Rising Imports and Costly Supply Chains Squeeze India’s Apple Economy

India’s apple economy, long a lifeline for Himalayan farmers, is facing growing stress from surging imports and deep inefficiencies in the domestic supply chain.

India produces about 2.5 million metric tonnes of apples annually, making it one of the world’s major producers. Production is concentrated in the north: Jammu & Kashmir accounts for about 70–75%, Himachal Pradesh about 20%, while Uttarakhand contributes around 2%, with smaller quantities from Arunachal Pradesh and Nagaland. Nearly 5 million people in Jammu & Kashmir and about 500,000 families in Himachal Pradesh depend on the apple economy for their livelihoods.

Despite strong domestic output, India imported about 558,000 tonnes of apples in 2024-25, equivalent to roughly 22% of domestic production. Import dependence has grown steadily. In value terms, apple imports have increased more than fortyfold over two decades—from $9.9 million in 2004 to $417.6 million in 2024.

India imposes a 50% import duty on apples and permits imports only when the declared value exceeds ₹50 per kg. After adding the tariff, landed costs based on 2024-25 prices are about ₹77 per kg for Iranian apples, ₹99 per kg for Turkish apples, ₹120 per kg for South African apples, ₹125 per kg for US apples, and roughly ₹129–131 per kg for New Zealand and Afghan apples. Even with high tariff protection, imports continue to grow.

Tariff concessions linked to trade agreements could accelerate this trend. Reports indicate India, in its trade deal with the US, has agreed to reduce tariffs from 50% to 25% for a limited quantity of US apples while raising the minimum import price to ₹80 per kg.

The higher MIP is unlikely to restrain imports because US apples already enter at prices above that level. The tariff cut, however, lowers landed costs significantly—from about ₹125 per kg to ₹103.7 per kg. With a 30% retail markup, US apples could reach major city malls at about ₹135 per kg, and with a 40% markup they could be sold in tier-two cities at roughly ₹145 per kg. Similar concessions to other FTA partners would further expand imports, allowing them to penetrate mid-premium segments that domestic growers rely on for better returns.

Imports are also gaining share partly because of structural advantages in logistics and distribution. India’s domestic farm-to-retail supply chain remains highly inefficient, producing a stark price gap between what farmers receive and what consumers pay. Farmers typically receive ₹30–₹60 per kg, sometimes less in distress years. Wholesale prices range from ₹60–₹120 per kg, while retail prices commonly reach ₹120–₹220 per kg.

This roughly fourfold increase reflects multiple structural costs and bottlenecks. Domestic apples from Kashmir and Himachal Pradesh must travel long distances over fragile mountain roads, often facing weather disruptions and delays. Along the way, costs accumulate through grading and packaging, commission agent fees, mandi charges, transport from hill regions, cold storage expenses and wastage losses that can reach 30–40%. Trader margins, retailer overheads, seasonal gluts, weak cold-chain infrastructure and multiple intermediaries further depress farm-gate prices while pushing up retail prices.

Imported apples can move from port to market with only 30–40% logistics and distribution cost, while domestic apples can experience cost escalations exceeding 400% from orchard to retail. Even when Indian apples are cheaper at the farm gate, they are less competitive on store shelves. This structural inefficiency erodes farmer income while keeping consumer prices high.

Off-season availability further strengthens imports. Apples from the United States, New Zealand, South Africa and Chile can supply markets when domestic stocks decline and no adequate storage. If tariffs fall further, imported apples are likely to dominate retail shelves during off-season months, and eroding traditional seasonal price advantages.

The risk of pests such as fruit flies and other quarantine organisms is a critical issue in apple trade. India imposes strict plant-health requirements on imports to prevent the entry of pests that can damage orchards and ecosystems. Apple consignments may be rejected or require treatment if they show signs of fruit flies, codling moth or fungal infections. India must ensure its Sanitary and Phythosanitary regime remains fully applicable to imports. The US may press India to waive domestic inspections once consignments are cleared under US rules; similar provisions have been accepted by Malaysia. Any weakening of quarantine standards could threaten domestic orchards.

Western economies have long pressured India to lower its tariffs. During the GATT Article XXVIII tariff renegotiations in 1999–2000, India reduced the bound tariff rate on apples from 55% to 50%. Article XXVIII allows WTO members to renegotiate previously bound tariff commitments.

Other Challenges
India’s apple growers also face pressures from climate shocks, weak infrastructure, volatile prices and low productivity. Erratic snowfall, heavy rains and disease outbreaks have reduced yields and fruit quality, while damaged hill roads and poor cold-chain systems cause 30–40% post-harvest losses. Farmers often receive far less due to market gluts and price crashes, even as logistics failures prevent efficient distribution. Productivity remains low—about 7–8 tonnes per hectare in Himachal Pradesh compared with 40–70 tonnes in leading producing countries. Rising imports are filling supply gaps and premium demand, and growers fear tariff cuts will intensify pressure unless storage, transport and support systems improve.

Recommended Actions

• Keep import safeguards in place so FTA concessions do not displace domestic growers.
• Maintain strong SPS and quarantine checks to protect orchards from pests and diseases.
• Improve the supply chain by expanding cold storage, refrigerated transport, pack-houses and grading facilities in producing regions.
• Cut middlemen costs by promoting farmer producer organizations, direct retail linkages and digital marketplaces.
• Upgrade rural roads and logistics in hill states to reduce spoilage and delays.
• Raise productivity through high-density planting, better varieties, mechanization support, extension services, crop insurance and quality inputs.
• Provide targeted financial support and climate-resilient orchard programs to help growers move up the value chain.
• Without these reforms, tariff protection alone will not stop imports from steadily eroding farmers’ incomes and market share.

Way Forward
India’s apple economy is at a crossroads. Imports—now equal to roughly one-fifth of domestic production—will likely expand further. Low-cost imports from Iran and Turkey pressure lower grades, while tariff-reduced imports from FTA partners could compete in mid-premium segments. Year-round imported fruit may increasingly replace domestic apples in off-season markets.

Yet the deeper structural challenge lies within India’s own supply chain. Without reforms, rising imports will continue to erode the market share and earnings of Himalayan apple growers, even as consumers pay high prices for fruit that travels thousands of miles to reach their plates.

 

Table 2-India’s Apple Imports Grown 40 times Over the Last 20 Years -US$ million)
Year	Value	Year	Value
2004	9.9	2014	234.4
2005	21.2	2015	209.9
2006	23.5	2016	237.8
2007	53.0	2017	307.7
2008	64.3	2018	298.3
2009	83.0	2019	244.0
2010	121.3	2020	201.3
2011	185.6	2021	377.4
2012	196.1	2022	314.3
2013	211.5	2023	363.1
		2024	417.6