India's Union Budget 2026 places increased emphasis on plantation crops, with coconut and cashew identified as priority categories for farm diversification, income growth, and agro-processing development. Presenting the Budget, Union Finance Minister Nirmala Sitharaman said government support will focus on coconut and cashew in coastal regions, along with other region-specific tree crops.
Coconut forms a central element of the strategy. India remains the world's largest coconut producer, with close to 30 million people dependent on the crop, including around 10 million farmers. To improve productivity, the government proposed a Coconut Promotion Scheme that includes replacing old and unproductive trees with new saplings and improved varieties in major producing states.
The Budget also outlines a dedicated programme for Indian cashew aimed at strengthening domestic raw material availability and processing capacity. The objective is to reduce reliance on imports and improve the sector's export positioning over the medium term.
Industry participants link the policy measures to sourcing stability and product development. Abhijeet, founder of abcoffee, said the focus aligns with earlier investments by the company. "We were among the first coffee chains in India to launch coconut-milk-based beverages in 2024. A stronger domestic push on coconut will allow innovators like us to move faster on product development, improve ingredient consistency, and scale these formats as everyday beverage choices rather than niche offerings," he said.
Sarah Sarosh, founder of Impulse Coffees and digital content creator, said the measures address supply volatility. "This announcement directly addresses one of the biggest pain points for consumer brands today, which is volatile raw material costs and over-dependence on imports. Ingredients like coconut and cashew sit at the core of multiple high-growth D2C and FMCG categories, including beauty, personal care, food, and wellness," she said.
She added that higher domestic output can improve supply-chain predictability. "For retail and D2C founders, this is not just an agricultural push but a structural move that can unlock better margins, faster innovation cycles, and stronger Made in India positioning with consumers."
Vikas D Nahar, founder of Happilo, said the focus on cashew production could influence the domestic processing sector. "The 2026 budget focusing on the production of cashews is a significant positive development," he said.
Overall, the Budget signals a shift toward linking plantation production with domestic processing and downstream markets.
Source: ET Retail
