Introduction

Agriculture continues to be a critical pillar of India’s external trade. Despite restrictions on cereals in recent years, India is witnessing robust export performance driven by meat, rice, spices, fruits-vegetables, tobacco, and marine products. Import trends indicate rising edible oil dependence and inflation moderation.

Why in the News?

India’s agricultural exports have surged faster than overall merchandise exports, reaching $25.9 billion in April-September 2024, a 25.8% jump over the previous year, compared to a marginal 0.1% rise in total exports. This turnaround comes after a period of contraction due to export curbs (2022-23) on key items like wheat and non-basmati rice. The renewed momentum signals policy success, global demand recovery, and diversification beyond the US market.

What is driving the recent surge in agri exports?

1. Policy relaxation: Lifting of post-Ukraine export curbs on wheat, rice, sugar, etc., improved outbound shipments.
2. Market diversification: Growth in demand from Latin America, Africa, Middle-East reduced dependency on the US.
3. Production rebound: Normal monsoon boosted availability of sugar, spices, seafood, fruit-veg.
4. High-value product focus: Marine goods ($4.8 bn), non-basmati rice ($2.85 bn), and cotton ($1.6 bn) led performance.

Which products are leading the export spike?

1. Marine products: Largest export category at $4.8 bn Apr-Sep 2024.
2. Rice (Non-basmati): Strong recovery despite earlier restrictions ( $2.85 bn ).
3. Buffalo meat & poultry: $2.25 bn & $0.414 bn exports supported by West Asia.
4. Fresh fruits & vegetables: Jump to $1.49 bn due to tomato, onion shipments.
5. Sugar & tobacco: Robust global prices drove exports above $0.9 bn and $0.82 bn respectively.

How have imports behaved during the same period?

1. Edible oils dominate: $7.3 bn, showing structural import dependence.
2. Cashew, pulses, fresh fruits: Rising imports due to domestic shortfalls.
3. Wheat trade flip: Exports rose post-2022 restrictions but imports revived due to domestic price pressures.
4. India remains a net agri-exporter, but oil imports remain a vulnerability.

What are the key factors shaping fluctuations in exports?

1. Geopolitics & tariffs:
   1. US-China trade tensions: Opened new windows for India.
   2. Trump-era duties impacted Indian produce.
   3. Russia war disrupted sunflower oil & grain flows.
2. Commodity price volatility: FAO Index declined and this led to lower export values for wheat, sugar.
3. Logistics: Container shortages & high freight (2022-23) stabilised by 2024.

What are the major challenges ahead?

1. Export restrictions continue on items like wheat, some rice variants.
2. Quality & traceability issues: Growing scrutiny by EU/Australia.
3. Climate shocks impacting horticulture and cash crops.
4. Overdependence on 2-3 markets for meat, marine products.

Conclusion

India’s recent agricultural export growth reflects policy easing, supply recovery, and expanding market access. However, sustaining competitiveness demands edible oil self-reliance, quality upgrades, logistics reforms, and stable export policies. Balanced agri-trade will support farmer income and strengthen India’s role in global food value chains.

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[UPSC 2022] What are the main bottlenecks in the upstream and downstream process of marketing of agricultural products in India?

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