Overview of the Coffee industry in India

Undoubtedly, coffee is the second foremost preferred beverage in India after tea. The country is famous for producing about 3.5% of coffee production worldwide. Preferable topography and climatic circumstances help grow coffee beans mainly in the Southern and North-Eastern parts of India. However, the high demand from uncountable coffee lovers is worldwide. Hence, the future of the coffee industry in India is bright.

Generally, the country produces two types of coffee: Robusta and Arabica. Out of these two, the latter has a high market value than the former. This is because of its mild aromatic flavour. Robusta coffee is primarily used in making several blends because of its strong flavour. Besides these two, lately, India's speciality coffee has got much love and become a popular product. The new addition to the coffee industry is alluring coffee enthusiasts globally. An exact origin, careful cultivation practices, a routine of special processing and plucking, handling, branding and appearance identify speciality coffee.

Significance of the Indian coffee

We Indians need freshly fermented coffee to feel lively and ultimately refresh ourselves. No wonder Indian coffee is gaining attention worldwide because of its exotic taste and refreshing aroma. India ranks among the top 10 coffee-producing nations. The country boasts of 3% of the global output in 2020. Because of the high quality and high premium in the international markets, Indian coffee is one of the best worldwide. The coffee industry in India offers direct employment to more than 2 million people.

Export Promotion Scheme - Offering an export incentive

To encourage the coffee industry in India, the government started an Export Promotion Scheme. The scheme seeks to maximise export earnings by increasing the market share of high-value differentiated coffees and value-added coffees in important high-value international markets. The government offers an export incentive of Rs. 2/- per kg. to export high-value green coffee to high-value markets like Canada, the USA, Japan, New Zealand, Australia, Finland, South Korea and Norway. Additionally, there is an incentive of Rs. 3/- per kg. for the export of value-added coffee in retail consumer packs exported as "India Brand". This is evaluated on the green coffee used for the preparation at the maximum rate of 2.6 kg for soluble/instant coffee and 1.19 kg for R & G Coffee and roasted coffee seeds.

Licenses required to start a coffee industry in India

The following licenses and documents are needed to start a coffee business in India

Company Registration 

Coffee shops can be registered in India under a sole proprietorship or an LLP. So, to start the coffee industry in India, one must obtain Company Registration.

Trademark Registration

All entrepreneurs seeking to enter the coffee business must obtain a trademark registration to increase awareness among people about the brand.

GST Registration

All the owners having their turnover above the set limit must get the GST registration and the GST number.

FSSAI Registration

All food business operators, including coffee industry owners, must get the FSSAI Registration. This license assures that products are high in qualitative areas and according to the standards of the FSSAI Act.

Health Trade License

The Health Trade License is issued by the Health Department or Municipal Corporation of the concerned state. This is granted to ensure the health and safety of the consumers availing various goods and services.

Fire NOC

Owners should understand the responsibility of protecting their products and consumers from accidents and hazardous activities such as fire. Arrangements related to fire security must be made at the industry/business or the shop. Thus, the Fire Department offers a NOC for the same. Once the premises gets inspected, Fire NOC is granted to the coffee shop owners.

License for Eating House

An applicant must apply for an Eating House License to the headquarters of city/state police along with the Police Commissioner.

Shop and Establishment License

An applicant interested in starting a coffee industry in India must apply for a Shop and Establishment License. This license can be obtained from the Labour Department of the respective state government.

Registration Certificate to export coffee from India

The individual who wants to conduct business in another country can obtain a Coffee Board License. All exporters must apply for a Coffee Board Registration Certificate and an export permit of origin.

The complete process that is followed in the coffee industry

Before starting the coffee industry in India, it is good to know about the process.

Plantation

The process starts with coffee seeds planted in large beds in shaded nurseries. The seedlings are planted after being will be watered frequently and getting sufficient sunlight.

Harvesting

The coffee cherry, obtained from the plants, is considered ripe and ready to be harvested once it turns bright and deep red. In most nations, the crop is carefully handpicked, involving a complex and labour-intensive process. There are basically two ways to harvest coffee: strip picked and selectively picked.

Processing

Once cherries are harvested successfully, the next step, i.e., processing, must start as quickly as possible. This is done to prevent fruit spoilage. The processing happens in the coffee industry through one of two methods: the wet method and the dry method.

Drying

If the wet method is followed to process the beans, the beans must be appropriately dried to shed around 11% moisture for appropriate storage. Dried beans are popular as parchment coffee. These are then warehoused in sisal or jute bags until they are ready for export.

Milling

The parchment coffee is processed in the coffee industry in the following manner before being exported:

• Hulling machinery eliminates the parchment layer from wet-processed coffee beans. Hulling dry processed coffee means removing the dried husk from the dried cherries.
• Polishing is an optional process. In this step, the machine peeled off any skin on the beans after hulling. While polished beans are regarded as superior to unpolished ones, in reality, there lies a bit of difference between the two.
• SortingandGrading is done by weight and size. Furthermore, the beans are also checked for imperfections and colour flaws. Ultimately, imperfect beans are extracted either by hand or by machinery.

Exporting

The milled beans now become green coffee and are loaded onto ships for export.

Tasting

Coffee is repetitively tested for taste and quality. The process is known as cupping and is carried out by an expert known as a cupper. Furthermore, the process usually takes place in a room designed specially to facilitate the process.

Roasting

This process transforms green coffee into aromatic brown beans available in cafés or retail outlets. Many roasting machines in the coffee industry maintain a temperature of around 550 degrees Fahrenheit. The beans keep on moving throughout the entire process to prevent them from burning. After roasting, the beans are immediately cooled by water or air. Notably, roasting is usually performed in the importing nations because freshly roasted beans must reach the consumer as soon as possible.

Grinding

A proper grind aims to get the most flavour in a cup of coffee. How fine or coarse the coffee is ground relies on the brewing method. The duration during which the grounds will be in contact with water governs the superior grade of grind. As a rule of thumb, the finer the grind, the quicker the coffee must get ready.

Brewing

Brewed coffee is prepared by adding hot water onto ground coffee beans and then allowing them to brew. There are countless ways to do this, including using a percolator,a filter and a French press.

Coffee production in India

A majority of the Indian coffee grows in the three southern states, namely Tamil Nadu (contributing around 15%), Karnataka and Kerala (around 20%), followed by Telangana and Andhra Pradesh (in no particular order). Statistics reveal that there are210,000+ coffee producers in India. A majority of them are smallholder growers with plots around two hectares.

The Coffee Act of 1942

The Coffee Act of 1942 was introduced during World War II. The Act aimed to protect the struggling coffee industry of India from the economic recession resulting from the war. But now the Indian government is anticipating changing the 80-year-old Coffee Act with the new Coffee (Promotion & Development Bill), 2022.The new legislation suggests removing all those old provisions that seem irrelevant in today’s context.

In addition, the Bill intends to introduce new functions/objectives/powers of the Board to act as a facilitator. In this way, it can optimise the coffee industry's promotion, development and research. Furthermore, it can help improve the export, production, and quality of Indian coffee.

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