India has introduced several agriculture export policies over the years to promote and regulate its agricultural exports. These are a set of government regulations, measures, and incentives designed to govern and promote the export of agricultural products from a particular country. Read here to learn more.
India, with large and diverse agriculture, is among the world’s leading producers of cereals, milk, sugar, fruits and vegetables, spices, eggs, and seafood products. Indian agriculture continues to be the backbone of our society and it provides livelihood to nearly 50 percent of our population.
As a result, the traders in the Punjab-Haryana region are now hesitant to purchase basmati rice, resulting in lower prices for farmers compared to when exports were not restricted.
Agriculture Export Policy
The most recent policy is the “Agriculture Export Policy 2018,” which aimed to boost agricultural exports and provide a comprehensive framework for achieving the goal of promoting and regulating Agri-exports.
The vision of the policy is to harness the export potential of Indian agriculture, through suitable policy instruments, to make India a global power in agriculture and raise farmers’ income.
Here are the key features and objectives of India’s Agriculture Export Policy 2018:
- To double agricultural exports by 2022.
- To promote value addition and reduce post-harvest losses in agriculture.
- To create a globally competitive and diversified agriculture export sector.
- To explore new markets and increase India’s share in traditional markets.
- Cluster Approach: The policy encouraged the development of export-oriented agricultural clusters to enhance the value chain and promote the export of specific commodities.
- Market Access: It aimed to improve market access for Indian agricultural products by addressing tariff and non-tariff barriers, sanitary and phytosanitary issues, and technical regulations.
- Promotion of Organic Farming: The policy promoted organic farming and the export of organic products, aiming to tap into the growing demand for organic produce.
- Infrastructure Development: The policy emphasized infrastructure development, including cold chains, storage facilities, and packhouses, to reduce post-harvest losses.
- Research and Development: It aimed to strengthen research and development efforts in the agricultural sector to enhance the quality and competitiveness of Indian agricultural products.
- Quality Standards: The policy focused on the implementation of quality standards and certifications to meet international requirements.
- Trade Promotion: It encouraged the participation of Indian exporters in international trade fairs, exhibitions, and trade-related events.
- Export Promotion Forums: The establishment of state-level export promotion forums to facilitate stakeholder consultation and improve coordination in export-related activities.
- Financial Support: Financial incentives and support for market development, transportation, and product promotion were provided.
- Risk Management: The policy aimed to address market risks through various insurance and risk mitigation measures.
- Market Intelligence: The establishment of an online platform for market intelligence and information sharing.
- Trade Agreements: The policy aimed to negotiate favorable terms for agricultural trade in bilateral and multilateral trade agreements.
- Inter-Ministerial Coordination: It called for better coordination among various ministries to facilitate exports and address trade barriers.
- Sustainability and Environment: The policy aimed to promote sustainable and environment-friendly agricultural practices.
- Zero Rating of Export Obligations: Exports under various export promotion schemes were eligible for a “zero” rating of export obligations.
- Zero Duty EPCG Scheme: For the export of agriculture products, a zero-duty EPCG (Export Promotion Capital Goods) scheme was proposed to replace the existing 5% duty EPCG scheme.
Significance of Agriculture Export Policy
A dynamic nation of 1.3 billion consumers with rising discretionary incomes, changing food patterns, vast farming areas, diverse agriculture, and a large population dependent on agriculture has propelled India to the world’s center stage as a big consumer market and also as a key supplier of food products.
- It has often been suggested that an essential element of “Make in India” has to be “Bake in India”, i.e., a renewed focus on value addition and processed agricultural products.
- The rapidly growing global population and shrinking farmlands, coupled with changing socio-economic, agroclimatic, and dietary patterns, have challenged scientists and policymakers to reconsider how we grow and feed 7.5 billion global citizens.
- India’s quest is to grow sustainably, trade abundantly, and progress harmoniously.
- Agriculture export, if properly supported by infrastructure, institutional backup, packaging, freight transport and connected to the internal production system backed by market access will be in a position to transform the agricultural economy.
With numerous challenges, there has been a long-felt need for a dedicated agricultural export policy in India.
- The Agriculture Export Policy is framed with a focus on agriculture export-oriented production, export promotion, better farmer realization and synchronization within policies and programs of the Government of India.
- It is required to have a “Farmers’ Centric Approach” for improved income through value addition at the source itself which will help to minimize losses across the value chain.
- India needs to have a farmer-oriented strategy to achieve the twin objective of food security and be a prominent agriculture exporter of the world.
- The policy will also give a big push to food processing/manufacturing to have much higher growth in food production which will increase India’s share of value-added processed products in its Agriculture export basket at the global level.
Challenges in the Agri Export Policy
India faces several challenges in its agriculture export policy, despite being one of the world’s largest producers of various agricultural commodities.
These challenges can impact the country’s ability to fully capitalize on its agricultural potential in the global market.
- Trade Barriers and Tariffs: Many countries impose trade barriers and tariffs on agricultural imports, which can make Indian agricultural products less competitive in the international market. Reducing these barriers is crucial to boosting exports.
- Quality and Safety Standards: Meeting the stringent quality and safety standards of foreign markets can be a challenge for Indian agricultural products. Ensuring compliance with international standards is essential to gaining market access.
- Sanitary and Phytosanitary Measures: Adherence to sanitary and phytosanitary measures, which are aimed at protecting human, animal, and plant health, can be a hurdle for exports. Compliance with these measures is vital for accessing foreign markets.
- Infrastructure and Logistics: Inadequate infrastructure and logistical bottlenecks, including storage, transportation, and cold chain facilities, can result in post-harvest losses and lower product quality.
- Inefficient Supply Chain: The Indian agricultural supply chain is often fragmented and inefficient. Modernizing and streamlining the supply chain can improve the quality and timely delivery of products to international markets.
- Pricing and Subsidies: The pricing of agricultural products in India can be influenced by government interventions and subsidies, which can distort market forces. This can impact the competitiveness of Indian exports.
- Exchange Rate Fluctuations: Exchange rate volatility can affect the competitiveness of Indian agricultural exports. A stronger Indian rupee can make Indian products more expensive for foreign buyers.
- Climate Change: Climate change and environmental factors can affect crop yields and quality, posing challenges for consistent export supply.
- Pest and Disease Management: Pests and diseases can impact crop quality and lead to rejections in international markets. Effective pest and disease management is essential for maintaining product quality.
- Market Diversification: India tends to rely heavily on a few key export markets for its agricultural products. Diversifying into new markets can reduce dependency on a limited number of countries.
- Trade Agreements and Negotiations: Engaging in effective trade negotiations and agreements with other countries is crucial for expanding market access for Indian agricultural products.
- Research and Development: Investment in agricultural research and development is essential to improve crop varieties, increase productivity, and enhance the quality of Indian agricultural exports.
- Access to Credit: Access to affordable credit for farmers and agribusinesses is vital for the modernization and expansion of agricultural production for exports.
- Skills and Capacity Building: Building the skills and capacity of farmers and agribusinesses to meet global quality and safety standards is a key challenge.
- Government Policies and Regulations: Consistency and predictability in government policies and regulations related to agriculture and exports are critical for building trust and long-term partnerships with international buyers.
Addressing the challenges in India’s agriculture export policy will require a coordinated effort among the government, agricultural industry stakeholders, and the private sector. By improving infrastructure, quality control, market diversification, and regulatory frameworks, India can overcome these challenges and increase its agricultural exports, which are crucial for the country’s economic growth and food security.
India’s Agriculture Export Policy was designed to provide a conducive environment for agricultural exports by addressing various challenges, promoting value addition, and improving infrastructure. Its success depends on effective implementation, ongoing monitoring, and adaptability to changing trade dynamics. It is advisable to refer to the latest government documents and announcements for updates on India’s agriculture export policy.
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-Article by Swathi Satish