India stands at a pivotal juncture in agricultural trade. To unlock the immense potential of its exports, it should no longer contemplate opening up to international trade, but how and when to do so without risking the sector’s domestic sensitivities.
Up till now, India has maintained a conservative stance regarding the openness of its agriculture sector, driven by legitimate concerns about food security and negative externalities faced by smallholder farmers from global turmoil. This has inadvertently limited India’s global agricultural footprint despite being a top producer of major agricultural commodities. For instance, India is the largest producer of milk, but its share in processed dairy exports like condensed milk, flavoured milk containing fruits or nuts, whey, butter and other dairy spreads, cheese, and curd is less than 0.05 per cent.
Furthermore, India has the world’s largest population of cattle and livestock, yet its share in meat exports was a meagre 0.74 per cent as of April 2024, and growth has decelerated by eight per cent since last year. Similarly, even though India has a coastline of approximately 6000 kilometres, its fisheries and marine exports capture a share of a little over one per cent of India’s export basket and growth has decelerated by about 12 per cent since April 2023. Similarly, even though cereals constitute 2.8 per cent of India’s exports, growth has decelerated by 8.5 per cent over the past year. There thus exists a paradox of plenty at the intersection of Indian agriculture and foreign trade as the country experiences high production but modest exports. This reiterates that India possesses an untapped potential for agricultural exports. A focussed strategy built around five essential pillars must be prioritised to boost India’s agricultural exports, not just in terms of quantity but also quality.
At the farm level, high-value production should be emphasised. Although a subsidised provision of water, electricity, seeds, fertilisers, and assured minimum support price for primary crops in the country provides a safety net for the farmers, it discourages the scope for innovation. Farmers remain locked in traditional crops like rice, spices, and tea, and do not experiment with high-value produce such as organic products, processed foods, nutraceuticals, and ethnic ready-to-eat foods, export demand for which is picking up. The government of India has already rolled out a few policies in support of enhancing the quality and quantity of agricultural exports from India, such as the Agricultural Export Policy (AEP), 2018. Such initiatives should be supplemented with improvements in agricultural education focussing on global trends, trade rules, and standards to remove export constraints. Thus, it is imperative to reboot the National Agricultural Research, Extension and Education System at this juncture.
One of the key reasons for the paradox of plenty is also the fact that Indian agriculture faces huge crop losses due to undetected pest infestation and over-fertilisation, often attributed to misinformation. If these issues are addressed, Indian agriculture would function on better crop timing, resilience to climate shocks, reduced wastage, and improved export readiness. Thus, India needs farmer-centric technology that facilitates weather advisory and early disease detection. These technologies must be mobile-first, vernacular, and integrated into existing extension networks for better adoption. Likewise, agri-tech can improve farmer-beneficiary tracking, transparent scheme disbursement, and GIS mapping of production clusters. This can further facilitate better governance enabled by data-driven decisions regarding the location of pre-cooling and processing units and logistical routes, and reduce leakages of scheme disbursements, improve farmer trust, and strengthen the data ecosystem for better policymaking and trade negotiations.
Looking beyond the farm, India must invest in improving its agro-processing capabilities and logistics, especially in high-production areas. India's agriculture sector has been stuck in a vicious cycle of exporting primary agricultural produce and a lack of agro-processing facilities, thereby limiting its export revenue. Shifting focus to higher-valued processed agricultural products can offer some respite and improve the country's revenues from agricultural exports, facilitated by the adequate availability and accessibility of supporting infrastructure. The Pradhan Mantri Kisan Sampada Yojana aims to support the establishment of cold storage facilities, processing units, and modern packaging facilities to meet international standards. Specifically, a network of agro-processing facilities can be established near the Agriculture Produce Marketing Committees (APMCs), facilitated by export aggregators to modernise the supply chain of perishables. Moreover, it is observed that the coastal states of Gujarat, Maharashtra, Tamil Nadu, and Karnataka are major exporters of Indian agricultural products, whereas states such as Uttar Pradesh and Madhya Pradesh are the top producers, especially of cereals, dairy, and sugarcane. This can be attributed to the inadequate logistical support in high-production landlocked areas of the country. Although initiatives like the Krishi Udan Scheme, under the Ministry of Civil Aviation, have enabled quicker and cost-effective air transport of perishables, inland container depots, cold storage networks, and seamless linkages to the nearest export-ready ports can help minimise this disparity further.
India’s federal structure offers a unique opportunity for agricultural trade. The states’ stewardship of agriculture and the Centre’s headship in trade and commerce can collaborate for policymaking and harmonised growth. The Centre, states, APEDA, FSSAI, and industry stakeholders, including exporters, farmer producer organisations, and agri-tech companies can come together to form a national council for agricultural trade, for synchronised policy rollouts. Clear communication protocols, single-window export clearances, and digital compliance dashboards can reduce internal friction and ensure better compliance with global standards like the Good Agriculture Practices (GAP). India is no longer at the stage of just increasing its exports; instead, it is at the cusp of exporting better, reflecting both ambition and foresight, to further strengthen its agro-export ecosystem and write the next chapter of its agricultural trade story.
Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the publication. |
