What’s the Economics Behind Makhana, a Rising Superfood? Understanding India’s Budget 2025 Announcement

Bihar contributes to 90 percent of India’s makhana (fox nut) production, yet the state has struggled to fully capitalize on the rising global demand for this superfood. The Union Budget 2025 announcement of a “Makhana Board” aims to address these challenges by improving production, processing, value addition, and marketing.

Moreover, India currently holds the seventh position in global food exports, and offers significant growth potential, with plans to increase value-added food exports by 40 percent in 3-4 years. Additionally, the organic food market presents a major opportunity, aiming for a fourfold growth in the next five years.

This article discusses the economics behind makhana production, the focus on the state of Bihar, and the potential business and political implications of this initiative.

Makhana: A rising superfood

Makhana, harvested from the Euryale Fox plant, is a highly nutritious snack rich in protein, fiber, and essential minerals. Its growing popularity in global markets, especially among health-conscious consumers, has significantly increased demand.

GI tag for ‘Mithila Makhana’

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On August 16, 2022, Mithila Makhana received a Geographical Indication (GI) tag, a form of intellectual property (IP) that designates a product’s specific place of origin. For Mithila Makhana, the GI tag is registered under the name of Mithilanchal Makhana Utpadak Sangh. This tag protects farmers from unauthorized exports and misuse. It also boosts the product’s economy and raises awareness, while enhancing its recognition in international markets.

Nevertheless, Bihar has failed to reap the substantial economic benefits due to inefficiencies in productivity, processing, and supply chain management.

Market scope for makhana

Once considered a challenge for farming, Bihar’s flood-prone areas have become an asset, with Makhana emerging as a high-yield alternative to traditional crops. The introduction of ‘Sabour Makhana-1,’ a new variety, has significantly boosted yields and increased the edible seed ratio from 40 percent to 60 percent, enabling farmers to earn nearly three times more than they would from rice cultivation.

Meanwhile, the global market for healthy snacks has been expanding, and makhana is being marketed as a gluten-free, high-protein alternative to traditional snacks. Companies in India and abroad have started packaging and branding makhana as a premium product, increasing its value. Despite these developments, most of Bihar’s makhana is still sold in raw form, preventing local farmers from gaining a fair share of the profits. It is hoped that government subsidies, advanced processing techniques, and technological innovations will address these long-standing challenges, enabling large-scale expansion.

The global superfood market has been projected to grow from US$164.38 billion in 2021 to US$228.04 billion by 2026, driven by rising health consciousness and demand for foods labeled vegan, gluten-free, and functional products. While countries have capitalized on their native superfoods, India, despite being a top agri-exporter, has yet to fully leverage its potential in superfoods. Key Indian products such as turmeric, amla, moringa, jackfruit, millets, and makhana could become major players in the global superfood market.

Role for foreign stakeholders

The establishment of the Makhana Board presents several opportunities for foreign investors in India’s growing superfood market.

Key areas of investment, collaboration, and R&D to boost productivity include the development of modern processing facilities, enhancing export capabilities through quality certification and branding, and introducing agri-tech innovations, such as improved seed varieties, automated harvesting techniques, and sustainable farming practices.

Foreign retail and FMCG (fast-moving consumer goods) brands can explore private-label partnerships with local makhana producers, introducing premium, value-added makhana products in global supermarkets and e-commerce platforms. Meanwhile public-private partnerships can help to develop supply chain logistics, cold storage facilities, and direct farmer procurement models.

Current challenges faced by Bihar’s makhana industry

1. Low productivity: Traditional farming methods result in lower yields, with farmers achieving only 1.7–1.9 tonnes per hectare compared to the potential 3–3.5 tonnes per hectare using modern techniques. The absence of systematic training programs for farmers limits the adoption of best agricultural practices.
2. Lack of processing infrastructure: Due to inadequate food processing units, raw makhana is often sold at lower prices to companies outside Bihar, reducing local farmers’ earnings. Establishing more local processing facilities could increase value addition and improve farmer incomes.
3. Export barriers: Strict global quality standards have limited exports, with only 2 percent of Bihar’s makhana meeting international requirements. Exporting makhana requires compliance with food safety and hygiene certifications, which many small farmers cannot afford.
4. Market inefficiencies: The absence of an organized marketing chain means farmers often receive lower prices due to the dominance of intermediaries. A well-structured supply chain would ensure that farmers receive a fair price for their produce while expanding the market reach.
5. Limited awareness among farmers: Many makhana farmers lack awareness about government schemes, financial incentives, and modern agricultural practices that could improve their productivity and earnings.

Budget 2025-26 announcement: Establishment of a ‘Makhana Board’

Finance Minister Nirmala Sitharaman announced the creation of a “Makhana Board” in Bihar, with an allocated budget of INR 1 billion. The Board aims to:

• Enhance production and productivity: Support farmers with better seed varieties and modern agricultural practices to increase yields.
• Improve processing and value addition: Establish local processing units to increase farmers’ profitability and reduce dependence on middlemen.
• Provide training and market support: Facilitate access to government schemes, educate farmers on best practices, and create an organized market structure to eliminate intermediaries.
• Boost domestic and international branding: Promote makhana as a premium product in both domestic and global markets by assisting in branding, certification, and export facilitation.

Political implications

The formation of the Makhana Board carries significant political weight ahead of Bihar’s state legislative elections this year. The farming and harvesting of makhana is primarily done by the Mallah community (a fishing and boatmen community) in the riverine belts of North Bihar spanning from Sitamarhi-Madhubani to Supaul-Kishenganj. The Mallah community constitutes about 2.6 percent of Bihar’s population. Strengthening their economic prospects could influence electoral outcomes and improve their socio-economic conditions.

Impact on farmers and the local economy of Bihar

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From an economic perspective, improved makhana processing and marketing could boost Bihar’s agricultural exports, aligning with India’s broader strategy of promoting indigenous superfoods globally, such as moringa, Jamun (Indian blackberry) amla, ashwagandha (winter cherry), buckwheat, flax seeds, forest honey, and millets like ragi.

Infrastructure developments, such as the expansion of Patna airport and the establishment of new airports in Purnea and Darbhanga, will further support exports by improving logistics. Additionally, the government’s focus on food processing through initiatives like the National Institute of Food Technology, Entrepreneurship and Management in Bihar will contribute to the sector’s growth. Also announced in Budget 2025 was special financial support for the West Kosi Canal project, which would improve irrigation facilities in the Mithilanchal region of Bihar and benefit farmers cultivating over 50,000 hectares of land in the area.

Key outcomes under the policy push to support makhana production:

• Increased incomes: By ensuring fair pricing and reducing intermediaries, farmers can expect better financial returns.
• Employment opportunities: The establishment of processing units will generate jobs for local workers, particularly women who are often involved in makhana processing.
• Export growth: With better quality control and branding, makhana exports are likely to rise, contributing to India’s foreign exchange earnings.
• Rural development: The success of the Makhana Board could set a precedent for other agricultural sectors, encouraging similar initiatives for products like litchi, mango, and mustard seeds cultivated in Bihar.

Will the Makhana Board deliver?

While the Makhana Board promises to revamp Bihar’s makhana industry, its success depends on:

• Effective implementation of financial and infrastructure plans: The government must ensure that funds are allocated efficiently and that bureaucratic delays do not hinder progress.
• Timely establishment of processing and marketing support systems: Without functional processing units and strong market linkages, farmers may continue to struggle.
• Coordination between the Center and State governments: Ensuring policy continuity and support from both levels of government is crucial for long-term impact.
• Private sector involvement: Encouraging private investment in makhana processing and branding can further accelerate growth in the sector.
• Training and awareness campaigns: Ensuring that farmers are educated about new techniques, quality control, and financial support options is key to maximizing the Board’s impact.

Conclusion

The Makhana Board presents an opportunity for Bihar to become a global hub for makhana production and exports. If executed well, it could transform the lives of thousands of farmers while strengthening India’s position in the global superfood market. The initiative has the potential to create a structured and profitable supply chain, benefiting all stakeholders involved.

However, the real test lies in the government’s ability to deliver on its promises beyond election-driven announcements. The success of the Makhana Board will ultimately be determined by the effectiveness of its implementation, the level of farmer participation, and the efficiency of newly established infrastructure. If these elements are successfully integrated, Bihar’s makhana industry could see exponential growth in the coming years. Otherwise, the initiative risks becoming just another unfulfilled policy proposal, leaving Bihar’s farmers to continue struggling with the same challenges they have faced for decades.

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