India’s Agri Export Regime
Kartavya Desk Staff
Syllabus: Agriculture
Source: DH
Context: India recently signed multiple Free Trade Agreements (FTAs) with the UK, EFTA bloc, and finalized terms for an India–US trade deal.
• However, agriculture remains excluded from these deals, raising concerns over India’s long-term agri-export strategy.
About India’s Agro-Export Regime:
• What It Is? India’s agro-export regime refers to the framework of policies, infrastructure, and institutional mechanisms guiding the export of agricultural commodities.
• India’s agro-export regime refers to the framework of policies, infrastructure, and institutional mechanisms guiding the export of agricultural commodities.
• Current Status:
• Agri-export value fell to $48 billion in 2023–24, from $52 billion in 2022–23. Basmati rice alone contributes to 21% of total agri exports. Institutions like APEDA and ODOP-GI tags support promotion and branding. India has kept agriculture largely out of recent FTAs, including with UK, EFTA, and US, citing sensitivity concerns.
• Agri-export value fell to $48 billion in 2023–24, from $52 billion in 2022–23.
• Basmati rice alone contributes to 21% of total agri exports.
• Institutions like APEDA and ODOP-GI tags support promotion and branding.
• India has kept agriculture largely out of recent FTAs, including with UK, EFTA, and US, citing sensitivity concerns.
• Challenges to India’s Agri-Export Regime: FTA Exclusions: Agriculture is often in the sensitive list or given long transition periods in FTAs due to political and livelihood concerns. Export Rejections: High rejection rates for products like mangoes and peanuts due to pesticide residues and SPS non-compliance. Fragmented Governance: Trade is a Union subject, while agriculture is a state subject, causing frequent policy contradictions and delays. Low Value Addition: Export focus remains on raw commodities instead of processed and branded products, limiting earning potential. Infrastructure Gaps: Lack of cold chains, inland container depots, and export logistics in landlocked states like UP and MP. Investment Distortions: High subsidies on power, water, and fertilizers reduce the incentive to shift toward exportable high-value crops.
• FTA Exclusions: Agriculture is often in the sensitive list or given long transition periods in FTAs due to political and livelihood concerns.
• Export Rejections: High rejection rates for products like mangoes and peanuts due to pesticide residues and SPS non-compliance.
• Fragmented Governance: Trade is a Union subject, while agriculture is a state subject, causing frequent policy contradictions and delays.
• Low Value Addition: Export focus remains on raw commodities instead of processed and branded products, limiting earning potential.
• Infrastructure Gaps: Lack of cold chains, inland container depots, and export logistics in landlocked states like UP and MP.
• Investment Distortions: High subsidies on power, water, and fertilizers reduce the incentive to shift toward exportable high-value crops.
• Way Ahead – Strategic Solutions: Promote Value Addition: Create agro-processing clusters near APMCs, link them with export hubs, and incentivize with output-based schemes. Policy Synchronisation: Form a National Agri Trade Council with representatives from the Centre, States, APEDA, FSSAI, and exporters to align regulatory processes. Switch to Direct Benefit Transfers (DBT): Replace input subsidies with unconditional cash transfers to offer flexibility and encourage crop diversification. Agri-Tech Integration: Scale up AI-driven crop monitoring, vernacular mobile advisories, and real-time data platforms for scheme access and market insights. Digital and Physical Infrastructure: Invest in GIS-based produce mapping, beneficiary tracking systems, and pre-cooling logistics chains in hinterland zones. Improve Connectivity for Landlocked States: Establish inland ports, container depots, and cold storage linkages to empower states like Uttar Pradesh and Madhya Pradesh.
• Promote Value Addition: Create agro-processing clusters near APMCs, link them with export hubs, and incentivize with output-based schemes.
• Policy Synchronisation: Form a National Agri Trade Council with representatives from the Centre, States, APEDA, FSSAI, and exporters to align regulatory processes.
• Switch to Direct Benefit Transfers (DBT): Replace input subsidies with unconditional cash transfers to offer flexibility and encourage crop diversification.
• Agri-Tech Integration: Scale up AI-driven crop monitoring, vernacular mobile advisories, and real-time data platforms for scheme access and market insights.
• Digital and Physical Infrastructure: Invest in GIS-based produce mapping, beneficiary tracking systems, and pre-cooling logistics chains in hinterland zones.
• Improve Connectivity for Landlocked States: Establish inland ports, container depots, and cold storage linkages to empower states like Uttar Pradesh and Madhya Pradesh.
Conclusion:
India’s cautious stance on integrating agriculture with global trade needs a strategic rethink. Protectionism must evolve into smart enablement through technology, value addition, and infrastructure. Making Agri-exports competitive is essential for doubling farmer incomes and achieving trade resilience.
• Account for the failure of manufacturing sector in achieving the goal of labour-intensive exports rather than capital-intensive exports. Suggest measures for more labour-intensive rather than capital-intensive exports. (UPSC-2017)