India’s agricultural exports & imports have grown steadily over the years. The exports have increased nearly 7 times in 15 years and imports by nearly 8 times during the same period. Here is a detailed review.
India is an agrarian economy and is a major contributor to the global food basket, thanks to the favourable agro-climatic conditions and the rich base of natural resources. As per WTO’s Trade Statistics, the share of India’s agricultural exports and imports in the world agriculture trade in 2017 was 2.27% and 1.90%, respectively. India is among the world’s leading producers of many commodities such as dairy, cereals, spices, fruits & vegetables, rice, wheat, cotton, and others. Apart from fulfilling domestic demand, Indian agricultural produce that includes horticultural produce, and processed foods are exported to more than 100 countries in the world including the US, countries in the Middle East, and the EU. Amidst the COVID-19 pandemic, the smooth functioning of the agriculture sector was ensured by issuing relevant guidelines. There was a considerable improvement in the food grain production and the COVID-19 induced movement restrictions worldwide did not affect India’s agri-exports as they did with other commodities. With respect to agri-imports, India majorly imports vegetable oils, fresh fruits, pulses, and spices.
Data pertaining to agriculture exports and imports for this story has been collated from the monitoring dashboard of the department of commerce.
India’s agriculture exports increased by 7 times and imports by 8 times, in 15 years
India has consistently maintained a trade surplus in agricultural commodities over the years. India’s agri-exports increased from Rs. 38,078 crores in 2004-05 to Rs. 2.7 lakh crores in 2018-19, registering an increase of nearly 7 times in the span of 15 years. However, in 2019-20, there was a drop in export by around 8%. Between April 2020 and February 2021 of 2020-21, India’s agri-exports have already crossed the 2019-20 levels, indicating growth in agri-exports for 2020-21 in line with the earlier trends.
Likewise, the import of agricultural products has also increased over the years. In 2004-05, agri-imports were worth Rs.18,924 crores which went up to Rs. 1.68 lakh crores in 2016-17, recording a growth of almost 8 times. However, since 2016-17, the value of imports dropped to reach Rs. 1.42 lakh crores in 2018-19. In 2019-20, India’s agri-imports were worth Rs.1.51 lakh crores and in 2020-21, up to 28 February 2021, the imports were worth Rs.1.44 lakh crores.
India’s Agri-exports has grown in spite of the pandemic
Comparison of exports of agriculture and allied commodities by value during the first 11 months of 2019-20 and 2020-21 shows that the exports during April 2020 and February 2021 were Rs. 2.69 lakh crore as compared to Rs. 2.27 lakh crore during the same period in 2019-20, indicating an increase of 18.4%. Meanwhile, the imports had also increased by 2.38%, from that Rs. 1.4 lakh crores to almost Rs. 1.44 lakh crores during the same period in 2019-20 and 2020-21 respectively. It can be seen that the agriculture exports in the first 11 months of 2019-20 accounted for 91.2% of the overall agriculture exports in 2019-20. Similarly, in the case of imports, these 11 months accounted for 93% of all the imports in 2019-20. If the same trend continues in 2020-21, India’s exports and imports may grow further when data for all the 12-months of 2020-21 is available. Despite the COVID-19 pandemic, the exports in the agriculture sector were not as severely affected as the other sectors.
Export of wheat increased by over 7 times in 2020-21
The main drivers of the increase in exports in 2020-21 are wheat (672% increase), vegetable oil (258%), other cereals (245%), molasses (141%) and non-Basmati rice (132%). Marine products, Basmati Rice, Non- Basmati Rice, Spices, and Buffalo meat were among the top five commodities to be exported, in terms of value, both in 2019-20 and 2020-21. Together, these five products accounted for almost 57% of agriculture exports in the first 11 months of 2019-20 and 54% of the exports during the same period in 2020-21. In rupee terms, Marine products are the most exported with over Rs. 40,140 crores worth exports in 2020-21. However, their exports have dropped by 10.18% in 2020-21, compared to Rs. 44691.44 worth marine exports in 2019-20. The exports of Basmati rice have also slightly dropped by 2% in the first 11 months of 2020-21.
Vegetable oils constitute more than half the import of agriculture products in India
About 54% or more than half the agri-imports by India is of vegetable oils. India’s vegetable oil imports in 2020-21, up to February 2021, are worth Rs. 74,286 crores. Other major agri-imports are fresh fruits, pulses, spices, and cashew. Together, the five products account for 80% of India’s agri-imports.
In the case of other commodities, there is a growth in India’s sugar imports in 2020-21 by 88%. Import of other oil seeds grew by 72%, marine products by 25%, pulses by 19%, and fresh fruits by 11%. However, this increase was neutralized by the drop in imports of raw cotton (72%), Non-Basmati rice (71%), other cereals (69%), spices (24%), oil meals (26%), alcoholic beverages (19%), miscellaneous processed items (18%), and cashew (17%).
Demand for various products has increased
India also exports fresh and processed food to more than 100 countries across the world. The increase in exports has been attributed to the increased demand from other countries. Following specific demand, NAFED exported 50,000 MT wheat to Afghanistan and 40,000 MT wheat to Lebanon under the G2G arrangement. Similarly, the increased export of rice is due to exports to countries such as Timor-Leste, Papua New Guinea, Brazil, Chile, Puerto Rico, Togo, Senegal, Malaysia, Madagascar, Iraq, Bangladesh, Mozambique, Vietnam, Tanzania Republic, and Madagascar. There was also an increase in demand for Pulses, Processed fruits and vegetables, cereals preparations, and other items from the Middle East, Far East, USA, and UK markets.
APEDA supervises agriculture exports in India
Agricultural and Processed Food Products Export Development Authority (APEDA) is responsible for the export promotion and development of listed products including meat products, dairy products, floriculture products, horticulture, medicinal plants, etc. It plays an important role in strengthening India’s export potential along with encouraging better price realization.
Some of the actions taken by APEDA to boost agriculture exports during the pandemic include promotion in virtual buyer-seller meets, formation of products specific export promotion forums, hosting product promotion meetings and webinars regularly for understanding problems, and resolving them, and promotion of GI products, among others. Under the Agriculture and Processed Foods Export Promotion Scheme of APEDA, financial assistance was provided for infrastructure development, Quality Development, and Market Promotion.
India must address certain underlying issues
Agricultural exports are pivotal for helping farmers increase their incomes. Apart from being a source of foreign exchange for the country, the exports help farmers, producers, and exporters to utilize a wider international market and increase their income. Exports have also resulted in increased production in the agriculture sector by increasing area coverage and productivity. Though India aims to double farm exports by 2022, there are some underlying issues, addressing which would help boost India’s exports. Some such issues are reduction of post-harvest loss, availability of necessary infrastructure like cold storage, proper monitoring of fertilizer and pesticides usage, and adoption of the latest farm technology.
Whether India will attain its goal of doubling farm exports remains to be seen as India is witnessing a deadly second wave of COVID-19. The first wave had not affected India’s farm exports as much as other sectors. In fact, the pandemic gave new opportunities to the farm sector. Whether this will continue in 2021-22 remains to be seen.
Featured Image: India’s Agricultural Exports & Imports