India's Agri Trade, Import Trends and Policy Effects

India’s Agri Trade, Import Trends and Policy Effects

India's agricultural exports dropped by 8.2%, totaling $48.82 billion. Check here Import Trends, Policy Effects, Policy Takeaways and Recommendations for India's Agri Trade.

Table of Contents

Context: India’s agricultural exports dropped by 8.2%, totalling $48.82 billion, down from a record $53.15 billion in 2022-23 and $50.24 billion the previous fiscal year.

India’s Agri Trade: Factors Driving Change

Global commodity prices: Low international prices earlier hampered exports, while the recent surge due to COVID-19 and the Russia-Ukraine conflict had boosted them.
Government restrictions: The decline in exports was significantly impacted by government-imposed shipment curbs on key commodities like sugar, non-basmati rice, wheat, and onions.

Specific Examples

Sugar: Exports fell to $2.82 billion in 2023-24 from higher values in the previous years due to a ban on sugar exports.
Non-Basmati Rice: Export value dropped from $6.36 billion in 2022-23 to $4.57 billion in 2023-24, influenced by a ban and a 20% export duty.
Wheat and Onions: Exports were heavily affected by bans and high export duties, leading to significant drops in export volumes and values.

Import Trends and Policy Effects

Overall Decline: There was a 7.9% decrease in agricultural imports in 2023-24, primarily due to reduced edible oil imports.
Vegetable Oils: The import bill for vegetable oils fell below $15 billion due to lower global prices following the Russia-Ukraine war’s impact on the market.
Pulses: Imports of pulses nearly doubled to $3.75 billion, marking the highest level since 2015-16 and 2016-17.

Policy Takeaways and Recommendations

Impact on Farmers: Export bans/restrictions prioritise consumers but hurt farmers and disrupt established markets.
Policy Predictability: Economists favour rules-based policies (like temporary tariffs) over outright bans.
Import Duties: The government’s zero/low import duties on pulses and edible oils conflict to promote domestic crop diversification towards oilseeds and pulses.
Need for Balanced Policy: The next government needs a rational export-import policy that considers both producers and consumers, as well as long-term agricultural goals.