May 04, 2024 04:29 PM IST
India’s agricultural exports fell 9% in 2023-24 due to bans on staples. To offset, officials plan to boost perishables and fruits exports, targeting new markets and sea routes.
India’s agricultural exports plunged nearly 9% in the first 11 months of 2023-24, prompting authorities to work on fresh strategies to push shipments of perishables and fruits, especially to offset the impact of the country’s bans on rice, wheat, sugar and onion exports, a senior official said.
Curbs on shipments by the world’s second-largest producer of wheat, rice and sugar to cool domestic prices, the Red Sea crisis and the knock-on effects of the Ukraine war have led to an 8.8% fall in exports to $43.7 billion during the 11 months for which latest data are available. In the previous year, total exports of farm produce were valued at $53 billion.
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The government is unlikely to lift the bans on shipments of key staples due to continued risks of high food prices, prompting the government to rework its export strategy, the official said. Although consumer inflation eased to 4.85% from a year ago in March, a 10-month low, food inflation was still high at 8.52%.
India’s exports have fallen mainly because of a ban on staples. The country is otherwise a major exporter of rice, which makes up for more than 40% of global rice shipments. In 2021-22, the country exported nearly 22 million tonnes of the grain, about a sixth of its total domestic output.
Despite a fall in overall farm-produce exports, shipments of long-grain basmati rice rose 22% to $5.2 billion during April Feb FY24. Basmati rice currently attracts a minimum export price.
“The fact that basmati exports went up despite an export regulation, which is the minimum export price, shows that there is a high demand for most staples, and unfortunately India doesn’t have enough surpluses of cereals to lift its bans,” said Abhishek Agrawal, an analyst with Comtrade.
As part of its plan to boost exports, the country is adopting a two-pronged approach. It will continue to diversify exports and push so-called “unregulated items”, which refers to farm produce not regulated by trade policies.
The government has identified 20 such agricultural produce and products with high export potential in markets such as United States, Europe and Japan. These include bananas, mangoes and alcoholic beverages, according to a second official.
According to an internal review, global exports of these items are worth over $400 billion, which the country will have to tap into since India’s share in these products is just 2% and valued at only $9 billion.
Authorities are also looking to ramp up shipments of fresh fruits and processed food items through sea routes since most perishables are shipped by air, which is expensive and plagued by capacity constraints.
For newer sea routes, protocols are being developed by the Agricultural and Processed Food Products Export Development Authority (APEDA), a body under the commerce ministry, and the Indian Council of Agricultural Research (ICAR), a wing of the agriculture ministry, the first official said.
The country is looking to ship oranges, bananas and pomegranates especially to US and Europe through the sea route. The country recently shipped bananas to the Netherlands US and pomegranates to the US via sea. Shipping via sea channels, in contrast to air cargo, can increase export volumes substantially, the second official said.
- ABOUT THE AUTHOR
Zia Haq reports on public policy, economy and agriculture. Particularly interested in development economics and growth theories.
