By Dr Mahesh Kumar Dadhich
Introduction
India has long been a global hub of traditional medicine systems, with Ayurveda at its core. Medicinal plants form the backbone of this ecosystem, supporting healthcare, livelihoods, and cultural heritage. As global demand for plant-based therapies, nutraceuticals, and wellness products surges, India stands at a pivotal moment. Recent policy developments – including the Union Budget 2026/27 and the proposed Free Trade Agreement (FTA) with Europe – signal a strong intent to position India as a global leader in the Ayush sector. Achieving the ambitious target of a USD 200 billion Ayush economy by 2030 will depend significantly on strengthening the medicinal plant sector.
Union Budget 2026/27: Implications for the Ayush Sector
The Union Budget 2026/27 places renewed emphasis on preventive healthcare, traditional medicine, and natural products. Increased allocations for the Ministry of Ayush, research institutions, and digital health infrastructure indicate a shift towards integrating traditional knowledge with modern systems. For the medicinal plant sector, the budget talks about the promotion of cultivation and value addition, strengthening of supply chains and farmer linkages, and investment in research, standardization, and quality control. These initiatives are expected to improve productivity, ensure consistency in supply, and position India’s herbal products more effectively in global markets.
FTA with Europe: Opportunities and Implications
The FTA with Europe, expected to be signed by the end of this year, presents a significant opportunity for India’s medicinal plant sector to expand its global footprint. European markets are characterized by a strong and growing demand for herbal medicines, essential oils, and nutraceutical products, driven by increasing consumer preference for natural and plant-based healthcare solutions. This creates a favourable environment for India, given its rich biodiversity and long-standing tradition in Ayurveda.
The FTA is expected to open up new avenues for the export of both raw and value-added medicinal plant products, enabling Indian producers to access premium markets with higher price realization. It also offers substantial potential for the global expansion of Ayurvedic formulations and wellness products, strengthening India’s position as a key player in the international herbal industry.
However, these opportunities come with significant challenges. The European Union maintains stringent regulatory standards regarding product safety, quality, and efficacy. Indian exporters will need to ensure strict compliance with these regulations, including proper certification, traceability, and adherence to internationally accepted quality benchmarks. Additionally, competition from well-established global suppliers poses a challenge in terms of consistency, branding, and market trust.
To fully leverage the benefits of the FTA, India must focus on aligning its production, processing, and certification systems with global standards. Strengthening quality assurance mechanisms, improving supply chain transparency, and investing in standardization will be essential to enhance competitiveness and build credibility in European markets.
India’s Medicinal Plant Wealth and Traditional Knowledge Base
India’s rich biodiversity supports thousands of medicinal plant species that form the foundation of traditional healing systems such as Ayurveda, Siddha, Unani, and various indigenous folk practices. These plants are increasingly being studied and validated through modern scientific and pharmacological research, strengthening their relevance in global healthcare systems.
Key examples include Ashwagandha, widely recognized for its role in stress management, immunity enhancement, and overall vitality; Neem, valued for its strong antibacterial, antifungal, and blood-purifying properties; Turmeric, known for its powerful anti-inflammatory and antioxidant effects largely attributed to curcumin; and Tulsi (Holy Basil), traditionally used for respiratory health, immunity support, and stress reduction.
The growing convergence of traditional knowledge systems with contemporary biomedical research is enhancing the credibility, acceptance, and global demand for Ayush-based products, positioning India as a key contributor to the global herbal and natural medicine industry.
Role of NMPB in Strengthening the Sector
In the rapidly evolving medicinal plants landscape, the National Medicinal Plants Board (NMPB), functioning under the Ministry of Ayush, plays a pivotal and catalytic role in aligning the sector with global market requirements. As India moves towards expanding its footprint in international herbal markets, NMPB’s coordinated approach across ministries, states, and stakeholders is essential for building a robust, sustainable, and market-oriented ecosystem.
Through its Central Sector Scheme on Conservation, Development and Sustainable Management of Medicinal Plants, NMPB is working to ensure a stable and sustainable raw material base, which is a critical prerequisite for meeting both domestic demand and export commitments. A major focus of the Board is on in-situ conservation through the establishment of Medicinal Plants Conservation and Development Areas (MPCDAs), which help preserve biodiversity while ensuring long-term resource availability.
At the same time, NMPB actively promotes Good Agricultural Practices (GAPs) and Good Field Collection Practices (GFCPs) to enhance the quality, safety, and traceability of medicinal plant produce. The development and dissemination of scientifically validated agro-techniques for over 100 species further support farmers in adopting standardized cultivation methods. Additionally, efforts to strengthen supply chains and build stronger farmer linkages are helping transition the sector from fragmented production systems to more organized and demand-driven value chains, thereby improving consistency, productivity, and income opportunities for cultivators.
Digital and Market Reforms
Digital integration is playing a transformative role in modernizing India’s medicinal plant sector by improving transparency, efficiency, and market connectivity.
One of the key initiatives in this direction is the e-Charak platform, which functions as a dedicated digital marketplace for herbs and raw materials. It facilitates transparent trade while providing real-time information on prices, demand, and supply to farmers, traders, exporters, and manufacturers. This reduces information asymmetry and empowers stakeholders to make informed decisions.
In addition, the integration of medicinal plant raw materials with the Government e-Marketplace (GeM) is further strengthening the procurement ecosystem. It enhances efficiency, standardizes procurement processes, and improves price discovery by connecting buyers and sellers on a trusted digital platform.
Together, these digital reforms are helping shift the sector from fragmented, unorganized production systems towards more structured, demand-driven value chains. This transition not only ensures better market access and fair pricing but also supports scalability and global competitiveness in the medicinal plants industry.
Opportunities in the Medicinal Plants Sector
India’s medicinal plant sector offers immense growth potential, driven by a combination of global and domestic factors. The rising international demand for natural and herbal products, fuelled by increasing awareness of their health benefits and fewer side effects, is creating strong export opportunities.
At the same time, the rapid expansion of the nutraceutical and wellness industries is further boosting the demand for plant-based ingredients used in supplements, functional foods, and traditional formulations.
In addition, there is a growing emphasis on preventive healthcare, where herbal medicines and Ayurvedic products are gaining wider acceptance as part of a holistic lifestyle approach. This shift in consumer behaviour is significantly contributing to the sector’s growth.
Importantly, the medicinal plant industry also holds great potential for rural development, as it can generate employment and provide additional income sources for farmers through cultivation, collection, and value-added processing.
Together, these factors position the sector as a key driver of both economic growth and sustainable healthcare.
Roadmap to USD 200 Billion AYUSH Economy by 2030
Achieving the ambitious target of a USD 200 billion Ayush economy by 2030 requires a comprehensive and strategic approach built on credibility, accessibility, effectiveness, and sustainability.
Strengthening credibility is a foundational step, which involves standardization and certification of medicinal plant products, along with rigorous scientific validation of traditional knowledge. Ensuring compliance with international quality standards will be critical for gaining global trust and acceptance.
Expanding market access is another key priority. Leveraging FTAs can significantly boost exports, while strengthening digital platforms and trade networks will improve connectivity between producers and global buyers. In addition, enhancing logistics and export infrastructure will ensure efficient movement of goods and reduce trade barriers.
Improving health outcomes is equally important for the long-term success of the Ayush sector. This can be achieved through the integration of Ayush systems with mainstream healthcare, promoting evidence-based practices, and increasing investment in clinical research and validation to establish efficacy and safety.
Finally, sustainable expansion must remain at the core of growth strategies. Conservation of biodiversity, promotion of cultivated medicinal plants over wild harvesting, and support for local communities and farmers are essential to ensure long-term resource availability and ecological balance.
Together, these measures provide a clear roadmap for transforming India’s Ayush sector into a globally competitive and sustainable industry.
Strategic Recommendations
To achieve long-term growth and establish global leadership in the medicinal plants and Ayush sector, a set of focused strategic interventions is essential.
First, stronger policy integration is required to ensure effective coordination across ministries, state governments, research institutions, and industry stakeholders. This will help create a unified and efficient ecosystem for implementation and growth.
Second, greater investment in research and development is critical, particularly in pharmacological studies, clinical validation, and innovation in herbal formulations. Such efforts will strengthen scientific credibility and support evidence-based adoption of Ayush products globally.
Third, capacity building at the grassroots level must be prioritized by training farmers in scientific cultivation techniques, sustainable harvesting, and post-harvest management practices. This will improve productivity, quality, and income stability for cultivators.
Fourth, emphasis on value addition is necessary to move beyond the export of raw materials towards processed, standardized, and branded medicinal plant products. This shift will significantly enhance profitability and global competitiveness.
Finally, the development of a robust digital ecosystem is essential for improving traceability, transparency, and operational efficiency across the supply chain. The use of technology-driven platforms will enable better market access, quality assurance, and data-driven decision-making, thereby strengthening the overall sectoral framework.
Conclusion
India’s medicinal plants sector holds the key to unlocking the full potential of the Ayush ecosystem. With strong policy backing, institutional support from NMPB, and growing global demand, the sector is poised for significant expansion.
However, realizing the vision of a USD 200 billion Ayush economy by 2030 will require overcoming structural, regulatory, and market challenges while ensuring sustainability and quality.
By aligning traditional knowledge with modern science and global standards, India can emerge as a trusted global leader in herbal medicine and natural healthcare – transforming its medicinal plant wealth into economic and healthcare gains.
Dr Mahesh Kumar Dadhich is Chief Executive Officer of the National Medicinal Plants Board under the Ministry of Ayush, Government of India.
