Agri exports outpace other commodities’

Mumbai: Growth in India's agricultural exports has exceeded the rise in exports of other products. Through the past few years, these products have consistently seen a rise in their share in the export basket, primarily due to the huge stocks resulting from bumper output, as well as favourable government policies.

According to data from the commerce ministry, in 2010-11, agricultural exports stood at $17.35 billion, in 2011-12 $27.43 billion, in 2012-13 $31.86 billion and in the first 11 months of 2013-14, it stood at $29.3 billion.

During this four-year period, overall exports recorded 93 per cent growth. The share of agricultural commodities in India's overall export basked rose to 10.66 per cent in 2012-13 from 7.06 per cent in 2009-10.

"Agricultural exports growth will continue in the future, too, with improved prospects and favourable long-term policy support," Commerce Minister Anand Sharma had said on the sidelines of a Business Standard awards function here on Saturday.

Sharma said from now, basmati rice would incorporate the new Pusa 1121 variety. Various promotional efforts in major importing countries made the Pusa 1121 variety a preferred choice. Also, the Centre had signed free trade agreements with a number of agricultural product-deficient countries. The government also allowed exports of foodgrains and other agricultural commodities on a quota basis, with a positive response.

Recently, India had allowed limited exports of pulses to Maldives. It has already been announced subsidy for sugar had resulted in a spurt in exports.

Buffalo meat and guar gum are other major products seeing significant growth in the export basket. Though guar gum prices have fallen in the past year, its exports have risen in volume terms.

“The growth momentum in India’s agricultural exports is expected to continue in the next few years, with an increased share of processed food, including mango pulp, dried and preserved vegetables, meat and poultry items. Factors such as reduced transaction costs, time, better port gate management and fiscal incentives contributed to this upward trend. With continued focus on issues such as food safety and compliance with international standards, we can surely reach new heights,” said Piruz Khambatta, chairman and managing director, Rasna, and chairman, Confederation of Indian Industry’s national committee on food processing.

According to the World Trade Organization, global export and import of agricultural and food products stands at $1.66 trillion and $1.82 trillion, respectively, of which India's shares are 2.07 per cent and 1.24 per cent', respectively. This indicates India is a net exporter of agricultural products. The country ranks 10th in terms of global agricultural and food exports.

In recent years, the government's policy impetus has provided stability to agricultural exports. Given sufficient stocks of foodgrains in the central pool, the government has allowed exports of wheat. Also, efforts have been taken to promote horticulture exports. "Though these measures are in the right direction, a consistent long-term trade policy, with tariff in a narrow band, might be required to acquire international presence in commodities, wherein it has comparative advantage," Economic Survey 2012-13 had stated.

Sharma said the government was working on a long-term policy for sustainable growth in agricultural commodities. Currently, India is the world's largest rice exporter and second, in terms of wheat exports. Horticulture exports have also seen good growth. To achieve the desired growth, "India needs to change the cropping pattern, with a larger focus on north India", Sharma had said.

R S Rawat, secretary-general, Associated Chambers of Commerce and Industry of India, said, “The government must take policy reforms to support growth in agricultural commodities. To achieve the $70-billion export target for 2017 will not be too ambitious, with the possibility of policy implementation increasing productivity and promoting diversity of crops and specialised items to meet specific demands abroad.”

Among agricultural commodities, exports of basmati rice have risen 46 per cent to $3.47 billion in the first nine months of this financial year, compared with $2.37 billion in the year-ago period. Exports of non-basmati rice rose seven per cent to $2.13 billion in the April-December 2013 period from $1.99 billion in the year-ago period. Exports of dairy products recorded 138 per cent growth in April-December 2013 at $435.93 million, against $183.24 million in the corresponding period last year. Due to declining global wheat prices, India’s realisation from wheat exports fell 5.24 per cent — from $1.24 billion to $1.17 billion.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.