Formulators pricing ashwagandha this month are working from a different supply picture than the one they budgeted against a year ago. Two forces converged in 2026: retail demand for root-only extract kept accelerating, and India, which supplies more than 85% of the world’s raw material according to IndoFolk Wellness, narrowed its own legal supply pool by writing leaf and aerial-part material out of the compliant category entirely.
The regulatory piece
In April 2026, India’s Ministry of AYUSH issued directive T-13020/4/2022-DCC-Part(2), mandating that only ashwagandha roots may be used in Ayush formulations. The directive prohibits leaves and aerial parts and requires manufacturers to declare plant part on labels, according to NutraIngredients. FSSAI followed with its own advisory, F.No. RCD-15001/11/2021-Regulatory-FSSAI, reinforcing that only root and root extracts are permitted in foods and nutraceuticals, with enforcement aimed at non-compliant operators.
This was not a sudden reversal. The Ministry had recommended root-only use as far back as 2021. What changed is the scale of what the rule now excludes. National Medicinal Plants Board data for 2024-2025 showed 4,698 tons of ashwagandha leaves sold against 4,170 tons of roots, per the same NutraIngredients reporting, meaning leaf and aerial material had grown to nearly half the tonnage moving through India’s domestic supply chain by volume. That tonnage is now, on paper, off the table for anything sold as compliant root material.
Why regulators moved
The adulteration data explains the urgency. A published HPTLC survey of 584 commercial ashwagandha extract batches found 14.0% rejected outright for leaf residue and another 20.4% containing incomplete root material, meaning roughly a third of batches tested were not what their labels claimed, according to the NutraIngredients reporting cited above. For years, cheaper leaf and aerial material quietly stretched the effective root supply without showing up on a certificate of analysis. Regulators have now cut that off, at least for product sold into India’s own Ayush and food channels, and the ripple effect should reach export documentation and certificates of analysis before long.
Demand keeps pointing the same direction
Layer the demand side on top and the timing looks worse for buyers, not better. SPINS retail-scan data shared through Vitafoods Insights shows U.S. dollar sales of root-only ashwagandha VMS products up 12.7% year over year, while blended root-and-leaf items fell 7.9%. KSM-66, the branded root-only extract, grew 21.5% in brick-and-mortar retail. Food and beverage applications, ashwagandha teas, kombucha and functional drinks, grew 40% year over year. Every one of those growth lines points buyers toward exactly the material category India just tightened.
The category’s overall trajectory backs this up. The global ashwagandha extract market was valued at $815.7 million in 2025 and is projected to grow at an 8.2% CAGR to $1.79 billion by 2035, with North America holding 32% of demand, according to Future Market Insights. A separate estimate from Market Data Forecast, cited by NutraIngredients, put the broader ashwagandha market at $725 million in 2024, rising to $1.4 billion by 2033 at the same 8.2% CAGR. Either way, the demand curve was not built to absorb the sudden loss of nearly half the domestic tonnage.
Spot prices are already moving
India’s ashwagandha crop is typically sown in the June-July or September-October window and harvested some 150 to 180 days later, generally January through March, according to Organic Mandya. That means mandi trading in mid-July is drawing on thinning post-harvest farmer stocks ahead of the next planting cycle, exactly the window when volatility tends to show up.
Mandi data compiled by KisanDeals showed ashwagandha trading around ₹165/kg as of May 6, 2026. Agmarknet data tracked by ACROP showed the national average climbing to near ₹205/kg by early July, with Mandsaur APMC touching ₹230/kg, before Sehore APMC settled back to roughly ₹179/kg by July 14. None of that is dramatic in isolation. But the direction and the volatility both matter: this is thinner, choppier trading than the market saw a year earlier, in a season when leaf material can no longer pad out volume the way it used to.
A pattern of shocks
This is not the first supply disruption the category has weathered. India imposed temporary export restrictions on ashwagandha raw materials in March 2024, contributing to shortages in U.S. and European markets, and adverse weather in major growing regions cut crop yields by roughly 20% in October 2023, according to DataBridge Market Research. Both episodes are well behind the market now, but they established a pattern worth remembering: this is a single-origin crop, concentrated in Madhya Pradesh, Rajasthan and Maharashtra, with limited buffer, and shocks tend to show up in spot prices before anyone gets around to updating a forecast.
Cultivation has expanded to meet demand, up roughly 40% since 2022, according to the IndoFolk Wellness data cited above, but expansion takes seasons to translate into stable supply. Total lead time for export orders, including production, testing and documentation, still typically runs 60 to 90 days.
What buyers should do now
Treat plant-part documentation as non-negotiable going forward. A certificate of analysis that does not specify root versus root-and-leaf, backed by HPTLC or HPLC verification, is no longer sufficient given both the regulatory direction and the adulteration data above.
- Expect root-only material to carry a real premium over blended product for the foreseeable future. Price formulations accordingly rather than assuming last year’s cost basis holds.
- Lock in lead times. With 60 to 90 days standard from order to delivered, tested material, pre-booking three to six months ahead of the January-March harvest is the accepted way to secure pricing before the seasonal squeeze sets in.
- Watch export channels, not just domestic sales figures. NutraIngredients’ coverage of NMPB data flagged that leaf tonnage sold domestically does not reconcile with export records, meaning the leaf-material discount may resurface abroad even as it disappears from India’s compliant domestic channel.
- Build flexibility into contracts now. Demand is still accelerating in exactly the root-only, food-and-beverage-adjacent categories this regulation favors. The tightest supply of the year is likely still ahead rather than behind.
For a category that has weathered export restrictions, weather-driven yield losses and now a domestic reclassification of what counts as legitimate material, the lesson holds steady: single-origin botanicals reward buyers who document early, contract early and never treat a certificate of analysis as a formality.