Brewing Under Pressure: India’s Coffee Sector Navigates EU Anti-Deforestation Rules

As the EU implements strict anti-deforestation regulations, exporters worldwide now have to prove the sustainability of their supply chains. With the majority of India’s coffee sector relying on EU exports, it must find ways to comply with regulations while protecting the livelihoods of small growers and holding onto market share, as well as aligning with international environmental standards.

Illustration by The Geostrata

UNDERSTANDING THE EU DEFORESTATION REGULATION (EUDR)

The‍‌‍‍‌‍‌‍‍‌ European Union Deforestation Regulation (EUDR) is one of the measures designed to reduce the impact of deforestation related to global trade by limiting the cross-border trade of certain products within the EU to those that meet the requirements of the regulation.

The principal objective is to ensure that the products entering or exiting the EU market do not come from land that has undergone deforestation or environmental degradation after December 31, 2020. Products covered by this regulation include coffee, cocoa, rubber, cattle, palm oil, wood, soy, and their derivatives, including beef, furniture and chocolate.

Under the rule, the commodities must meet these requirements:

1. They must be deforestation-free.

2. Their production must adhere to the laws and regulations of the country of origin.

3. They must be supported by a due diligence statement that includes data collection, risk assessment, and mitigation measures, confirming that companies have verified their origin and compliance with EUDR obligations.

The rule affects any company that imports, produces or exports them to or from the EU market, regardless of whether they originate from the EU or a non-EU country.

It also includes operators (those placing products on the market or exporting them from the market) and traders (those distributing and selling them). Under the regulation, companies have to prove that their products meet the requirements by submitting a due diligence statement.

It includes collecting supply chain information (including detailed geolocation data or polygon mapping of plantations for traceability and product segregation measures), assessing the risk of deforestation, and taking steps to eliminate any identified risk before the product can be put on the market.

The EU postponed the start of EUDR compliance by 12 months in December 2024 to give companies more time to prepare to meet its requirements, and it also received complaints from many countries.

Governments and industry groups in Latin America, Africa, and Southeast Asia warned of trade friction for small farms, and the World Trade Organisation also received complaints about the regulation. Now, the rule is set to take effect from December 30, 2025, for large enterprises and June 30, 2026, for small and medium enterprises.

WHY THE EUDR MATTERS

EUDR is recognised as one of the world’s toughest laws to curb tropical deforestation, but it offers the EU a major opportunity to limit its role in global biodiversity loss.

Since 2014, the EU has been ranked as the second-largest importer of goods linked to tropical deforestation after China.

In fact, among the 160 agricultural products imported by the EU, only six (beef, palm oil, soy, cocoa, coffee, and rubber, as covered by the EUDR) accounted for 58% of the estimated forest loss linked to EU imports.

The rules form part of a wider effort to ensure European consumption doesn’t drive global deforestation. Additionally, the regulation reinforces the commitment made by over 140 countries that signed the Glasgow Leaders' Declaration in 2021 to halt and reverse forest loss and land degradation by 2030.

Moreover, it can act as a model for other major consumer markets looking to lower their environmental footprints and help create deforestation-free supply chains.

WHY COFFEE IS IN THE HOT SEAT

According to Wageningen Economic Research (2023), coffee plays a notable role in global deforestation, enough for the European Union to list it among the top commodities linked to forest loss.

While coffee is responsible for roughly 7% of EU-linked deforestation from agricultural products, its environmental footprint is still significant, putting the popular beverage under growing scrutiny from regulators and sustainability advocates.

EUDR’S IMPLICATIONS FOR INDIA'S COFFEE SECTOR

India is the seventh-largest coffee producer globally and the fifth-largest exporter, contributing 3.5% of global coffee production and 5% of exports.

With exports reaching $1.29 billion in 2023-24, almost double the $719.42 million in 2020-21, about 70% of India’s coffee is exported, nearly 60% to the EU, making growers anxious about the new regulation. Rising Robusta prices and growing demand from Italy, Belgium, and the UK have fueled the growth in exports, despite global trade turbulence.

In May 2025, the European Commission published a benchmarking system ranking countries as low, standard, or high risk based on deforestation linked to commodity production.

India is classified as a low-risk country, but a significant compliance gap remains. Nine in ten coffee farmers are smallholders operating on farms of ten hectares or less, making compliance costly and complex.

As KK Vishwanath, president of the Karnataka Coffee Growers Federation, said “Coffee prices are finally looking up after years of volatility, but this regulation threatens to undo our gains.

We are not against sustainability, but the cost and complexity of compliance are a burden on small farmers. Most of us don't even know how to create GeoJSON files.” A GeoJSON file is a standardised format for storing geolocation data.

Indian exporters face strict traceability and verification requirements. End-to-end traceability is difficult across fragmented supply chains involving numerous smallholders in remote areas with limited technology.

This results in inconsistent data collection and missing digital farm-to-export records. Exporters must submit precise geolocation data for all farms and verify non-deforestation claims with credible evidence, which is complicated by unreliable historical land-use data in many regions.

Adopting technologies like blockchain for traceability or satellite monitoring requires substantial investment and time, posing a financial burden, especially for SMEs.

Small coffee growers face similar issues. Limited awareness and facilities make it hard to provide plot-level GPS coordinates and non-deforestation documentation, which is both expensive and complex.

Failure to comply can exclude farmers from the EU market, prompting buyers to favor larger estates or organized cooperatives. This is particularly disastrous for coffee farmers in hilly regions, where coffee is a vital livelihood.

Moreover, many smallholders are not even aware of the compliance requirements necessary to export their beans to EU countries.

THE COUNTDOWN TO DECEMBER: INDIA'S COFFEE BOARD STEPS UP

The Coffee Board of India, based in Bengaluru, is amplifying its efforts to bring India’s coffee sector in line with the compliance requirements of the EUDR. 

Recognising the urgency to address this transition, the Coffee Board has launched a grower registration model associated with its India Coffee App.

Through the app, coffee growers can map their plantation, verify data through extension officers, and share it directly with exporters.

The integrated system provides an accurate, trustworthy, and transparent way to fulfill the EUDR data requirements, eliminating the need to rely on costly external consultants.

As Karuthamani, Joint Director of the Coffee Board of India, explained, once the farmers register with the India Coffee App, Coffee Board of India's staff members will visit the plantations and conduct the mapping through geolocation for small plantations and polygon mapping for plantations larger than 10 acres. 

The Coffee Board advised producers not to share sensitive plantation information with private businesses undertaking similar mapping efforts, noting the risk of misuse of information.

But despite the initiative's promise, adoption has been low. So far, only around 9,000 of India's 4.41 lakh registered coffee growers have registered on the India Coffee App.

To increase participation, the Board will implement extensive awareness campaigns and capacity-building programmes in key coffee growing states and it is also working with industry associations and exporters to help with the importance of digital registration for compliance measures.

Meanwhile, exporters indicate that European buyers are already stockpiling Indian coffee beans to prepare for the future implementation of the EUDR. Karnataka’s shade-grown coffee, in particular, thrives on its quality and sustainability, giving it a strong competitive advantage under the new regulations.

Most coffee production in India occurs across the Western and Eastern Ghats, taking full advantage of the diverse and ecologically rich region, reinforcing India's brand of coffee as aligned with nature and global standards for sustainability.

THE ROAD AHEAD: BREWING A SUSTAINABLE FUTURE

If the compliance system of the Coffee Board works well, the EU regulation can highlight India's commitment to sustainable coffee. Successful transition would enhance India's image as a more responsible producer of coffee but also will position the industry to stay ahead of future regulations like the EUDR.

Simultaneously, it is important that the small coffee farmers are integrated into this change fully to avoid India from losing access to one of its largest coffee markets.

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BY JANHAVI THOMBRE

TEAM GEOSTRATA

info@thegeostrata.com