Agricultural Trade

Policies
An overview of Indian Agricultural export policies
Introduction

 India is one of the leading producers of milk, fruits, vegetables, sugar,

spices, seafood, eggs and flowers.
 50% of the people are engaged in agriculture, thus making it significant
for the economy. It plays a crucial role in sustaining livelihood, despite
the limited land and water resources.
 It plays a major role in boosting economic growth and forex earnings.
Objectives of the trade policy

 Double agricultural exports from $30 billion to over $60 billion by 2022
and reach $100 billion in the next few years thereafter.
 Diversify our export basket, destinations and boost high value and value
added agri exports including focus on perishables.
 Farmers to get the benefit of export opportunities in overseas market.
 Promote ethnic, organic, traditional and non-agricultural product
exports.
 Establish monitoring framework to oversee implementation of
agricultural export policy.
 Double India’s agri exports by integrating with global value chain at the
earliest.
Need for a structured export policy

 Tackles export challenges & grabs opportunities.

 Boosts farmer income
 Easier access to global markets
 Provides roadmap for exporters and farmers, clearing uncertainty.
 Reduced Post-Harvest Losses
Economic impact of exports

 Agricultural exports constitute a substantial portion of India's total exports.

 According to PIB, there was a significant growth in agricultural exports for FY
2023, reaching $53.1 billion.
 Agricultural exports play a crucial role in boosting farmer incomes by
providing additional revenue streams.
 Increased export earnings can be reinvested in enhancing food security
measures and agricultural productivity.
 Stable agricultural exports can contribute to price stability in domestic
markets, benefiting both producers and consumers.
Challenges
 Policies favouring domestic consumers over farmers can hinder export
opportunities.
Ex: MEP regulations affecting basmati rice exports.

 Low investment in agricultural Research & Development (R&D) limits

innovation and growth.
Doubling or tripling R&D investment is necessary for significant agricultural
productivity gains

 Inconsistent quality and compliance with international standards pose

challenges.
Meeting Sanitary and Phytosanitary (SPS) measures of importing countries can be
difficult.
Challenges
 Inadequate infrastructure for storage, transportation, and processing
increases post-harvest losses.
Poor infrastructure reduces competitiveness in agricultural exports.

 India faces competition from other countries in global agricultural markets.

Exchange rate fluctuations can impact competitiveness in pricing and quality.

 Balancing increased agri exports with environmental sustainability is crucial.

Over-exploitation of resources can have long-term consequences on
sustainability.

 Populist measures like food and fertilizer subsidies may distort agricultural
markets.
Such schemes can impact fiscal discipline and agricultural sector finances.
Strategic recommendations
• Trade Policy: Implement policies to make exports easier, adjust tariffs, and offer programs to
promote exports.
• Infrastructure: Improve transportation, ports, and storage facilities for smoother export
movement.
• Holistic Approach: Address all aspects of the agricultural export chain, from production to
marketing.
• State Collaboration: Work with state governments to leverage resources for export
promotion.
• Export Clusters: Support focused groups of producers for better efficiency and
competitiveness.
• Value Addition: Encourage processing and export of high-value agricultural products.
• Brand India: Build a strong international reputation for Indian agricultural products.
• Private Investment: Attract private companies to invest in production and processing
facilities.
• Quality Control: Implement strict quality checks to meet international standards.
• R&D Investment: Invest in research to improve productivity, quality, and develop new export
products.
• Tackle Challenges: Address regulatory issues and market access barriers that hinder exports.
Agricultural trade reforms

 Agricultural Marketing Reforms:

Introduction of laws like the Agricultural Produce Market Committee (APMC) Act to
liberalize agricultural markets.
 Electronic National Agriculture Market (e-NAM):
Implementation of an online trading portal to integrate agricultural markets across
different states, promoting transparency and better price discovery.
 Contract Farming Laws:
Enactment of laws facilitating agreements between farmers and private agribusinesses
for production and sale of agricultural commodities, providing farmers with assured
markets and access to technology.
 Export Policy Reforms:
Introducing measures to liberalize and streamline export procedures for agricultural
commodities, reducing trade barriers and promoting value-added exports.
 Reforms
 Infrastructure Development:
Investment in agricultural infrastructure including cold chains, warehouses, processing
facilities, and transportation networks to improve post-harvest management and product
quality.
 Trade Facilitation:
Simplification of export-import procedures, reduction of paperwork, and implementation of
online clearance systems to facilitate agricultural trade and reduce the costs.
 Market Intelligence and Information Systems:
Providing farmers with access to market information, prices, weather forecasts, and
agricultural best practices through digital platforms and mobile applications.
 Quality Standards and Certification:
Strengthening quality control measures and compliance with international standards to
enhance India's credibility in global markets and facilitate exports.
 Promotion of Agri-Exports:
Government schemes, incentives, and market development programs aimed at expanding
market access, promoting brand India, and diversifying export destinations for agricultural
products.
Trade and agreements
 Imports and exports
India has a share of 2.4% in global agricultural exports.
In 2021-22, exports surged by 20.79% along with a significant increase in
imports by 50.56%.
In 2022-23, exports decreased by 7.53% to $ 66.14 billion and imports
decreased by 7.98% to $72.18 billion.
 Trade agreements
India has signed trade agreements with various regional trading blocs and
countries, offering preferential duties for exports to partner countries.
These agreements include FTAs, PTAs, CECAs, and CEPAs.
Examples of such agreements include SAFTA, APTA, ASEAN, and BIMSTEC.
These agreements provide Indian exporters with a competitive advantage
in these markets.
India’s role in WTO & Export
promotion
 India actively participates in the WTO by attending meetings,
submitting reports, and undergoing reviews to ensure its
agricultural trade policies comply with WTO regulations. This
ensures a fair and transparent trading environment for Indian
agricultural exports.
 India actively gathers market intelligence through Agri-Cells
abroad and promotes specific agricultural exports through
targeted forums, supporting exporters in navigating
international markets. This helps Indian agricultural products reach
new markets and compete effectively.
Challenges and opportunities
• Risks associated with the heavy reliance on a few key agricultural commodities like
rice, sugar and spices, including vulnerability to fluctuations in global prices and
demand impact export revenue.
• Projection of a decline in agricultural exports for 2023, influenced by factors like
global price fluctuations, policy constraints such as export bans, and disputes at the
WTO exist.
• There is a potential to enhance export competitiveness through investments in
infrastructure development, including storage, transportation, and processing
facilities.
• Improving quality control measures to meet international standards, addressing
issues related to consistency and compliance are important.
• Exploration of opportunities beyond key commodities, such as value-added products,
niche markets, and emerging agricultural sectors like organic produce or specialty
crops.
• Benefits of diversification, including reducing dependence on a limited range of
commodities and increasing resilience to market fluctuations.
Conclusion

India's agricultural trade is at a critical point, with both challenges and

opportunities. While India is a major farm producer, it faces issues like
relying too much on certain crops, declining exports in some areas, and
infrastructure problems. But strategic reforms, such as adjusting policies,
improving infrastructure, and boosting quality control, can help overcome
these hurdles. By effectively implementing these reforms and creating a
supportive environment for farm trade, India can gain significant economic
and farmer benefits. If India takes a forward-looking approach and works
hard, it can become a powerful player in global agricultural trade, driving
sustainable growth for years to come.