By: ICN Bureau
Last updated : August 12, 2025 9:53 am
Experts suggest a sharper focus on innovation, biotechnology, functional fragrances, AI integration, and sustainable sourcing to unlock the next phase of growth
India’s flavours and fragrances industry is at a crucial juncture. With rising global demand, shifting consumer preferences toward natural and sustainable ingredients, and an increasingly competitive market landscape, the time is ripe for Indian players, especially MSMEs to transition from being primarily raw material suppliers to value-added solution providers.
Industry experts discussed the latest trends and opportunities recently at the 5th edition of the NextGen Chemicals and Petrochemicals Summit 2025 themed ‘Preparing for the future' in Mumbai on June 18-19, 2025.
The eleventh session at the event titled, ‘Flavours and Fragrances: Time for Value addition’ was moderated by Pravin Prashant, Executive Editor, Indian Chemical News who briefly outlined the current market dynamics as well as future potential of the industry.
“The Flavours and Fragrances industry is rapidly emerging as a promising and highly profitable segment within the chemical sector. Industry estimates suggest that the market could touch US$ 46 billion globally by 2033. While a few large players dominate the space, the segment also comprises a substantial number of small and medium-sized enterprises (SMEs), making it a dynamic and diverse ecosystem.”
Vikas Rishi, Managing Director, Tojo Vikas International Pvt. Ltd. shared a few realistic examples on how the Indian flavour and fragrance players should look at upgrading with biotech and artificial intelligence (AI).
“Biotechnology is poised to be a game-changer in the flavours and fragrances industry. We were among the pioneers globally to research, scale up, and commercialize biotech-derived molecules for this segment. Even in developed markets, many large companies prefer to outsource the manufacturing of such complex molecules, and we’ve been actively developing them at our Bengaluru facility. In fact, we have already achieved global leadership in 2–3 products within this niche. The biotechnology aligns perfectly with the principles of sustainability, circular economy, and low carbon footprints, while also enabling the creation of novel, functional ingredients. For instance, can do vanilla with turmeric infusion as well as many such combinations only through biotechnology. In terms of using artificial intelligence, there are many excellent examples. There is a company that created an algorithm based on facial expressions of people while using perfumes to customise it for specific set of customers. Nestle is designing the cookies flavour based on social media chatter. I think AI should be used for validation and democratization. It should not be a challenge to human expertise in perfumes but used in tandem with human interventions. AI can help narrow down choices in enzyme research. For instance, where millions of options exist, AI can refine the list to just 30 viable candidates. This alone can reduce development cycles from 10 years to just one. There are even efforts to link gut flora data to AI to generate targeted fruit-based flavours based on individual health needs. That’s the cutting edge and it reinforces my belief that AI is a powerful enabler, not an adversary.”
Pooja Manek, Manager - Chemicals, CRISIL Intelligence called upon innovators to tap into India’s rich biodiversity and global consumer trends.
“India’s flavours and fragrances market is evolving rapidly, currently valued between USD 3.5 to 3.8 billion and growing at a CAGR of 11–12%. It is expected to cross USD 5 billion in the coming years. The market is witnessing heightened activity, driven by increasing demand from food & beverage segments, changing consumer preferences influenced by Western trends in cosmetics, and rising disposable incomes. While a few large players control around 30% of the market and multinationals about 10%, the industry remains largely fragmented, with MSMEs and SMEs accounting for 50–60% of the share. These smaller players have significant market presence and should focus on key emerging trends such as the shift toward natural and sustainable ingredients. India has abundant access to herbs and flowers, making extraction and raw material sourcing relatively easy. In fact, the country exports nearly 55–70% of its flavours and fragrances production. To stay competitive, MSMEs should also tap into functional fragrances with targeted properties like antimicrobial or antioxidant benefits and offer customized solutions tailored to Indian consumer preferences. As they eye global markets, adopting eco-friendly packaging and leveraging government support through equity funding, cluster development programs, and digital platforms will be crucial to their success.”
Murari Mohan Jha, Editor, Indian Chemical News emphasized the importance of focus on innovation and sustainability in the flavours and fragrances.
“Sustainable sourcing, clean energy, and advanced technologies must form the cornerstone of India’s evolving flavours and fragrances industry. The companies in this sector need to prioritize renewable and responsibly sourced ingredients. This not only ensures long-term supply chain resilience but also reflects positively on the brand in global markets where ethical sourcing is a key differentiator. These also need to adopt energy efficient processes, reduce water consumption and minimise greenhouse gas emissions throughout the production chain. Moreover, transition to a recycable, compostable and refillable packaging options to reduce waste. Utilising eco-friendly solvents and alternatives to harmful chemicals, enhancing the sustainability aspects of flavour and fragrances. Consumers and business partners alike are looking for proof of ethical sourcing, clean manufacturing, and a genuine commitment to the planet. These companies can integrate the sustainable sourcing and production to enhance brand value as well as address consumer skepticism by prioritising transparency, ethical sourcing, and eco-friendly practices. This involves focusing on renewable ingredients; minimizing waste and carbon emissions; and adopting sustainable packaging and production methods. By communicating these efforts authentically, they can earn consumers’ trust, strengthening their brand image and contribute to the sustainable future. By embedding sustainability into the core of sourcing, manufacturing, and branding strategies, Indian companies can not only gain a competitive edge globally, but also build stronger, more trusted brands at home. In a nut shell, it is the sustainable sourcing, use of renewable energy and technology to enhance the sustainability aspects of flavours and fragrances.”
The 5th edition of NextGen Chemicals and Petrochemicals Summit 2025 themed ‘Preparing for the future' witnessed massive attendance by leading industry experts and stakeholders from pan India. The 12 sessions at the two-day event were attended by a total of 85 speakers and more than 500 delegates.
The Country Partner of the event was Flanders Investment & Trade. The State Partner was Andhra Pradesh Economic Development Board (EDB). The Principal Partner was DCM Shriram Chemicals. The Gold Partners included Revvity Signals, Ingenero, Tubacex, GloGreen, BTG (A Voith company), Gujarat Fluorochemicals, Excel Industries, Epsilon Carbon, Aquapharm, HPCL, BPCL, and WoodField.
The Associate Partners were Zodiac Tank Container Terminals, ReGreen Excel and AnalytikJena. The Supporting Partner was Archroma.
Industry Association Partners of the event included AMAI, CropLife, Gujarat Chemical Association, and Agro Chem Federation of India.