Cooperatives in India: a history of tradition and progress

India is amongst the countries with the highest amount of cooperatives in the world and with a wide-reaching tradition that is entrenched in credit entities and agricultural societies.
India is one of the countries in the world where most importance is placed on the social economy in the world. 

In fact, the country was chosen to inaugurate the UN 2025 International Year of Cooperatives last November. India is a country with great importance in the cooperative movement: virtually one quarter of the cooperatives around the world are located in India.

According to a statistical survey that was carried out by National Coop Union of India in 2018, in India there are around 800,000 cooperatives, with over 290 million members in total and 19 multi-state federative entities that represent their respective sectors on a national scale.

The Indian economy has a highly significant growth potential and it is estimated that it will be the one that grows most amongst the 20 largest economies in the world over the next few years. The country, located in southern Asia, is the eighth largest in size and it has the second largest population in the world, only behind China.

The origin of cooperativism in India

India has an important cooperative tradition, based on the ancient “Vasudhaiva Kutumbakam” philosophy (“The world is a family”). Before the appearance of cooperatives, the communities worked together to obtain goods such as water tanks. There is also a long-standing tradition of creating informal credit mutual associations.

At the end of the 19th century, a large part of the population was pushed towards the world of farming, one of the only sources of work in the country at the peak of the industrial revolution. In order to get ahead, many producers needed these informal credit entities.

Cooperatives were not turned into a formal organisation until 1904, with the adoption of the Cooperative Credit Societies Act, which was updated over the years. With the arrival of Independence in 1947, the cooperatives were strategically integrated into the country’s development plans and continued to grow along with it.

India: a country of cooperatives

Cooperatives in India have a significant importance in the economy, but if there is one sector where they are clearly prevalent, this must be farming. It is estimated that 98% of the rural areas are organised using a cooperative regime. In total, there are 26,798 agricultural cooperatives in India, but there are many other types of cooperative in the country.

Cooperatives in the Indian economy may be found in sectors such as industry, consumer goods, shipping, education, real estate, textile or tourism, to name but a few.

Two of the largest cooperatives in the world regarding invoicing by Gross Domestic Product (GDP) per capita are Indian. One of them is the fertiliser cooperative, Indian Farmer Fertilizer Cooperative (IFFCO); the other is the Gujarat Cooperative Milk Marketing Federation Ltd, known by its initials GCMMF or AMUL.

Such is the importance of cooperatives in the country that since 2016 they have their own government ministry. The Ministry of Cooperation has the job of providing an independent administrative, legal and political framework to strengthen the cooperative movement in the country. The ministry works under the slogan ‘Sahakar se Samriddhi’ or “Prosperity through cooperation.”