Export and Import of Agricultural Products

The export and import of agricultural products play a vital role in the global economy, influencing food security, trade balances, and rural development. For a country like India, where agriculture remains the backbone of the economy, international trade in agricultural commodities significantly impacts farmers’ income, national revenue, and the overall growth of the agrarian sector. Agricultural trade not only facilitates the exchange of surplus produce but also allows access to products that cannot be cultivated domestically due to climatic or resource constraints.

Importance of Agricultural Trade

Agricultural trade serves multiple purposes at both national and global levels:

• Economic Growth: Export earnings from agricultural products contribute to foreign exchange reserves and national income.
• Employment: Agriculture-related exports and imports create employment across the value chain — from production and processing to logistics and marketing.
• Diversification: Trade encourages farmers to diversify crops, adopt modern technologies, and enhance productivity to meet international standards.
• Food Security: Imports ensure the availability of essential food items during domestic shortages caused by poor harvests or natural calamities.
• Global Integration: Participation in international markets connects local farmers with global consumers and promotes competitiveness.

Major Agricultural Exports

India is one of the world’s leading exporters of agricultural commodities. Its diverse agro-climatic zones enable the cultivation of a wide range of products. The Agricultural and Processed Food Products Export Development Authority (APEDA) and the Commodity Boards under the Ministry of Commerce and Industry oversee and promote agricultural exports.
Key agricultural exports from India include:

• Cereals:
  • Rice (Basmati and non-Basmati) — India is the largest rice exporter globally.
  • Wheat — exported mainly to neighbouring countries and the Middle East.
• Spices:
  • India leads the world in spice exports, including black pepper, cardamom, turmeric, cumin, and chilli.
  • The Indian Spices Board promotes quality control and export certification.
• Tea and Coffee:
  • Assam, Darjeeling, and Nilgiri teas are globally renowned.
  • Indian coffee, especially Arabica and Robusta varieties, has a strong international presence, particularly in Europe and the Middle East.
• Marine Products:
  • Fish, shrimp, and other seafood are major foreign exchange earners.
  • Marine exports are promoted by the Marine Products Export Development Authority (MPEDA).
• Fruits and Vegetables:
  • Mangoes, grapes, bananas, pomegranates, and onions are among the major horticultural exports.
  • India’s diverse fruit varieties have strong demand in West Asia and South-East Asia.
• Oilseeds and Pulses:
  • Exports include groundnuts, castor seeds, and sesame seeds.
  • Processed pulse products are exported to regions with significant Indian diaspora populations.
• Processed Foods and Beverages:
  • Ready-to-eat foods, fruit juices, pickles, and confectioneries have shown steady export growth, reflecting India’s growing food processing industry.

India’s main export destinations for agricultural products include the United States, the United Arab Emirates, Saudi Arabia, Iran, Bangladesh, Vietnam, and China.

Major Agricultural Imports

While India is a major exporter of agricultural goods, it also imports certain products to meet domestic demand and maintain price stability. The main agricultural imports include:

• Edible Oils:
  • Palm oil, soybean oil, and sunflower oil are imported in large quantities, mainly from Indonesia, Malaysia, Argentina, and Ukraine.
  • Edible oil imports account for one of the largest shares in India’s agricultural import bill.
• Pulses:
  • To meet domestic shortages, pulses such as lentils, chickpeas, and peas are imported from Canada, Australia, Myanmar, and Russia.
• Fruits and Nuts:
  • Apples, almonds, walnuts, and cashews are imported mainly from the United States, Iran, and Afghanistan.
• Spices and Beverages:
  • Certain varieties of cocoa, coffee, and pepper are imported for domestic processing and value addition.
• Cereals and Feed Ingredients:
  • Occasionally, imports of wheat or maize occur during years of low domestic production or rising prices.
  • Animal feed ingredients such as soya meal and fishmeal are also imported when required.
• Fertilizers and Agricultural Inputs:
  • Though not food items, the import of fertilizers like urea, potash, and phosphates plays an indirect but vital role in agricultural productivity.

Government Policies and Regulatory Framework

Agricultural trade in India operates within the framework of government policies designed to balance domestic needs and global competitiveness.
Key components of the policy framework include:

• Foreign Trade Policy (FTP): Outlines export promotion schemes, such as Merchandise Exports from India Scheme (MEIS) and Remission of Duties and Taxes on Exported Products (RoDTEP).
• Export Promotion Councils: APEDA, MPEDA, and various commodity boards regulate standards and provide market intelligence.
• Quality Standards: The Food Safety and Standards Authority of India (FSSAI) and Bureau of Indian Standards (BIS) ensure product safety and compliance with international norms.
• WTO Commitments: India’s trade policies adhere to World Trade Organization (WTO) agreements on agriculture, maintaining tariffs, subsidies, and market access within accepted limits.
• Trade Agreements: Bilateral and multilateral agreements, such as those with ASEAN, SAARC, and the European Union, facilitate preferential market access for agricultural products.

Trends and Challenges in Agricultural Trade

The export and import of agricultural products are influenced by various economic and environmental factors.
Recent Trends:

• Rising Exports: India’s agricultural exports have crossed significant milestones, exceeding USD 50 billion in recent years.
• Diversification: Increased export of processed and organic foods.
• Global Demand: Growing recognition of Indian spices, tea, and organic produce in international markets.
• Digitalisation: Use of e-commerce and traceability systems to promote transparency and efficiency.

Challenges:

• Price Volatility: Global market fluctuations affect farmers’ income and export stability.
• Non-Tariff Barriers: Sanitary and phytosanitary standards imposed by importing countries can restrict market access.
• Infrastructure Constraints: Limited cold storage, transport logistics, and port facilities hinder export competitiveness.
• Climate Change: Weather variations affect the production and quality of export crops.
• Dependence on Imports: Heavy reliance on edible oil imports exposes India to global price shocks.

Measures for Enhancing Agricultural Trade

To strengthen its position in global agricultural trade, India has adopted several strategies:

• Export Clusters: Development of agricultural export zones for specific commodities such as basmati rice, mangoes, and spices.
• Value Addition: Encouraging food processing industries to enhance export value.
• Infrastructure Development: Investments in cold chains, logistics, and warehousing under schemes like Pradhan Mantri Kisan Sampada Yojana (PMKSY).
• Organic and Sustainable Farming: Promoting certification and marketing of organic products to meet growing global demand.
• Market Diversification: Expanding exports to Africa, Latin America, and East Asia to reduce dependence on traditional markets.

Global Significance

Agricultural trade connects producers and consumers across the world, balancing food surpluses and deficits between regions. It also plays a key role in achieving United Nations Sustainable Development Goals (SDGs), particularly those related to Zero Hunger, Decent Work and Economic Growth, and Responsible Consumption and Production.