. As part of the Union Budget, Finance Minister Nirmala Sitharaman revealed the creation of the board.
The board aims to support the production, marketing, and export of makhana—an aquatic superfood gaining immense popularity worldwide for its health benefits.
Bihar dominates India’s makhana production, accounting for 90% of the total output. Despite the rising global demand, Bihar has yet to fully capitalize on its economic potential.
The Makhana Board will focus on improving production, processing, value addition, and marketing to address these challenges.
India currently ranks seventh in global food exports and plans to increase value-added food exports by 40% within the next 3-4 years. Additionally, the organic food market is projected to grow fourfold in the next five years.
Strengthening Bihar’s Agricultural and Food Processing Sectors
In a significant move to boost Bihar’s agricultural and food processing sectors, Finance Minister Nirmala Sitharaman announced the establishment of a dedicated Makhana Board while presenting the Union Budget.
The initiative aims to enhance the production, processing, value addition, and marketing of makhana while supporting farmers with training and access to government schemes.
The government has allocated Rs. 100 crore for the board, which will focus on improving farming techniques, making farmers export-ready, and promoting investment in food processing.
Bihar, which contributes nearly 90% of India’s makhana production, faces major challenges due to inadequate food processing infrastructure and export facilities.
The absence of a cargo terminal at any of the state’s airports further hinders direct exports.
Makhana cultivation is primarily concentrated in nine districts—Darbhanga, Madhubani, Purnea, Katihar, Saharsa, Supaul, Araria, Kishanganj, and Sitamarhi.
Traditional farming methods are labor-intensive and yield lower output. However, the introduction of high-yield varieties like Swarna Vaidehi and Sabour Makhana-1 has shown potential for increased production.
The Makhana Board will facilitate the adoption of these advanced varieties and provide necessary support to farmers.
Additionally, the Centre has proposed new tariff lines for makhana and rice under the Customs Tariff Act, 1975, effective from May 1. These classifications are expected to streamline trade and benefit the sector.
As part of the broader Purvodaya initiative, the government has also announced the establishment of a National Institute of Food Technology, Entrepreneurship, and Management in Bihar.
This institution will advance food processing activities across the Eastern region, fostering skill development, entrepreneurship, and employment opportunities.
The Makhana Board: Key Strategies and Initiatives
The Makhana Board, established in Bihar with a budget of INR 1 billion, aims to address challenges in makhana production and exports through several key strategies:
Improved Production and Productivity: The board will promote high-yield seed varieties and modern farming techniques to increase crop productivity. Traditional methods currently limit yields to 1.7–1.9 tonnes per hectare, while improved seeds can achieve 3–3.5 tonnes per hectare.
Food Processing and Value Addition: The board will develop local food processing facilities to add value to raw makhana, reducing dependency on intermediaries and increasing farmers' profits.
Training and Market Support: Farmers will receive training in export readiness, government schemes, and market strategies. The board aims to create an organized market structure that ensures fair prices.
Other Initiatives: The board will support value-added product development and export promotion while regulating makhana prices and improving export efficiency.
Challenges in Makhana Export
Indian exporters of makhana face several challenges, including low productivity, lack of processing infrastructure, export barriers, market inefficiencies, limited farmer awareness, seasonal availability, price fluctuations, and quality control.
Specific Challenges:
Low Productivity: Traditional farming methods limit yields compared to modern techniques.
Lack of Processing Infrastructure: The absence of processing units forces farmers to sell raw makhana at lower prices to companies outside Bihar.
Export Barriers: Strict global quality standards limit exports, as many farmers struggle to afford compliance with food safety certifications.
Market Inefficiencies: Farmers receive lower prices due to intermediaries. A structured supply chain would ensure fair pricing and expand market reach.
Limited Farmer Awareness: Many farmers are unaware of government schemes, financial incentives, and modern agricultural techniques.
Seasonal Availability: Maintaining a steady supply throughout the year requires better storage and strategic planning.
Price Fluctuations: Market demand and weather conditions impact profitability and export competitiveness.
Quality Control: High-quality standards and certifications are necessary for credibility in international markets. Regular quality checks are essential at every production stage.
Competition: India faces competition from makhana-exporting nations like China and Japan, requiring Indian exporters to emphasize quality and uniqueness.
Trade Policies and Tariffs: Navigating different countries' trade policies and tariffs is crucial. Understanding global trade regulations and establishing partnerships with local distributors can improve market access.
Conclusion
The government’s measures aim to ensure sustainable growth in makhana production while empowering farmers, improving market access, and boosting Bihar’s agricultural economy.
The Makhana Board has the potential to position Bihar as a global hub for makhana production and exports. If executed efficiently, it could improve the livelihoods of thousands of farmers while strengthening India’s superfood market presence.
However, the success of this initiative depends on more than political promises. Effective implementation, transparency, and farmer participation are critical to ensuring real progress.
If executed correctly, Bihar’s makhana industry could see significant growth. Otherwise, the initiative risks becoming another unfulfilled policy promise, leaving farmers struggling with long-standing challenges.
