Agriculture and Food Industry and Export
INTRODUCTION
The agriculture sector is the largest source of livelihood in India. The country is one of the largest producers of agriculture and food products in the world. In 2021-22, India’s agriculture sector growth rate was estimated to be at 3.9% as compared to the 3.6% in the previous year. The country produces many crops and food grains such as rice, wheat, pulses, oilseeds, coffee, jute, sugarcane, tea, tobacco, groundnuts, dairy products, fruits, etc.
During 2021-22, India’s tea production stood at 1,344.40 million kg. Coffee production during the same period was 3420 lakh tonnes, a 2.39% YoY increase. During 2021-22, oilseeds production of India crossed the estimated 37.15 million tonnes while other products such as rice, wheat, maize, pulses, mustard, and sugarcane reached a record high production.
The top crops producing states in India are West Bengal, Uttar Pradesh, Punjab, Gujarat, Haryana, Madhya Pradesh, Assam, Andhra Pradesh, Karnataka and Chhattisgarh. Most of the wheat produced in the country comes from Uttar Pradesh, Punjab, Haryana, Madhya Pradesh, Rajasthan, Bihar and Gujarat. Uttar Pradesh is the largest producer of sugarcane in India contributing about 48%, followed by Maharashtra and Karnataka at 23% and 9% of the total production respectively.
EXPORT TREND
India is one of the largest agricultural product exporters in the world. During 2021-22, the country recorded US$ 49.6 billion in total agriculture exports with a 20% increase from US$ 41.3 billion in 2020-21. India’s agriculture sector primarily exports agri & allied products, marine products, plantation, and textile & allied products. Agri & allied products exports were valued at US$ 37.3 billion, recording a growth of 17% over 2020-21.
Rice is the largest exported agricultural product from India and contributed to more than 19% of the total agriculture export during the year 2021-22. Sugar, spices and buffalo meat are among the largest exported products with the contribution of 9%, 8% and 7% to 2021-22 agriculture exports, respectively. Wheat exports were valued at US$ 2.1 billion in 2021-22 after recording significant growth over exports of US$ 568 million in 2020-21. Coffee exports have crossed US$ 1 billion for the first time, which has improved realizations for coffee growers in Karnataka, Kerala and Tamil Nadu. Higher exports of marine products, at US$ 7.7 billion, is benefitting farmers in the coastal states of West Bengal, Andhra Pradesh, Odisha, Tamil Nadu, Kerala, Maharashtra and Gujarat.
The government’s commitment to increase farmers‟ income can be seen through significant rise witnessed in Agri-exports through giving thrust on boosting exports. Various initiatives taken by the government through APEDA such as organizing B2B exhibitions in different countries, exploring new potential markets through product specific and general marketing campaigns have worked as catalyst to growth exports. The government of India has created products matrix for 50 agricultural products with strong export potential and recognized 220 labs to provide services of testing a wide range of products to enable exporters across India.
EXPORT DESTINATION
The largest importers of India’s agricultural products are USA, Bangladesh, China, UAE, Indonesia, Vietnam, Saudi Arabia, Iran, Nepal and Malaysia. The other importing countries are Korea, Japan, Italy, and the UK. During 2021-22, USA was the largest importer of Indian agricultural products at US$ 5.7 billion with share at 11.5% of the total exports. Bangladesh is the major importer of Agri & allied products at US$ 3.8 billion followed by UAE at US$ 2.3 billion. USA and China are major importer of India’s marine products.
The government of India is keen to organize virtual buyer seller meets (V-BSM) on agricultural and food products with the major importing countries across the world to promote geographical indications (GI) registered with agricultural and processed food products in India. So far 17 V-BSMs have been organized with Kuwait, Indonesia, Switzerland, Belgium and Iran. Similar programs have been organized for Canada (Organic products), UAE & USA (GI products), Germany, South Africa, Australia, Thailand, Oman, Bhutan, Azerbaijan and Qatar.
The government has set up thirteen Agri-Cells in Indian embassies in Vietnam, USA, Bangladesh, Nepal, UAE, Iran, Saudi Arabia, Malaysia, Indonesia, Singapore, China, Japan and Argentina to provide inputs on real time basis to improve Indian exports at these destinations by promoting trade, tourism, technology and investment goals.
GOVERNMENT INITIATIVES
a) Agriculture Export Policy 2018 (AEP)
The Government of India has introduced a comprehensive Agriculture Export Policy (AEP) to promote exports of agricultural products. The key objectives of the AEP are to diversify export basket and destinations, to boost high value-added agricultural exports, to promote indigenous, organic, traditional and non-traditional Agri products exports, to provide an institutional mechanism for pursuing market access and to enable farmers to get benefit of export opportunities in overseas market.
b) Financial Assistance Scheme (FAS)
FAS is the export promotion scheme by the Agriculture and Processed Food Products Export Development Authority (APEDA). It is part of the Finance Commission Cycle for the years 2021-22 to 2025-26. The primary aim of this scheme is to assist businesses in export infrastructure development, quality development and market development. The financial assistance under the scheme will range from Rs. 5 lakh (US$ 6,500) to Rs. 5 crore (US$ 650,000).
c) Ministry of Commerce & Industry scheme
The Department of Commerce under Ministry of Commerce & Industry has also initiated several schemes to promote exports, including Trade Infrastructure for Export Scheme (TIES), Market Access Initiatives (MAI) Scheme, etc.
In addition, assistance to the exporters of agricultural products is also available under the Export Promotion Schemes of APEDA, Marine Products Export Development Authority (MPEDA), Tobacco Board, Tea Board, Coffee Board, Rubber Board and Spices Board. Further, to boost honey exports, India has made NMR (Nuclear Magnetic Resonance) testing mandatory for honey exported to USA.
GOVERNMENT BODY
Agriculuture and Porocessed Food Products Export Development Authority (APEDA)
APEDA was formed in 1986 for the development of the exports of the agriculture industry in India. The main functions of the authority are the registration of people as exporters, fixing standards and specifications for the scheduled products, carrying out inspections, collecting statistics and providing information, training and advisory services to the exporters. APEDA is entrusted with the responsibility of export and promotion of 14 agriculture and processed food product groups.
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Source: India Brand Equity Foundation
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