Structure, Performance and Competitiveness in Indian Agricultural Exports

Abstract

Trade in agricultural commodities can play a significant role in stabilizing the supply conditions, help ensure the food security and stabilizing agricultural prices. International trade has also been recognized as an engine for inclusive economic growth, poverty reduction and an important tool to achieve the Sustainable Development Goals (SDGs) Diverse agro-climatic conditions in India endow the country with production and trade of various agricultural commodities. Agricultural exports from India have undergone significant change in terms of trends, composition and diversification. We examined the trend in exports of agricultural commodities, export performance, commodity and geographical diversification and established the trade-growth linkages. Export performance was examined through the comparative export performance index. Since 2001, cotton and cereals, especially rice have been the major contributors in agricultural exports. Also, the share of meat and edible meat offals has consistently increased during 2001–2018. Analyses of export performance for various commodity groups during 2011–14 and 2015–18 categorized various exported commodities into highly competitive, competitive, weakly competitive and uncompetitive commodities. During 2011–18, rice, frozen bovine meat, cotton yarn, raw cotton, ginger, pepper and seed spices remained highly competitive commodities. Crustaceans emerged as highly competitive during 2015–18. Granger causality established bidirectional causality in tea, coffee, spices and fish exports, while the export-led growth hypothesis was confirmed in the case of cotton. The country needs to focus on stable trade policy particularly in those commodities with greater trade potential. Also, the sanitary and phytosanitary measures (SPS) should be taken care of strictly adhering to the international standards. Export-oriented supply chains should be efficiently managed reducing the costs and making exports more competitive. With Government’s focus to double agricultural exports and an Agricultural Export Policy in place, India needs to find effective solutions to become a global leader in agricultural exports. Needless to say, effective logistic management and quality management is the need of the hour to strengthen global trade linkages.