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Why tomato paste exports from India are on the rise?


Why is tomato paste in high demand? 

  • China is the world’s leading producer of tomato paste. The tomato crop failure in China in 2022 is currently boosting the demand for the tomato paste market in India. The crop failure in China led to a massive need for tomato paste in the global market, which benefited the Indian tomato paste manufacturers
  • China loses its price advantage in the international markets as the cost of tomato plantations rises. Tomato producers in China deal with the increasing cost of energy, seeds, and labour, which raises the price of tomatoes and the cost of tomato paste. 
  • California, one of the largest tomato-growing regions in the world, is facing water scarcity, which has prevailed over the past five years and is continuing. 
  • California has diversified its plantation to other crops to manage water scarcity and avoid a repeat of 2022 tomato crop failure.

As per the reports from Tridge, Spain (the 8th largest producer of tomatoes) is witnessing a continuous fall in tomato production due to water shortage, high input costs, and unfavourable weather conditions.


Top 5 tomato producing countries
Top 5 tomato producing countries

How competitive is India in quality and pricing? – For exporting tomato paste exports from India

  • As the tomato prices in India have stabilized, Indian tomato processors can now meet the growing global demand for tomato paste. India has ample raw tomatoes, competitive labour costs, and a growing processing capacity.
  • However, the majority of Indian tomatoes are used for domestic consumption as the demand for domestic needs is expected to increase 10% year on year.
  • Indian tomato processors implement modern technologies and quality control measures to compete with global players. Implementing high-quality standards boosts tomato paste exports from India. 
  • Tomato paste processors can access a wide range of tomato varieties, including varieties suited only for processing. This helps in improving the brix, colour value, and texture.

Tomato processing Industry in India

China is the largest producer of tomatoes. As per FAOSTAT’s data, India is the world’s second-largest producer of tomatoes, with a whopping production of 20.6M tons per annum. India is capable of addressing this demand with its tomato processing industry. As per the reports, India processes only 1% of tomato production, but the demand increases by 30% yearly. 

Despite the lower processing rates, the total value of tomato paste exports from India in 2019-20 stood at 187,000 US dollars, a significant increase of nearly 160% from the previous year, according to tomato news. The main export markets for Indian tomato paste are Europe, the United States and recently, even South America.

To increase tomato paste export from India and to encourage new tomato processors in India, the Indian Government launched the Pradhan Mantri Kisan Sampada Yojana (PMKSY) scheme. Under various sub-schemes of PMKSY, a total fund of ₹4,099.76 crore has been allocated from 2017-18 to 2022-23. Tomato processors use these schemes to set up new plants and expand their capacities to meet domestic and international demands.

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