Due to its reliance on five commodities for export, the agriculture industry is susceptible to changes in demand and pricing globally. GTRI

 Due to its reliance on five commodities for export, the agriculture industry is susceptible to changes in demand and pricing globally. GTRI

Due to its reliance on five commodities for export, the agriculture industry is susceptible to changes in demand and pricing globally. GTRI

According to the Global Trade Research Initiative (GTRI), 51.5% of India's total agricultural exports are made up of these five products: sugar, spices, oil meals, non-basmati rice, and basmati rice.

According to a research by the economic think tank GTRI, only five commodities—rice and sugar—make up India's agricultural export basket, leaving the industry susceptible to changes in demand and price around the world.

According to the Global Trade Research Initiative (GTRI), 51.5% of India's total agricultural exports are made up of these five products: sugar, spices, oil meals, non-basmati rice, and basmati rice.

The lack of infrastructure, problems with quality control, and non-tariff obstacles are just a few of the home problems India is facing, all of which impede the development and competitiveness of the nation's agricultural industry.

It noted, "This makes them (agricultural exports) vulnerable to fluctuations in global prices and demand," and it also mentioned how often India imposes export limits on these goods. As.

India is now litigating in the World Trade Organization (WTO) to defend subsidies on rice and wheat under the Public Stock Holding Program, and exports of non-Basmati rice are prohibited.

In addition, a few WTO members have drawn India into issues about sugar because it gives farmers subsidies.

"All this makes India's top exports vulnerable and uncertain," concluded the report.

The think tank has recommended that the government concentrate on areas like the region's contemporary infrastructure in order to address this problem.

According to the research, despite China's excellent rice yield, the government discourages rice exports since one kilogram of rice may require up to 800 liters of water.

Additionally, it said that the agricultural trade picture for India in 2023 is difficult.

According to the report, agricultural imports and exports are expected to total US$33 billion and US$43.3 billion, respectively, with the industry seeing a sharp fall from the year before.

"Compared to 2022, exports will fall by 7.2% and imports by 10.1% in 2023. 10.1% of India's goods exports will be made up of agricultural products. This decrease is made worse by the exports being concentrated on a small number of goods, such as sugar and rice.As a result, the market is more susceptible to changes in world prices as well as legislative limitations such export prohibitions and WTO disputes."

In order to improve quality, safety, and market access, it was said that India is adopting cutting-edge programs like farm-to-fork and traceability systems in a variety of agricultural goods. India is also benefiting from international advancements in this area.

"Indian agriculture faces significant challenges, including heavy dependence on both sugar and rice, making it vulnerable to fluctuations in domestic policy, unorganized sector activity, as well as developments in global markets," said Ajay Srivastava, co-founder of GTRI. increases sensitivity." He recommended reconsidering the industry since, generally speaking, export revenues do not offset input or environmental expenses.

According to Srivastava, the industry is hindered by poor cold chain infrastructure, ineffective logistics, which cause spoiling and problems with export competitiveness. High non-tariff barriers to entry in foreign markets also affect quality and traceability. Additionally impeding export possibilities are placement inconsistencies.

"India's substantial public stockholding is a divisive topic in the WTO for food security at the policy level, and the ongoing negotiations only make matters more unclear." Global agricultural patterns and a small number of powerful firms in the global grain trade exacerbate these problems. According to the paper, "this highlights the need for strategic reforms in infrastructure, quality control, and policy adaptation to enhance India's agriculture sector's global competitiveness."

Basic agricultural goods, processed agricultural products, and other items are the three main export product groups.

The GTRI projection states that there would be a ten percent reduction in the export value of basic agricultural goods from US$24.8 billion in 2022 to US$22.3 billion in 2023. A noteworthy 51.5 percent of India's total agricultural exports fell under this group.

Exports of processed agricultural products might drop from $16.3 billion in 2018 to $15.7 billion in 2023. This industry accounts for 36.3% of all exports.

According to the report, other product categories would see a 5.6% drop, from US$5.6 billion in 2022 to US$5.3 billion in 2023. This represents 12.2% of all exports.

Non-Basmati rice shipments have decreased by 12.2 percent to US$ 5.51 billion so far in 2023. Nonetheless, this calendar year's exports of basmati rice climbed by 17.7% to reach US$5.3 billion.

This calendar year, sugar shipments have decreased by 32.4 percent so far. The tax is still around $4 billion USD. During the year under review, exports of oil cakes and spices increased by 48.6% and 8.5%, respectively, to reach US$ 1.83 billion and US$ 3.72 billion.

Ayurvedic and herbal items, meat, silk, wool, and cotton, dairy, fresh fruits, tobacco, processed fruits and juices, groundnuts, fresh vegetables, and stay animals are among the other agricultural products that India exports.