How internal and external drivers are propelling India’s soya market

Soyabean’s emergence as a significant oilseed crop and a key source of protein has positioned India as a major global player in terms of cultivation area and production. A study by Dr KH Singh, Director, ICAR-National Soyabean Research Institute, Indore, MP and Neha Pandey, Scientist, Food Technology Co-PI, ABI Incharge, Soy Processing and Product Development Unit, detail the market’s complex structure, which is driven by increasing domestic demand, particularly for soymeal in the livestock industry, and a growing consumer awareness of its nutritional benefits. The article also identifies key challenges, including a significant yield gap, technological lags, climatic vulnerabilities, and market volatility, which hinder farmer profitability. 

Often referred to as the ‘golden bean,’ soyabean has become a key player in India’s agricultural sector, serving as a major oilseed and a valuable source of high-quality protein. While its commercial exploitation in India is relatively recent, starting about four decades ago, the crop has shown an unparalleled growth in both area and production, establishing itself as a primary rainy-season crop in the rainfed agro-ecosystems of central and peninsular India. The Indian soyabean market is a complex and dynamic sector, driven by increasing domestic demand, export opportunities, and continuous research efforts to overcome persistent challenges.

Soya market in India

The Indian soya market is a substantial and growing component of the country’s economy. The total market size of the soyabean processing industry in India is estimated to be worth around $10 billion and is growing at an annual rate of approximately 7 per cent. Globally, India holds the fourth-largest area under soyabean cultivation, accounting for 9.41 per cent of the world’s total area. It ranks fifth in production with 11.22 million tonnes in 2019-20. This is a notable achievement, though it’s important to recognise the dominance of global leaders like Brazil and the United States of America, who account for 34 per cent and 32 per cent of world production, respectively. Despite its large cultivation area, India’s yield per hectare is significantly lower than that of global leaders, a topic we will explore in detail later.

Within India, soyabean crops have become the top oilseed crop and the second-largest agricultural commodity after cereals. The cultivation is heavily concentrated in a few key states. Madhya Pradesh is the undisputed leader, often called the “soyabean bowl of India,” accounting for a significant portion of the country’s production and area (Fig. 1). In 2010, Madhya Pradesh contributed 59 per cent of the total area and production in the country. The introduction of soyabean has been particularly beneficial for farmers in these rainfed regions, as it has led to an increase in cropping intensity and a boost in profitability per unit of land.

Source: FAOSTAT 2025

Fig. 1: India’s present soyabean area, production and yield

According to estimates for 2023-24, Madhya Pradesh soyabean production led with 45.97 lakh tonnes, followed closely by Maharashtra with 45.74 lakh tonnes and Rajasthan with 10.69 lakh tonnes. The processing sector, which transforms raw soyabeans into various products, is characterised by a large number of small and medium-sized companies, with a few large multinational corporations also dominating the market. The total volume of soyabean processing in the last fiscal year (2020-21) was approximately 19.8 million tonnes.

Animal protein alternative

Nutritional profile: Soyabeans’ nutritional profile makes them an excellent alternative to animal-based protein sources, especially in a country with a large vegetarian population like India. It is widely recognised as a “complete protein” because its amino acid composition is comparable to that of animal protein. The soyabean seed is incredibly nutrient-dense, containing approximately 45 per cent protein and 18 per cent oil. This high nutritional value has earned it titles like the ‘Cow of the field’ or ‘Gold from soil.’

Beyond its protein content, soy is packed with nutraceutical compounds like isoflavones, tocopherol, and lecithin, which offer significant health benefits. Soy milk is described as a high-protein, low-fat, and cholesterol-free food that is particularly beneficial for babies, children, and pregnant women. It’s also an excellent option for people with diabetes and lactose intolerance. Research has shown that soya protein can improve cardiovascular risk factors, help prevent certain types of cancer, and improve bone mineral density.

Challenges in direct consumption

However, the direct use of soyabean for food in India has faced some challenges due to the presence of a characteristic beany flavor (caused by lipoxygenases-Lox1, Lox2, and Lox3) and anti-nutritional factors like trypsin inhibitors (especially, Kunitz trypsin inhibitor (KTI)). This has limited its full integration into the human food chain, and while researchers are working on breeding new varieties to address these issues (discussed later in article), a large portion of the crop is still processed into oil and meal for other applications. As for soya oil, it is one of the most commonly used and important edible oils in India, used for cooking and industrial purposes. In fact, 100 per cent of the domestically produced soyabean oil is consumed within the country. 

India’s Soya Processing Sector: 

India’s soy processing sector is poised for significant expansion, fueled by strong opportunities despite various operational hurdles. Strategic growth can be achieved through:

Export Potential: India has considerable scope to increase exports of quality and value-added soyabean products to the Asia-Pacific region.

Government Support: Initiatives like increased Minimum Support Prices (MSP) provide crucial backing for farmers and encourage investment in the sector.

Research and Development (R&D): Investing in R&D is vital for improving product quality, boosting crop productivity, and developing new value-added products.

Health & Nutrition Awareness: Growing consumer health consciousness drives demand for soya’s nutritional benefits (high protein, essential amino acids, links to reduced cholesterol, cancer prevention, improved bone density).

Rising Product Demand: Demand for soya milk, tofu, and vegetarian alternatives is increasing, with the Indian soy protein market projected to grow at an 8 per cent CAGR to $478.7 million by 2027.

Growing Livestock Industry: The expanding livestock sector creates high demand for soy meal in animal feed.

Industrial Applications: Increasing use of soyabean oil in industrial products (like biodiesel, paints, adhesives) offers new growth avenues.

However, the sector faces substantial challenges:

• Infrastructure Gaps: A lack of processing facilities limits value addition and profitability for farmers.
• Low Productivity: Yields are lower than global averages due to insufficient R&D, poor seed quality, and suboptimal farming practices.
• Quality Control & Standardisation: Inconsistent product quality harms reputation; better quality control is needed.
• High Costs: Elevated input costs (seeds, fertilisers, labor) impact profitability.
• Technological Lag: Outdated technology hinders efficient processing.
• Intense Competition: Local processors face tough competition from technologically advanced international players.
• Environmental Impact: Deforestation, water pollution, greenhouse gas emissions, and pesticide use pose significant sustainability concerns.
• Distribution & Marketing: Challenges in reaching target customers impact market penetration.

Government Policies like import-export regulations, agricultural subsidies, FSSAI food safety standards, environmental laws, and labor laws all shape the sector’s operations. The Indian government has also taken steps to promote the growth of the industry, such as increasing import duties on soyabean oil and providing subsidies for soyabean farmers. 

Trade Dynamics show India as a major exporter of soyabean meal (10.5 million tons worth $4.9 billion in 2019-2020) and an importer of soyabean oil (2.5 million tons worth $2.4 billion in 2019-2020). The soy protein market in the country is specifically projected to grow at a Compound Annual Growth Rate (CAGR) of 8 per cent from 2022 to 2027, reaching a value of $478.7 million.

India is a net importer of soyabean products, primarily to meet its soaring domestic demand for edible oil. In 2020, India became the world’s largest importer of soyabean oil, with an import value of $3.02 billion. A large share of the soy oil consumed in the country is imported, mainly from Argentina, Brazil, and the US. In 2019-20, India imported around 10.5 million tons of soyabean meal, valued at $4.9 billion, which is used as a protein source in animal feed.

On the export front, India’s trade is highly volatile but has shown an upward trend over time (See Table 1). India mainly exports soy meal and soy oil. Of its total soy meal production, India exports around 65 per cent (about 3.5 million tonnes), making it one of the largest exporters of soy meal to Asian countries like South Korea, Thailand, the Philippines, and Japan. In 2019-20, India exported around 2.5 million tons of soyabean oil, valued at $2.4 billion, to major destinations such as Vietnam, Indonesia, the United States, and Malaysia.

Future Growth Trajectory

The future of the Indian soya market appears very promising, with strong growth expected in the coming years. Projections indicate that the overall market for soyabean production (See Fig. 2), the soya-processed products sector (See Fig. 3), and the soy protein sector is expected to witness significant growth (See Fig. 4). 

	Fig. 2 Projection of soyabean production volume in India
Fig. 3 Projection of soy processing sector in India (growth in MMT)	Fig. 4 Projection of soy protein market in India (growth in Million USD)

The Indian soyabean market is poised for significant growth, fuelled by both internal and external drivers. This trajectory is supported by increasing consumer demand, a robust livestock sector, and proactive government policies.

Driving forces for growth

• Rising Domestic and Industrial Demand: The growing middle class and heightened awareness of health benefits are driving consumer demand for soy milk, tofu, and other soy-based foods. Simultaneously, the expanding livestock industry relies heavily on soy meal, while industrial applications for soyabean oil (e.g., in biodiesel and paints) are opening new avenues for growth.
• Government Support: The government has been instrumental in promoting the sector. Initiatives such as increasing the Minimum Support Price (MSP) have provided crucial backing for farmers, encouraging greater cultivation and investment.
• Export Potential: India has a significant opportunity to increase its share of the global market. By improving product quality and focusing on value-added products, the industry can enhance its exports, particularly to countries in the Asia-Pacific region.
• Technological advancements are bringing automated processing, improved extraction methods, advanced equipment, increased capacity, better quality control, and energy efficiency to the sector.
• Employment Prospects are strong, with the industry currently employing around 1.5 million people. The processing units alone are projected to grow from 6,000 employees in FY 2020 to 11,000 by FY 2030, creating approximately 5,000 new skilled jobs.

Despite ongoing challenges like price fluctuations and infrastructure gaps, a commitment to continuous research and development and strategic investment is expected to enhance cultivation, improve yields, and ultimately strengthen the sector’s competitiveness.