Each olive tree costs 130 rupees ($2.19; £1.40) to plant but farmers pay just 28 rupees. And 90% of the cost of setting up a drip irrigation system, which is expensive to install but uses water more efficiently, is covered.
Sahabram Saharan, 52, for decades grew wheat and cotton, which require a lot of water.
But in April, he planted his first olive trees across 10 hectares at his farm in the village of Madera close to the Pakistan border. In August, he plans to add five more hectares.
“There’s a scarcity of water in Rajasthan. There’s not enough,” he said.
“I know olive trees last for 100 to 150 years. That’s why I decided to plant them. I’ve just started, but in four years, olives will begin to grow. I know people make oil from olives. I will do the same.”
There is huge potential to increase the area under cultivation in Rajasthan, which is two-and-a-half times larger than Greece, the world’s third largest producer of olives.
A sophisticated refinery using machinery from Italy will soon be ready to press olive oil in Rajasthan, and the plan is to tap into the rising demand in the domestic market.
Data published in April from the Madrid-based International Olive Council showed imports of olive oil, largely from Spain and Italy, climbed by 48% between October 2012 and February 2013 compared to the same period a year earlier.
A growing number of Indians are becoming aware of the supposed health benefits of olive oil, which has been shown to lower high blood pressure and reduce the risk of heart disease, stroke and certain cancers.
“When I came here for the first time, I could not find a single bottle of olive oil. I found it only in pharmacies, small bottles for the skin. Now you find it everywhere,” said Gideon Peleg, an Israeli agriculture expert who has been working with Rajasthan Olive Cultivation Limited.
Olive farming/Rajasthan Olive farmers say the scarcity of water is an impediment to increasing production
Around 25 tonnes of olive oil will be pressed this year from September, according to Mr Verma, and he believes it could be available in Indian stores as early as next year.
A litre of imported extra virgin, the highest quality of olive oil, costs 750 rupees (£8; $12) at a New Delhi supermarket. The hope is with domestic production, prices will fall so that more Indians can enjoy the product.
The next challenge will be marketing Rajasthani olive oil, which Mr Peleg describes as a “weak point”.
Spain, the world’s biggest producer which last year accounted for around 50% of total production worldwide, has spent millions of dollars to promote its olive oil domestically and internationally.
For India to fulfil its global ambitions, it will have to do the same.
“Any consumer good requires a marketing programme and a sales network,” said VN Dalmia, president of the Indian Olive Association and owner of the Leonardo Olive Oil brand in India.
“Olive oil from Rajasthan will need to overcome a low quality perception.”
Article source bbc.co.ukIndia's plan to become a leading olive oil producer,