Why in the news: India’s agricultural exports recently declined nearly 9% to $43.7 billion in the financial year 2023-24 due to various global and domestic challenges. The government has identified 20 agricultural products with significant potential to boost export growth and mitigate the impact of sanctions and global conflicts.

Major products to boost India’s agricultural exports:              

The Government of India has identified a strategic list of 20 agricultural products to focus more on exports. These commodities are selected for their potential in global markets based on demand trends, India’s competitive advantage, and their potential to generate high export revenues.

Fresh Grapes: Known for their quality and sweetness, Indian grapes are in demand in the European and Middle Eastern markets.

Guava: This tropical fruit is gaining popularity for its nutritional value and is mainly exported to the Middle East and Southeast Asia.

Pomegranate: India is one of the largest producers of pomegranate, which is prized in the international market for its health benefits and is exported mainly to Europe and the Middle East.

Watermelon: Another popular summer fruit with substantial export potential, especially to Middle Eastern countries.

Onions: A staple in cuisines around the world, Indian onions are widely exported, with a significant market in the Middle East and Southeast Asia.

Green chillies: Essential in many culinary traditions, Indian green chillies are exported to markets where the Indian and South Asian diaspora live.

Capsicum (bell pepper): Due to high demand due to its use in global cuisine, capsicum is mainly exported to the UAE and other Middle Eastern countries.

ladyfinger: Popular in ethnic markets in Europe and North America, Indian okra has a niche market due to its use in South Asian and African cuisine.

Garlic: Known for its pungent taste and health benefits, Indian garlic is mainly exported to neighboring Asian countries.

Peanuts: India is one of the largest producers of peanuts, which are exported both as raw peanuts and processed products.

Alcoholic beverages: Indian wines and spirits, especially whiskey, are making inroads into international markets, including Europe and North America.

Cashew: India exports processed cashew mainly to the United States, United Arab Emirates and Europe, taking advantage of its established processing industry.

Buffalo Meat: India is one of the top exporters of buffalo meat, which meets the demand in Southeast Asia and the Middle East due to its cost-effectiveness and quality.

Jaggery: A traditional natural sweetener, jaggery is becoming popular in international markets as a healthier alternative to refined sugar.

Natural Honey: Known for its purity, Indian honey is exported across the world, particularly to the United States, Saudi Arabia and the United Arab Emirates, driven by the global trend towards healthier natural sweeteners.

What is Agricultural and Processed Food Products Export Development Authority (APEDA)?         

Establishment: APEDA was established by the Government of India under the Agricultural and Processed Food Products Export Development Authority Act passed by the Parliament in December 1985.

Objective: The authority is tasked with promoting exports of agricultural and processed food products from India.

Functions of APEDA:

• Development of industries related to products scheduled for export by providing financial assistance or otherwise.
• Registration of persons as exporters of scheduled products and laying down standards and specifications for scheduled products for the purpose of export.
• To inspect meat and meat products in slaughterhouses, processing plants, storage premises, vehicles or other places where such products are kept or handled, for the purpose of ensuring the quality of such products.
• Improvement in packaging of scheduled products.
• Improvement in marketing of scheduled products outside India.
• To promote export-oriented production and develop scheduled products.

Coverage: The range of products covered under APEDA includes fruits, vegetables, meat products, dairy products, confectionaries, biscuits and bakery products, honey, jaggery and more.

Top Agricultural Export and Import Products of India

Top Exports:

Basmati Rice – Known globally for its unique aroma and length of stay after cooking, Basmati rice is one of the largest contributors to India’s agricultural exports.

Spices – India is the largest exporter of spices in the world, contributing significantly to the global spice market with products such as turmeric, cumin and chilli.

Buffalo meat – India is one of the largest exporters of buffalo meat, supplying mainly to countries in the Middle East and Southeast Asia.

Seafood –This includes shrimp and fish, which are mainly Exported to the United States, Southeast Asia, the European Union, and Japan.

Cotton – India is one of the top producers and exporters of cotton globally.

Top Imports:

Vegetable oils – primarily palm oil from Malaysia and Indonesia, followed by soybean and sunflower oils from Argentina, Brazil, and Ukraine. Vegetable oil is India’s largest agricultural import due to inadequate domestic production.

Pulses – India is a major importer of pulses, including lentils, chickpeas, and peas, mainly from Canada, Australia, and Myanmar to meet its domestic demand.

Fruits and nuts – especially almonds from the United States, apples from China and the United States, and dates from Middle Eastern countries.

Chemical fertilizers – Large quantities of chemical fertilizers are imported from global markets to support India’s agricultural sector.

Cashew – Although India exports processed cashews, it imports raw cashew mainly from African countries to meet its processing requirements.

These products form the backbone of India’s agricultural trade, with exports aimed at taking advantage of India’s vast agricultural biodiversity and imports aimed at satisfying domestic demand not met by local production.

India’s Agricultural Export Policy

Objective: Launched in 2018, the policy aims to double agricultural exports from the country to $60 billion by 2022 and diversify the export basket, destinations, and promote high-value and value-added agricultural exports.

Focus: The policy emphasizes promoting innovative, indigenous, organic, ethnic, and health-oriented products. It also seeks to simplify processes and develop clusters in different states to handle specific produce effectively.

Infrastructure development: Establishing strong infrastructure for efficient procurement, processing, and storage to reduce post-harvest losses and maintain high quality for export products.

Promotion of organic exports: The policy recognizes the potential of India’s organic products in the global market and aims to streamline their certification and export.

Challenges related to agricultural product export in India

Logistics and supply chain inefficiencies: Poor infrastructure, such as inadequate storage facilities and inefficient transportation, increases spoilage rates, especially for perishable goods.

Quality Standards and Compliance: Meeting the stringent quality standards and certification requirements of export markets is a significant challenge for many Indian exporters.

Regulatory barriers: Complex procedures and red tape in the export process can delay shipments and increase the cost of exporting.

Dependence on traditional markets: Indian agri-exports are highly dependent on a few traditional markets, making them sensitive to changes in demand and regulatory policies in these countries.

Fluctuations in international market prices: Volatility in prices in global markets can affect the profitability of export-oriented farming.

Government initiative to promote agricultural exports

Export Sectors: The government has developed specific sectors for cultivation and processing of particular commodities to increase the quality and quantity of exports.

Subsidies and Assistance: Financial assistance for adopting new technologies, meeting international standards, and improving infrastructure related to agricultural exports.

Trade Agreements: India is actively participating in bilateral and multilateral trade agreements to reduce tariff barriers and increase market access for its agricultural products.

Promotional campaigns: Organizing global trade fairs, exhibitions, and buyer-seller meets to promote Indian agricultural products in the international markets.

Technological Interventions: To encourage the adoption of information technology and better agricultural practices among farmers to increase productivity and exportability.

These points are important in understanding and addressing the various dimensions of agricultural exports in India with the aim of not only promoting economic benefits but also securing a stable and sustainable position in the global agricultural market.

Impact of export bans and restrictions on Indian agricultural commodities

The imposition of export restrictions on major agricultural commodities such as rice, wheat, sugar and onion by the Government of India has had a significant financial impact on the country’s agricultural export sector.

Financial impact:

• Agricultural exports have declined by about $5-6 billion due to sanctions in the last financial year.
• These measures directly affect the income of farmers and exporters who depend on international markets.

Affected items:

Rice: The ban on the export of certain types of rice, including broken rice, and the imposition of 20% export duty on unboiled non-Basmati rice have affected total export volumes.

Wheat: A complete ban on wheat exports was implemented to control domestic prices and ensure national food security, significantly reducing export revenues.

Sugar: Changing the category of sugar exports from “free” to “restricted” and limiting total sugar exports for the year affected global supply chains and revenues.

Onion: Periodic restrictions on onion exports are often used to This is done to stabilize local markets and prevent price fluctuations that impact farmers with surplus produce ready for export.

Reasons for restrictions:

• These measures are generally implemented to stabilize domestic markets and curb price inflation.
• Ensuring food security for the population by maintaining adequate domestic supplies is another important objective, especially in times of drought or other agricultural stress.

Effect:

Market Disruptions: Exporters face reduced market reliability and credibility as international buyers turn to more stable supply sources.

Price volatility: Domestic markets may experience temporary relief in terms of stable prices, but farmers’ incomes have declined due to fewer export opportunities.

Impact on supply chain: Sanctions disrupt the supply chain, affecting related industries such as transportation and logistics.

What should be the way forward:     

Strategies to strengthen Indian agricultural exports

India currently has a share of about 2.5% in global exports, and the Government of India aims to increase this to about 4-5% in the coming years. Here are some important points that can help in understanding this objective:

Strategic Promotion:

The government is adopting strategies focused on specific agricultural products that have high demand in global markets.

This includes fruits, vegetables, spices, and other specialty products such as organic products and unique Indian agricultural commodities.

Challenges overcome:

The decline in exports has led to significant challenges such as logistics problems, meeting quality standards, and competition in international markets.

To meet these challenges, improvements in quality control, better packaging and market research are needed.

Government Initiatives:

Various initiatives have been taken through APEDA and other government agencies such as export promotion programs, organizing exhibitions and fairs in foreign markets, and opening up new markets through trade agreements.

In addition, technical assistance and financial assistance is provided to farmers and exporters so that they can produce at par with global standards.

These steps will not only help in increasing India’s agricultural exports but will also contribute to strengthening India’s position in the global food market.

India’s agricultural exports                                     

Why in the news: India’s agricultural exports recently declined nearly 9% to $43.7 billion in the financial year 2023-24 due to various global and domestic challenges. The government has identified 20 agricultural products with significant potential to boost export growth and mitigate the impact of sanctions and global conflicts.

Major products to boost India’s agricultural exports:              

The Government of India has identified a strategic list of 20 agricultural products to focus more on exports. These commodities are selected for their potential in global markets based on demand trends, India’s competitive advantage, and their potential to generate high export revenues.

Fresh Grapes: Known for their quality and sweetness, Indian grapes are in demand in the European and Middle Eastern markets.

Guava: This tropical fruit is gaining popularity for its nutritional value and is mainly exported to the Middle East and Southeast Asia.

Pomegranate: India is one of the largest producers of pomegranate, which is prized in the international market for its health benefits and is exported mainly to Europe and the Middle East.

Watermelon: Another popular summer fruit with substantial export potential, especially to Middle Eastern countries.

Onions: A staple in cuisines around the world, Indian onions are widely exported, with a significant market in the Middle East and Southeast Asia.

Green chilies: Essential in many culinary traditions, Indian green chilies are exported to markets where the Indian and South Asian diaspora live.

Capsicum (bell pepper): Due to high demand due to its use in global cuisine, capsicum is mainly exported to the UAE and other Middle Eastern countries.

ladyfinger: Popular in ethnic markets in Europe and North America, Indian okra has a niche market due to its use in South Asian and African cuisine.

Garlic: Known for its pungent taste and health benefits, Indian garlic is mainly exported to neighboring Asian countries.

Peanuts: India is one of the largest producers of peanuts, which are exported both as raw peanuts and processed products.

Alcoholic beverages: Indian wines and spirits, especially whiskey, are making inroads into international markets, including Europe and North America.

Cashew: India exports processed cashews mainly to the United States, United Arab Emirates, and Europe, taking advantage of its established processing industry.

Buffalo Meat: India is one of the top exporters of buffalo meat, which meets the demand in Southeast Asia and the Middle East due to its cost-effectiveness and quality.

Jaggery: A traditional natural sweetener, jaggery is becoming popular in international markets as a healthier alternative to refined sugar.

Natural Honey: Known for its purity, Indian honey is exported across the world, particularly to the United States, Saudi Arabia, and the United Arab Emirates, driven by the global trend towards healthier natural sweeteners.

What is the Agricultural and Processed Food Products Export Development Authority (APEDA)?         

Establishment: APEDA was established by the Government of India under the Agricultural and Processed Food Products Export Development Authority Act passed by the Parliament in December 1985.

Objective: The authority is tasked with promoting exports of agricultural and processed food products from India.

Functions of APEDA:

• Development of industries related to products scheduled for export by providing financial assistance or otherwise.
• Registration of persons as exporters of scheduled products and laying down standards and specifications for scheduled products for the purpose of export.
• To inspect meat and meat products in slaughterhouses, processing plants, storage premises, vehicles, or other places where such products are kept or handled, for the purpose of ensuring the quality of such products.
• Improvement in the packaging of scheduled products.
• Improvement in the marketing of scheduled products outside India.
• To promote export-oriented production and develop scheduled products.

Coverage: The range of products covered under APEDA includes fruits, vegetables, meat products, dairy products, confectionaries, biscuits and bakery products, honey, jaggery and more.

Top Agricultural Export and Import Products of India

Top Exports:

Basmati Rice – Known globally for its unique aroma and length of stay after cooking, Basmati rice is one of the largest contributors to India’s agricultural exports.

Spices – India is the largest exporter of spices in the world, contributing significantly to the global spice market with products such as turmeric, cumin, and chili.

Buffalo meat – India is one of the largest exporters of buffalo meat, supplying mainly to countries in the Middle East and Southeast Asia.

Seafood – This includes shrimp and fish, which are mainly Exports are made to the United States, Southeast Asia, the European Union, and Japan.

Cotton – India is one of the top producers and exporters of cotton globally.

Top Imports:

Vegetable oils – primarily palm oil from Malaysia and Indonesia, followed by soybean and sunflower oils from Argentina, Brazil, and Ukraine. Vegetable oil is India’s largest agricultural import due to inadequate domestic production.

Pulses – India is a major importer of pulses, including lentils, chickpeas and peas, mainly from Canada, Australia, and Myanmar to meet its domestic demand.

Fruits and nuts – especially almonds from the United States, apples from China and the United States, and dates from Middle Eastern countries.

Chemical fertilizers – Large quantities of chemical fertilizers are imported from global markets to support India’s agricultural sector.

Cashew – Although India exports processed cashew, it imports raw cashew mainly from African countries to meet its processing requirements.

These products form the backbone of India’s agricultural trade, with exports aimed at taking advantage of India’s vast agricultural biodiversity and imports aimed at satisfying domestic demand not met by local production.

India’s Agricultural Export Policy

Objective: Launched in 2018, the policy aims to double agricultural exports from the country to $60 billion by 2022 and diversify the export basket, destinations, and promote high value and value-added agricultural exports.

Focus: The policy emphasizes on promoting innovative, indigenous, organic, ethnic and health-oriented products. It also seeks to simplify processes and develop clusters in different states to handle specific produce effectively.

Infrastructure development: Establishing strong infrastructure for efficient procurement, processing and storage to reduce post-harvest losses and maintain high quality for export products.

Promotion of organic exports: The policy recognizes the potential of India’s organic products in the global market and aims to streamline their certification and export.

Challenges related to agricultural product export in India

Logistics and supply chain inefficiencies: Poor infrastructure, such as inadequate storage facilities and inefficient transportation, increases spoilage rates, especially for perishable goods.

Quality Standards and Compliance: Meeting the stringent quality standards and certification requirements of export markets is a significant challenge for many Indian exporters.

Regulatory barriers: Complex procedures and red tape in the export process can delay shipments and increase the cost of exporting.

Dependence on traditional markets: Indian agri-exports are highly dependent on a few traditional markets, making them sensitive to changes in demand and regulatory policies in these countries.

Fluctuations in international market prices: Volatility in prices in global markets can affect the profitability of export-oriented farming.

Government initiative to promote agricultural exports

Export Sectors: The government has developed specific sectors for cultivation and processing of particular commodities to increase the quality and quantity of exports.

Subsidies and Assistance: Financial assistance for adopting new technologies, meeting international standards and improving infrastructure related to agricultural exports.

Trade Agreements: India is actively participating in bilateral and multilateral trade agreements to reduce tariff barriers and increase market access for its agricultural products.

Promotional campaigns: Organizing global trade fairs, exhibitions and buyer-seller meets to promote Indian agricultural products in the international markets.

Technological Interventions: To encourage adoption of information technology and better agricultural practices among farmers to increase productivity and exportability.

These points are important in understanding and addressing the various dimensions of agricultural exports in India with the aim of not only promoting economic benefits but also securing a stable and sustainable position in the global agricultural market.

Impact of export bans and restrictions on Indian agricultural commodities

The imposition of export restrictions on major agricultural commodities such as rice, wheat, sugar, and onion by the Government of India has had a significant financial impact on the country’s agricultural export sector.

Financial impact:

• Agricultural exports have declined by about $5-6 billion due to sanctions in the last financial year.
• These measures directly affect the income of farmers and exporters who depend on international markets.

Affected items:

Rice: The ban on export of certain types of rice, including broken rice, and the imposition of a 20% export duty on unboiled non-Basmati rice have affected total export volumes.

Wheat: A complete ban on wheat exports was implemented to control domestic prices and ensure national food security, significantly reducing export revenues.

Sugar: Changing the category of sugar exports from “free” to “restricted” and limiting total sugar exports for the year affected global supply chains and revenues.

Onion: Periodic restrictions on onion exports are often used to This is done to stabilize local markets and prevent price fluctuations that impact farmers with surplus produce ready for export.

Reasons for restrictions:

• These measures are generally implemented to stabilize domestic markets and curb price inflation.
• Ensuring food security for the population by maintaining adequate domestic supplies is another important objective, especially in times of drought or other agricultural stress.

Effect:

Market Disruptions: Exporters face reduced market reliability and credibility as international buyers turn to more stable supply sources.

Price volatility: Domestic markets may experience temporary relief in terms of stable prices, but farmers’ incomes have declined due to fewer export opportunities.

Impact on supply chain: Sanctions disrupt the supply chain, affecting related industries such as transportation and logistics.

What should be the way forward:     

Strategies to strengthen Indian agricultural exports

India currently has a share of about 2.5% in global exports, and the Government of India aims to increase this to about 4-5% in the coming years. Here are some important points that can help in understanding this objective:

Strategic Promotion:

The government is adopting strategies focused on specific agricultural products that have high demand in global markets.

This includes fruits, vegetables, spices, and other specialty products such as organic products and unique Indian agricultural commodities.

Challenges overcome:

The decline in exports has led to significant challenges such as logistics problems, meeting quality standards, and competition in international markets.

To meet these challenges, improvements in quality control, better packaging and market research are needed.

Government Initiatives:

Various initiatives have been taken through APEDA and other government agencies such as export promotion programmes, organizing exhibitions and fairs in foreign markets, and opening up new markets through trade agreements.

In addition, technical assistance and financial assistance is provided to farmers and exporters so that they can produce at par with global standards.

These steps will not only help in increasing India’s agricultural exports but will also contribute to strengthening India’s position in the global food market.