Indian essential oil business flourished with highest exports in bergamot and peppermint while rose and citronella oils saw a dip in exports.
While India’s overall export fell by 6.6 percent in 2020-21, essential oils’ export value grew and is at $214.47 million. In the Financial Year (FY) 2020-21, many businesses suffered due to the pandemic but essential oils business in India witnessed growth.
“During the pandemic, there was a growth in the export of pure natural essential oils, because of their medicinal properties. They are also widely used in healthcare and wellness products,” said Aditya Deo, vice president of south zone, Essential Oil Association of India and the managing director of D.V. Deo Industries.
Subhra Chaturvedi, founder and owner of Meraki Essential Oil, said that the essential oil industry across the world is gaining awareness. In India, over the last few years, wellness has become a priority and Indians are starting to understand the benefits of aromatherapy. Indian essential oils are famous and cater to half the demand, she added. Essential oils like Peppermint, Kashmiri Lavender, Lemongrass, and Citronella are exported across the world.
In the FY 2020-21, bergamot essential oil had the highest export with a growth of 322.1 percent, followed by orange essential oil (298.43 percent), cinnamon leaf oil (250.73 percent), cajeput (113.21 percent), and cinnamon bark oil (105.49 percent). However, citronella, palmarosa, and lemon essential oils witnessed negative growth.
Ministry of Commerce and Industry’s (MCI) bilateral trade statistics for the last three years shows that there is consistent growth in the export of essential oils. A year-end review press release by MCI stated that there has been a growth of 8.9 percent in export from April to November 2020.
There was a consistent growth in the export of essential oils since 2017, said Vijay P Ojha, Chair Professor at Export Credit Guarantee Corporation of India (ECGC). The total export of India’s cosmetics, perfumery, essential oils and resinoids was reported Rs. 120, 658.75 in 2018, which shows a growth of 13.9 percent compared to Rs. 105,865.60 in 2017.
India is the second largest producer and exporter of Menthol and Mint essential oil in the world and has been one of the top exporters of essential oils for decades. On the other hand, it is also one of the biggest importer of essential oils, said Deo. Earlier India was the top exporter of sandalwood oil, rose oil, and ginger oil. Due to climate change, the sandalwood forests were damaged and have not been restored yet. India started facing challenges from new players like Nigeria and China for the export of ginger oil, explained Deo. Indian rose oils’ price is increasing, and countries such as Bulgaria, Turkey, and Morocco have started exporting rose oil at cheaper rates, said Ankur Tandon from Shiva Exporters, a company that exports essential oils from India.
The annual turnover of the essential oils industry is Rs.1950 crore, and it is growing at a rate of 25–30 percent annually.