April , 2024
India’s Status as an Exporter of Agricultural Products
11:48 am

Kishore Kumar Biswas

India has emerged as a significant exporter of agricultural products, with a rich history dating back to early times when it was renowned for its spices globally. Currently, key exports include rice (both basmati and non-basmati), spices, cotton, oilseed cakes, castor oil, coffee, cashews, tea (classified as an industrial export), fresh vegetables, and sugar. Rice stands out as India’s largest agricultural export, contributing over 19% to the total in the fiscal year 2021-22. In fact, India holds the title of the world’s largest cereal exporter, with major cereals including wheat, paddy, sorghum, millet, barley, and maize.

According to data from the WTO’s Trade Statistical Review of 2022, India accounted for 2.4% of global agricultural exports and 1.7% of imports in 2021, placing it in the top 10 global agricultural exporters. Agricultural exports comprised 11.90% of India’s total merchandise exports in 2021-22, totaling Rs.3,74,611 crore. These goods are primarily exported to various Asian countries, as well as the USA, UK, and Netherlands.

Import of Agricultural Products

India also imports a considerable quantity of agricultural products, with vegetable oil being the largest import item, constituting approximately 72.34% of total consumption in India. Other significant imports include pulses (39% of consumption), fresh fruits (16.35%), spices (20%), natural rubber (66.73%), and oilseeds (364.33%). India imports 150% of its domestic requirements, with the surplus often exported to other countries.

Trade Agreements Boosting Agricultural Exports

India has engaged in numerous trade agreements aimed at promoting agricultural exports, including Free Trade Agreements (FTAs) and Comprehensive Economic Cooperation and Partnership Agreements. Additionally, agreements with regional trading blocs such as SAFTA, APTA, ASEAN, and MERCOSUR have facilitated exports by providing preferential duties with trading partners.

Diversification Needed to Mitigate Vulnerability to Price Fluctuations

Despite its success, India’s reliance on just five agricultural products for 51.5% of its total exports leaves the sector vulnerable to global price fluctuations and demand changes. Recent bans on non-basmati rice export highlight the risks associated with such dependency. While some suggest India withdraw from WTO agreements to protect farmers’ interests, integration with the global economy remains crucial.

Challenges and Opportunities

India’s agricultural sector faces significant challenges, including insufficient infra-structure such as cold chain facilities and logistics, hindering export competitiveness and contributing to food and non-food product spoilage. According to the United Nations Environment Programme (UNEP), Indian households waste 68.7 million tonnes of food annually, highlighting the urgent need for infrastructure development.

Moving Forward

Addressing these challenges requires substantial investment in infrastructure to support a vibrant agricultural sector Organizations like the Food Safety and Standard Authority of India (FSSAI) play a vital role in monitoring and addressing food wastage issues. Building robust infra-structure is essential for India to sustain its growth trajectory and ensure food security for its population.

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