And why demand, not just capex, matters for the nuts & dry fruits sector, writes Gunjan Vijay Jain, President, Nuts and Dry Fruits Council (India)
As the Union Budget 2026 approaches, the phrase Viksit Bharat is everywhere. It is spoken with confidence and ambition, often alongside big numbers — capital expenditure, infrastructure pipelines, manufacturing targets. All of this is important. No economy grows without investment in roads, ports, factories and logistics.
But development cannot be understood only through what is built. It also has to be seen in what people consume, how accessible nutrition becomes, and whether everyday businesses are able to grow without constant disruption. This is where the nuts and dry fruits sector quietly becomes relevant to the larger story.
One policy instrument that deserves closer attention in this context is the Production Linked Incentive (PLI) framework. While PLIs have largely focused on electronics, pharmaceuticals, solar modules and other capital-intensive sectors, food processing — particularly value-added segments such as nuts and dry fruits — remains largely outside its ambit. This gap matters because domestic value addition in this sector happens after imports, through processing, packaging and distribution that generate employment and build consumer trust.
A targeted PLI for value-added food processing could encourage scale, formalisation and consistency. Linking incentives to output, quality benchmarks and packaging standards would support processors who invest in better infrastructure and technology. Such an approach would not distort trade realities or replace imports; instead, it would strengthen domestic processing capacity where most economic activity already exists.
For a sector dominated by MSMEs, a PLI-style mechanism could also improve access to finance. Predictable incentive flows linked to production volumes can improve balance sheets and reduce risk perception among lenders. In the context of Viksit Bharat, this would align manufacturing policy with nutrition outcomes and demand-led growth rather than focusing only on upstream production.
It is not a sector that asks for attention. It simply exists — across mandis, processing units, wholesale markets, kirana stores and modern retail shelves. Yet it touches agriculture, imports, MSMEs, food processing, employment and changing consumer habits all at once. If Viksit Bharat is meant to be broad-based, this is exactly the kind of sector policy must look at more closely.
Imports are a reality, but not the full story
There is no denying that India depends on imports for several nuts such as almonds, pistachios and walnuts. Geography and climate make this unavoidable. The industry has accepted this reality long ago. What often gets overlooked, however, is what happens after these products enter the country.
The real economic activity begins at that point. Cleaning, grading, sorting, roasting, flavouring, packaging and distribution are all carried out domestically. These processes create employment and determine quality. Most of this work is handled by small and mid-sized enterprises, many of them family-run, operating with limited access to capital and infrastructure.
Because of these constraints, inefficiencies creep in. Wastage is higher than it should be. Quality can vary from batch to batch. Shelf life is not always optimal. Over time, these issues affect pricing and consumer confidence. Budget 2026 has an opportunity to shift attention from import dependence to domestic value creation.
Why processing needs a push
Processing infrastructure is often spoken about in broad terms, but for this sector, it is very specific. Scientific storage, temperature control, proper grading lines and better packaging are not upgrades — they are necessities.
As consumers become more health-conscious, expectations rise. People look closely at what they eat. They care about freshness, safety and consistency. Without modern infrastructure, even well-intentioned processors struggle to meet these expectations.
Support for common processing facilities, clusters and shared infrastructure could make a meaningful difference, especially in key producing and consuming regions. This is not about subsidies for the sake of it. It is about reducing waste, improving efficiency and making the supply chain more reliable.
The credit problem no one talks about enough
Despite steady growth in demand, many businesses in this sector remain cautious about expanding. The reason is simple: credit is expensive and short-term. Food processing investments take time to yield returns, but financing is rarely aligned to that reality.
Most processors operate on thin margins. High interest rates and short repayment cycles discourage investment in storage, machinery or technology. Budget 2026 could address this gap by enabling access to affordable, longer-term credit specifically designed for food processing MSMEs. Such support would not distort markets. It would simply allow businesses to plan better and invest with confidence.
Technology is no longer optional
Quality standards are rising, not just globally but within India as well. Organised retail and FMCG brands demand traceability, testing and consistency. Moisture control, contamination checks and better packaging systems are becoming baseline requirements.
Many smaller players understand this, but adoption is slow because technology costs money. Without support for upgradation, there is a risk that demand grows faster than the sector’s ability to supply responsibly. Budgetary incentives for technology adoption could help bridge this gap.
Why demand deserves equal attention
In recent years, policy has leaned heavily towards supply-side solutions. While necessary, this approach often underplays the importance of consumption. Nuts and dry fruits are still seen as premium or festive items in many households. Outside metros, affordability remains a barrier.
Tax rationalisation for processed and packaged nut-based products could help make organised options more accessible. When prices become reasonable, consumption patterns change gradually but meaningfully. Consumers move away from loose, unbranded products, improving food safety and formalisation.
There is also a strong case for including nuts and dry fruits, in modest quantities, within institutional nutrition programmes. Midday meals, anganwadi schemes and health initiatives already aim to improve nutrition. Integrating nuts can support these goals while creating steady demand.
Strengthening the base of the supply chain
Farmer–processor linkages in this sector are often weak and fragmented. Better aggregation models, farmer-producer organisations and structured sourcing frameworks can improve income stability and price discovery. They also help processors plan better and improve traceability.
These linkages matter more as organised consumption grows.
What this means for Viksit Bharat
The nuts and dry fruits sector may not dominate headlines, but it reflects a deeper truth about India’s growth path. Capex builds capacity. Demand sustains it. Development cannot rely on infrastructure alone; it must also strengthen everyday sectors that support livelihoods and nutrition.
Viksit Bharat should be visible not just in investment figures, but in how easily households can access better food, how MSMEs grow, and how value stays within the country. Budget 2026 has a chance to recognise this balance.
For this sector, the expectation is simple: acknowledge that domestic processing, consumption growth and MSME participation are central to long-term competitiveness. That recognition would speak louder than any single announcement.
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the publication.
