India’s Agricultural Trade Policy and Export Promotion Schemes

India’s agricultural trade policy balances domestic food security, price stability, and international export competitiveness. Managed primarily by the Ministry of Commerce and Industry alongside the Ministry of Agriculture and Farmers Welfare, the policy Framework regulates the export and import of farm commodities. To increase farmers’ income and integrate domestic agriculture into global value chains, the Union Government formulates targeted policies, provides transport subsidies, and institutes specialized promotion bodies to expand India’s presence across foreign markets.

Regulatory Architecture and Policy Framework

Agriculture Export Policy (AEP)

• Launch and Vision: Formulated in 2018 with the objective of doubling agricultural exports, aiming to increase trade from 30 billion US dollars to over 60 billion US dollars.
• Core Pillars: Focuses on institutional mechanisms, infrastructure support, cluster-based production, value-added exports, and regulatory streamlining.
• Agri-Clusters: Identifies product-specific clusters across districts to boost production of export-oriented crops like banana in Solapur, pomegranate in Solapur and Nashik, and mango in Lucknow.

Foreign Trade Policy (FTP) Guidelines

• Export Restrictions: Employs trade policy instruments such as Minimum Export Price (MEP), export duties, quantitative caps, and outright bans to stabilize domestic prices during inflationary shocks.
• Essential Commodities Regulation: Coordinates with the Essential Commodities Act, 1955, to regulate internal stock limits and manage exportable surpluses of staple grains, sugar, and onion.

Key Agricultural Export Promotion Schemes

Transport and Marketing Assistance (TMA) Scheme

• Objective: Provides financial assistance for the international component of freight and marketing to mitigate the freight disadvantage faced by Indian agricultural exporters.
• Coverage: Applies to specified agricultural products exported to designated international markets in Europe, North America, and South America.
• Implementation: Administered directly by the Directorate General of Foreign Trade (DGFT).

Remission of Duties and Taxes on Exported Products (RoDTEP) Scheme

• Mechanism: Replaced the erstwhile Merchandise Exports from India Scheme (MEIS) to comply with World Trade Organization (WTO) norms.
• Function: Refunds embedded central, state, and local duties, taxes, and levies incurred during the production and distribution of exported agricultural commodities.

Agriculture Infrastructure Fund (AIF)

• Capital Support: Provides medium-to-long term debt financing facilities for investment in post-harvest management infrastructure and community farming assets.
• Export Linkage: Grants interest subvention of 3% per annum on loans up to 2 crore rupees, aiding the establishment of cold chains, sorting units, and processing centers required for export markets.

Specialized Export Promotion Bodies and Authorities

Major Agricultural Export Commodities

Grains and Cereals

• Basmati Rice: India remains the world’s largest exporter of Basmati rice, with major markets in Iran, Saudi Arabia, Iraq, and the United Arab Emirates.
• Non-Basmati Rice: Forms a primary share of global rice trade, supplying affordable food grains across African and Asian markets.
• Wheat and Coarse Grains: Export volumes fluctuate depending on domestic buffer stock levels, minimum support price adjustments, and domestic inflation controls.

Commercial Crops and Horticulture

• Marine Products: Frozen shrimp forms the largest share of India’s marine exports, with major export destinations including the United States and China.
• Spices: India dominates global trade in chili, cumin, turmeric, and spice oils and oleoresins.
• Spices and Plantation Goods: Coffee and tea generate steady export revenue, with Orthodox tea exported to Russia, Iran, and the United Kingdom, and Robusta coffee exported to European processors.
• Sugar: India operates as a major global sugar supplier, regulating exports through quota allocations tied to domestic production estimates.

Key Facts and Trivia for Exam Preparation

• APEDA Creation: Established under the Agricultural and Processed Food Products Export Development Authority Act, 1985, coming into effect in February 1986.
• Spices Board Formation: Created by merging the erstwhile Cardamom Board and the Spices Export Promotion Council under the Spices Board Act, 1986.
• Largest Exported Agricultural Item: Frozen shrimp and Basmati rice consistently rank as India’s top two agricultural export earners by value.
• WTO Agreement on Agriculture (AoA): Regulates domestic support (Amber Box, Blue Box, Green Box), market access, and export subsidies in international trade.
• Gl Registration Role: APEDA acts as the registered proprietor for the Geographical Indication (GI) tag of Basmati Rice grown in specified regions of northern India.
• Plantation Acts Basis: The Tea Board (Tea Act, 1953), Coffee Board (Coffee Act, 1942), and Rubber Board (Rubber Act, 1947) function as statutory bodies created by specific parliamentary legislation.
• MPEDA Headquarters: Headquartered in Kochi, Kerala, overseeing marine product processing standards and export quality checks.
• Sanitary and Phytosanitary (SPS) Measures: Refers to WTO-compliant standards applied by importing nations to protect human, animal, or plant life from risks arising from additives, toxins, or disease-causing organisms.