Report Overview

Surging the demand for essential oils from personal care industry and rising application in supplement and pharmaceutical industries are projected to propel the expansion of India essential oils market during the forecast period between 2023 and 2029.

India Essential Oils Market - Industry Trends & Forecast Report, 2029

India essential oils market size is expected to grow at a CAGR of 6.92% during the forecast period between 2023 and 2029. Major growth drivers for India essential oils market include the rising demand for natural and organic products, increasing awareness about the health benefits of essential oils, and the popularity of traditional medicine systems such as Ayurveda and aromatherapy. Essential oils are highly concentrated plant extracts that are used in a wide range of personal care, cosmetic, and aromatherapy products. The market growth is being propelled by several factors, one of which is the introduction of innovative aromas and flavors, such as rose, hyssop, roman chamomile, myrrh, and grapefruit. Also, the market is experiencing an increase in demand for organic products with longer shelf life and added health benefits, which is further boosting product adoption among consumers. Furthermore, the utilization of these products in medicines to treat dermatological, respiratory, and dental disorders is on the rise, and the Government of India (GoI) is implementing various initiatives to promote preventive healthcare, both of which are expected to contribute to the market's growth.

India Essential Oils Market – Overview

Essential oils are highly concentrated hydrophobic fluids that contain active chemical phytoconstituents derived from different parts of plant species such as herbal plants, rinds, leaves, and barks. These oils are referred to as 'essential', as they contain the essence of plants' perfumes. Essential oils are extracted using various techniques including evaporation, cold pressing, resin pressing, solvent evaporation, expression, wax plugging, and absolute oil drilling. The primary principle behind the use of essential oils is their distinctive aromatic hydrocarbons that help to relax the body. Essential oils are widely used in pharmaceutical formulations due to their numerous health benefits, and they are derived from plants, making them safe with no adverse reactions. India Essential Oils are classified into various types including Lemon, Orange, peppermint, spearmint, lime, clove, eucalyptus, and citronella. Lemon oil provides empowering and purifying effects, Lavender oil provides comforting and soothing effects, Peppermint oil alleviates travel sickness and nausea, Bergamot oil relieves ache and aids digestion, and orange oil combats bad odor while empowering and purifying. Essential oils are utilized as a raw material in the production of different items such as food, beverages, lavender oil products, beauty products, home healthcare products, and perfumes. Plant waste is also used as a raw material for the production of essential oils.

India Essential Oils Market

Growth Drivers

Surging Demand from Personal Care Industry

The personal care industry is one of the key end-use industries for essential oils. Essential oils are widely used in the production of cosmetics, perfumes, and toiletries due to their natural and aromatic properties. One of the key factors driving the demand for essential oils in the personal care industry is their longer shelf life than synthetic fragrances. Essential oils are natural and do not contain any synthetic ingredients, which makes them highly desirable for consumers who prefer natural products. Moreover, essential oils have been found to have various therapeutic properties that benefit the skin and hair. For example, essential oils like lavender, tea tree, and peppermint are used in the production of skincare and hair care products due to their antibacterial and anti-inflammatory properties. The increasing demand for natural and organic personal care products is also driving the growth of the essential oils market. Consumers are becoming more conscious of the ingredients used in their personal care products and are opting for natural alternatives.

Restraints

Side-effects Related to Inappropriate Dosage

Inappropriate dosage or misuse of essential oils can lead to adverse side effects. Essential oils are highly concentrated plant extracts that need to be used in the appropriate dosage and with caution. If used improperly, they can cause skin irritation, allergic reactions, and other health problems. The potential side effects of essential oils have led to concerns among consumers and regulatory bodies, which can restrain the growth of the essential oil market in India. Consumers may become hesitant to use essential oils if they perceive them as potentially harmful or if they are not properly informed about their use. Also, the lack of standardization in the essential oil industry can also lead to safety concerns. There is currently no regulatory framework in India for essential oils, and the quality and purity of essential oils can vary widely among different brands and suppliers.

Impact of COVID-19 on India Essential Oils Market

COVID-19 had detrimental impact on the essential oils market in India. The disruption in the supply chain caused by the pandemic and related lockdowns has resulted in a shortage of essential oils, affecting their production and availability. Additionally, the closure of many businesses and industries reduced the demand for essential oils, including spas, salons, and other businesses that use essential oils in their services. Despite these challenges, the pandemic also created new opportunities for the essential oils market, as consumers became more health-conscious and are looking for natural remedies and products, including those that contain essential oils. Furthermore, the shift towards online shopping has led to an increase in online sales for companies in the essential oils market.

India Essential Oils Market

Segmental Coverage

India Essential Oils Market – By Type

By type, India essential oils market is bifurcated into Singles and Blends segments.

India Essential Oils Market – By Product

By product, India essential oils market is segmented into Lavender Oil, Lemon Oil, Orange Oil, Frankincense, Chamomile Oil, Lime Oil, Rosemary, Tea Tree, Eucalyptus Oil, Clove Oil, and Peppermint Oil. The clove segment is expected to dominate due to its characteristics. Clove is the dried flower bud of an evergreen tree of medium size and is available in the Molucca islands of Indonesia. It is a good source of nutrients, including minerals, vitamin C and A, essential oils, non-volatile propyl extract (fat), and dietary fiber. India and the United States are the largest importers of cloves worldwide. Clover leaf oil is typically obtained through the process of evaporation.

India Essential Oils Market – By Application

By product, India essential oils market is segmented into Spa & Relaxation, Personal Care & Cosmetics, Food & Beverages, and Pharmaceuticals. The Spa Relaxation (Aromatherapy) segment is expected to be the highest throughout the predicted period. Aromatherapy involves the use of liquid substances derived from plant materials, which contain volatile oils, and is achieved through various techniques. The demand for aromatherapy is being driven up by changing lifestyles and their implications, such as increased stress and depression, as well as higher disposable incomes. Essential oils are extracted from natural plant sources, such as flower petals, herbal products, and trees. Aromatherapy commonly uses essential oils like tea tree, jasmine, rose, and peppermint oils. These oils are used in relaxation therapies, acupressure, and other types of care. Followed by, food and beverages segment dominating the market. Essential oils have antimicrobial properties that are utilized to prolong the shelf life of food and beverage products. Food and beverage manufacturers are increasingly focused on extending product shelf life without compromising quality, which is a significant driver of growth for this application segment. There is a growing demand for natural, safe, and minimally processed food products worldwide, which is the major factor driving the use of essential oils in food and beverage applications. Also, personal care and cosmetics segment witnessed a fast growth during the forecast period. The pleasant fragrance of essential oils makes them ideal for use in personal care products, such as cosmetics, toiletries, and fragrances like perfumes, body sprays, and air fresheners. Essential oils are categorized as base notes, middle notes, and top notes based on their volatility, which is important for their use in perfumes. Moreover, the rise in consumer disposable incomes and growing awareness regarding the need to maintain a healthy lifestyle are expected to drive the demand for fragrances produced using essential oils.

India Essential Oils Market – By Distribution Channel

Based on distribution channel, India essential oils market is split into Direct and Retail segments.

India Essential Oils Market – By Region

Geographically, India essential oils market is divided into North India, South India, East India, and West India regions. Some of the major essential oil-producing states in India are Tamil Nadu, Karnataka, Uttar Pradesh, Andhra Pradesh, and Maharashtra. Tamil Nadu and Karnataka in South India are major producers of sandalwood oil, while Uttar Pradesh in North India is known for its production of menthol oil. Andhra Pradesh in South India is a significant producer of citronella oil, while Maharashtra in West India produces a range of essential oils, including eucalyptus, lemongrass, and patchouli.

Competitive Landscape

Major players operating in India essential oils market include GrainCorp, Malteurop, Rahr Corporation, Boortmalt, Indesso, Lipoid Kosmetic AG, The Herbarie at Stoney Hill Farm, Inc.,  International Flavors & Fragrances, Inc., Bell Flavors & Fragrances, and Rutland Biodynamics Ltd. Malteurop, Rahr Corporation, Boortmalt, Indesso, Lipoid Kosmetic AG, The Herbarie at Stoney Hill Farm, Inc.,  International Flavors & Fragrances, Inc., Bell Flavors & Fragrances, and Rutland Biodynamics Ltd. To further enhance their market share, these companies employ various strategies, including mergers and acquisitions, partnerships, joint ventures, license agreements, and new product launches.

Scope of the Report

By Type

• Singles

• Blends

By Product

• Lavender Oil

• Lemon Oil

• Orange Oil

• Frankincense

• Chamomile Oil

• Lime Oil

• Rosemary

• Tea Tree

• Eucalyptus Oil

• Clove Oil

• Peppermint Oil

By Application

• Spa & Relaxation

• Personal Care & Cosmetics

• Food & Beverages

• Pharmaceuticals

By Distribution Channel

• Direct

• Retail

By Region

• North India

• South India

• East India

• West India