Trade Competitiveness and Impact of Food Safety Regulations on Market Access of India's Horticultural Trade

Abstract

The paper has looked into the composition and direction of India's horticultural trade and the comparative advantage that India enjoys in selected markets with respect to its competitors. The importance of SPS provisions stipulated by niche market importers as barrier to India's trade, and the SPS compliance strategies adopted by the exporters are also dealt. It has been observed that Asian countries are the favourite export destinations for most of the Indian horticultural commodities, even though the unit price realized is less compared to that realized in the European countries, USA and Japan. The study has found that India has comparative advantage over China in the Asia market in fresh grapes, guava, and mango. In cashew, Tanzania and Vietnam have consistently enjoyed comparative advantage over India in the EU market, but not in the Asia market. Food safety standards stipulated by the USA and EU have had considerable impact on Indian horticultural exports as the country faces the highest number of rejections of consignments and notifications issued. Exports of spices, fresh and processed fruits, and vegetables are the most affected commodities due to non-compliance. The non-tariff barriers established by the importing countries combined with other factors like zero tolerance to insects and pests, and issues in certification, cause difficulties to the exporters. Rejection or additional checks at the entry points create considerable financial loss, delay in delivery to the client, loss of quality and reputation of Indian exports.