Agri Export
- India’s agricultural exports witnessed a substantial decline of 8.2% in the fiscal year 2023-24, totalling USD 48.82 billion.
- This drop comes after a record-breaking performance of USD 53.15 billion in the previous fiscal year 2022-23.
- Major Agricultural Exports:
- Rice: India is the world’s largest exporter of rice, including basmati and non-basmati varieties. Major markets include the Middle East, Africa, and Southeast Asia.
- Spices: India exports a variety of spices such as pepper, cardamom, turmeric, cumin, and chili. The U.S., Vietnam, and China are major importers.
- Tea and Coffee: India is a significant exporter of tea and coffee, with major markets in Russia, Iran, and the U.S.
- Fruits and Vegetables: Mangoes, bananas, pomegranates, and onions are among the top exported fruits and vegetables. Major destinations include the Middle East and Europe.
- Marine Products: India is a leading exporter of seafood, particularly shrimp, which is primarily exported to the U.S., Japan, and Southeast Asian countries.
- The Union government expects agricultural exports to almost double to around $100 billion by 2030.
- Key Export Markets:
- United States: A major importer of Indian agricultural products, particularly rice, spices, and seafood.
- European Union: Significant market for Indian spices, tea, coffee, and fruits.
- Middle East: Major importer of Indian rice, fruits, and vegetables.
- Southeast Asia: Important market for Indian rice and marine products.
- Challenges:
- Trade Barriers and Tariffs: Many countries impose trade barriers and tariffs on agricultural imports, which can make Indian agricultural products less competitive in the international market. Reducing these barriers is crucial to boosting exports.
- Quality and Safety Standards: Meeting the stringent quality and safety standards of foreign markets can be a challenge for Indian agricultural products. Ensuring compliance with international standards is essential to gaining market access. Eg: Sanitary and Phytosanitary Measures
- Infrastructure and Logistics: Inadequate infrastructure and logistical bottlenecks, including storage, transportation, and cold chain facilities, can result in post-harvest losses and lower product quality.
- Inefficient Supply Chain: The Indian agricultural supply chain is often fragmented and inefficient. Modernising and streamlining the supply chain can improve the quality and timely delivery of products to international markets.
- Pricing and Subsidies: The pricing of agricultural products in India can be influenced by government interventions and subsidies, which can distort market forces. This can impact the competitiveness of Indian exports.
- Climate Change: Climate change and environmental factors can affect crop yields and quality, posing challenges for consistent export supply.
- Market Diversification: India tends to rely heavily on a few key export markets for its agricultural products. Diversifying into new markets can reduce dependency on a limited number of countries.
- Trade Agreements and Negotiations: Engaging in effective trade negotiations and agreements with other countries is crucial for expanding market access for Indian agricultural products.
- Research and Development: Investment in agricultural research and development is essential to improve crop varieties, increase productivity, and enhance the quality of Indian agricultural exports.
- Government Policies and Regulations: Consistency and predictability in government policies and regulations related to agriculture and exports are critical for building trust and long-term partnerships with international buyers.
- Government Initiatives:
- Agri Export Policy 2018: Aims to boost agricultural exports to $60 billion by 2022 by focusing on improving export infrastructure, reducing production costs, and expanding the market base.
- Trade Infrastructure for Export Scheme (TIES): By Ministry of Commerce to assist Central and State Government agencies in creating appropriate infrastructure for the growth of exports.
- Market Access Initiatives (MAI) Scheme: By Ministry of Commerce, it is an Export Promotion Scheme envisaged to act as a catalyst to promote India’s export on a sustained basis.
- Agricultural & Processed Food Products Export Development Authority (APEDA): It is a statutory organisation under administrative control of the Department of Commerce, with a mandate to promote export of agricultural products, including millets, from India.
- State specific Action Plans: prepared by some states and State Level Monitoring Committees (SLMCs), Nodal Agencies for agricultural exports and Cluster Level Committees have been formed in a number of States.
- Farmer Connect Portals by APEDA: It has been set up for providing a platform for farmers, Farmer-Producer Organizations (FPOs) and cooperatives to interact with exporters.
- Transport and Marketing Assistance Scheme: A central sector scheme which aims to provide assistance for the international component of freight and marketing of agricultural produce to mitigate disadvantage of higher cost of transportation.
- Way-forward:
- True Export Competitiveness: Focusing on improving domestic production through productivity growth, product differentiation, value addition, market access, and branding to promote sustainable growth in agricultural exports.
- Bringing more technology: Promote advanced agricultural technologies, precision farming, and efficient irrigation, while supporting agri-startups and innovative solutions to boost productivity and export efficiency.
- The Netherlands has used advances in vertical farming, seed technology and robotics to become a global model. Despite being a small country, it is the second largest exporter of agriculture.
- Focus on Organic & Processed food products: There is also a need to ensure the development of organic or pesticide-free clusters through farmer producer organisations to boost export of organic products to high-income countries.
- Centre’s policy should be in the direction of nurturing food processing companies, ensuring low cost of production and global food quality standards.
- Environmental sustainability: Emphasis on crops like pulses and oilseeds that require less water and fertilisers. Farmers’ interests need to be balanced with environmental sustainability.
- Considering Climatic variations while determining Import Policies: To ensure food security and stabilise market prices.