India’s agricultural exports grew by 6.5% to USD 37.5 billion (Apr-Dec 2024). Agricultural imports increased by 18.7% to USD 29.3 billion, reducing the trade surplus.
Trends in India’s Agricultural Exports
Shift in Cotton Trade
- India has become a net importer of cotton, reversing its earlier exporter status.
- Cotton exports declined from USD 4.3 billion (2011-12) to USD 1.1 billion (2023-24).
Shrinking Agricultural Trade Surplus
- 2013-14: Surplus peaked at USD 27.7 billion.
- 2023-24: Surplus fell to USD 16 billion.
Major Export Commodities
- Marine Products: Declined in 2023-24, expected to continue falling in 2024-25.
- Sugar & Wheat: Declined due to government restrictions aimed at controlling inflation.
- Rice: Strong exports despite bans on white rice and duties on parboiled rice.
- Basmati rice, spices, coffee, and tobacco set to reach record highs in 2024-25.
- Cash Crops: Exports of coffee and tobacco surged due to climate issues in Brazil, Vietnam, Zimbabwe.
- Spices & Others: India remains the top exporter of chilli, mint products, cumin, turmeric, coriander, fennel, etc.
Major Import Commodities
- Edible Oil: Imports projected to be the highest in 2024-25 due to price hikes from the Russia-Ukraine war.
- Pulses:
- 2018-23: Imports averaged USD 1.7 billion due to increased domestic production.
- 2024-25: Expected to exceed USD 5 billion due to poor 2023-24 pulse production.
Impact of Global Commodity Prices
- 2013-14 to 2019-20: Declining global food prices reduced India’s export competitiveness.
- Post-COVID & Russia-Ukraine War: Surge in prices boosted exports to USD 53.2 billion (2022-23).
Key Trade Destinations
Exports:
- Asia (58% of exports, Global South – 75%)
- China & UAE: USD 3 billion each in imports.
- Vietnam: USD 6 billion in imports.
- Europe (12.6%) – Exports include tobacco, fresh fruits, ornamental plants.
- US (13.4%) – Exports include rice, sesame seeds, fresh fruits.
- Africa (15%) – Significant export destination.
Imports:
- Global South (48%) – Top suppliers: Brazil, China, Mexico, Argentina, Indonesia.
- Developed Economies – Top suppliers: US, Netherlands, Germany.
Challenges in India’s Agricultural Exports
1. Non-Tariff Barriers (NTBs)
- Developed countries impose Sanitary & Phytosanitary (SPS) and Technical Barriers to Trade (TBT).
- Examples:
- Basmati rice & tea exports faced bans in Europe over pesticide contamination.
- Japan banned Indian cut flower imports over zero-tolerance pest policies.
2. Unfair Level Playing Field
- Developed nations provide heavy subsidies to their farmers, while India’s support is much lower.
- US: USD 61,286 per farmer annually.
- India: USD 282 per farmer annually.
- This lowers global prices and hurts Indian farmers’ competitiveness.
3. Challenges to India’s MSP Policy
- Developed nations (US, Canada, Australia) challenge India’s MSP at the WTO.
- Allegation: MSP exceeds the 10% limit (Amber Box) under WTO’s Agreement on Agriculture (AoA).
- India argues that input subsidies should remain uncapped under AoA’s ‘Development Box’.
4. Challenges from Free Trade Agreements (FTAs)
- India’s FTAs (e.g., with ASEAN, Japan, Singapore) lower tariffs on imported agri-products.
- This discourages farmers from adopting new technology and investing in infrastructure, reducing competitiveness.
5. Frequent Export Restrictions
- India often imposes export bans/restrictions to control domestic prices.
- Example: Frequent onion bans disrupt global supply chains, reducing India’s reliability.
Government Initiatives to Boost Agricultural Exports
- Agricultural Export Policy (AEP), 2018 – Aims to double agri-exports.
- APEDA (Agricultural and Processed Food Products Export Development Authority) – Facilitates export promotion.
- PM-FME Scheme – Supports micro food processing enterprises.
- Krishi Udan Yojana 2.0 – Enhances air cargo logistics for agri-exports.
- National Programme for Organic Production (NPOP) – Promotes organic farming and exports.
