6-March -2025-Special-Article

INDIA’S AGRICULTURAL EXPORTS

India’s agricultural exports have witnessed steady growth, reaching USD 37.5 billion from April to December 2024. However, imports have also surged by 18.7% to USD 29.3 billion, narrowing the agricultural trade surplus. This trend highlights the need to boost agricultural exports while addressing challenges in the global market.

Trends in India’s Agricultural Exports

Shift in Cotton Trade

• India, once a major cotton exporter, has now become a net importer.
• Cotton exports dropped from USD 4.3 billion in 2011-12 to just USD 1.1 billion in 2023-24.

Declining Agricultural Trade Surplus

• India’s peak agricultural trade surplus was USD 27.7 billion in 2013-14.
• By 2023-24, this surplus reduced to USD 16 billion.

Impact of Global Commodity Prices

• Between 2013-14 and 2019-20, falling global food prices weakened India’s export competitiveness.
• Post-pandemic and Russia-Ukraine war led to a price surge, increasing agricultural exports to USD 53.2 billion in 2022-23.

Major Export Commodities

• Marine Products: Leading agri-export sector, but saw a decline in 2023-24.
• Sugar & Wheat: Exports reduced due to government restrictions to control food inflation.
• Rice: Despite a ban on white rice and export duty on parboiled rice, India retained a strong position in the global market.
• Cash Crops: Increased exports of coffee and tobacco due to production issues in Brazil, Vietnam, and Zimbabwe.
• Spices & Others: India leads in exports of chilli, cumin, turmeric, coriander, fennel, and mint-based products.

Major Import Commodities

• Edible Oils: Imports are projected to rise due to high global prices and dependency on foreign sources.
• Pulses: Imports may surpass USD 5 billion in 2024-25 due to lower domestic production.

Key Export and Import Destinations

Exports:

• Asia: 58% of India’s exports; major markets include China, UAE, and Vietnam.
• Africa: Accounts for 15% of Indian agricultural exports.
• US & Europe: US (13.4%) and Europe (12.6%) import rice, sesame seeds, tobacco, and fresh fruits.

Imports:

• Global South: 48% of India’s agri-imports come from Brazil, China, Mexico, Argentina, and Indonesia.
• Developed Nations: Major suppliers include the US, the Netherlands, and Germany.

Challenges in India’s Agricultural Exports

Non-Tariff Barriers (NTBs)

• Developed countries impose strict food safety regulations, affecting exports.
• Example: European bans on basmati rice and tea due to pesticide contamination.
• Japan has banned Indian cut flowers due to pest-related concerns.

Unfair Global Competition

• Developed nations provide large subsidies to their farmers, making Indian products less competitive.
• Example: The US gives USD 61,286 per farmer annually, while India provides only USD 282.

Issues with MSP Policy

• Countries like the US, Canada, and Australia challenge India’s Minimum Support Price (MSP) system at WTO.
• MSP is accused of exceeding the 10% subsidy limit under WTO’s Agreement on Agriculture.

Challenges from Free Trade Agreements (FTAs)

• FTAs with ASEAN, Japan, and Singapore allow duty-free imports of agricultural products, making it harder for Indian farmers to compete.
• This discourages investment in modern farming technologies.

Frequent Export Restrictions

• Export bans on onions and other commodities disrupt India’s reliability in global markets.
• Foreign importers look for alternative suppliers, impacting India’s long-term trade relationships.

Government Initiatives to Boost Agricultural Exports

• Agricultural Export Policy (AEP), 2018: Aims to double agricultural exports by 2025 by removing trade barriers and promoting value addition.
• Agricultural and Processed Food Products Export Development Authority (APEDA): APEDA supports exporters by providing financial assistance, research, and quality control measures.
• PM Formalisation of Micro Food Processing Enterprises (PM-FME) Scheme: Provides financial and technical support to small and medium food processors to enhance their competitiveness.
• Krishi Udan Yojana 2.0: Improves transportation of perishable goods like fruits, vegetables, and dairy products to boost exports.
• National Programme for Organic Production (NPOP): Encourages organic farming and certification to improve the global competitiveness of Indian organic products.

Way Forward

Market Intelligence for Exporters

• Establish dedicated market intelligence units to track global demand and help farmers align production with export opportunities.

Support Agri-Tech Startups

• Encourage agricultural startups to develop innovative solutions for increasing productivity and efficiency.

Diversifying Export Markets

• India should expand exports of dairy, poultry, vegetables, and fruits to new markets in Africa, Southeast Asia, and the Middle East.
• Capitalize on the rising global demand for superfoods like millets and herbal products.

Strengthen Compliance with Food Safety Standards

• Educate farmers and supply chain participants on sanitary and phytosanitary (SPS) regulations.
• Develop better processing infrastructure to meet international food safety standards.

Develop Agro-Climatic Clusters

• Identify regions best suited for specific export crops to improve productivity and quality.
• Use precision farming technologies like Microsoft’s Project Farm Vibes to enhance yields while conserving resources.

Consistent Trade Policy

• Minimize sudden export restrictions to maintain India’s credibility in global markets.
• Balance domestic price stability with long-term trade commitments.

Conclusion

India’s agricultural exports have grown, but challenges like declining trade surplus, non-tariff barriers, and unfair global competition must be addressed. With the right policies, technological advancements, and global market diversification, India can strengthen its position as a leading agricultural exporter while ensuring food security and farmer prosperity.

Mains Question:

1. Discuss the trends in India’s agricultural exports and imports, highlighting the key challenges faced and suggesting measures to enhance the competitiveness of Indian agricultural products in the global market. (150 WORDS).