NMIMS – KIRIT P.

MEHTA SCHOOL OF LAW

SUBJECT:
POLITICAL SCIENCE – IV

A PAPER ON:
INDIA’S AGRICULTURE EXPORT POLICY

SUBMITTED TO:
Prof. RAVI SAXENA

SUBMITTED BY: DEVYANI

BA LLB – ‘A’
Roll No. - A041
Semester – IV
ABSTRACT
India is one of the top producers of cereals, milk, sugar, fruits, vegetables, spices, eggs, and
seafood goods in the world thanks to its extensive and diverse agricultural sector. About 50%
of Indians depend on agriculture for their living, which remains the foundation of our
civilization. With just 2.4% of the world's land and 4% of its water resources, India is home
to 17.84% of the world's population and 15% of the world's cattle. Hence, Indian agriculture
must constantly innovate and work to improve production, pre- and post-harvest
management, processing, and value addition, as well as use technology and build
infrastructure. One of the most significant segments of the Indian economy is the agricultural
industry. Almost 50% of India's workforce is employed in the agricultural industry, which
contributed 15%.87 of the country's GDP in 2018-2019. The agriculture sector must make
significant contributions as India transitions to become an emerging economic force. This
paper analyses the development of India's agricultural policy and gives a detailed study of the
patterns and characteristics of the country's agricultural exports. The paper will help get a
comprehensive view of the 2018 Agricultural Export Policy and intend to study India's
position in agricultural export. The paper will talk about the advantages and disadvantages of
the export policy and the areas which needs attention.

INTRODUCTION
India is second in the world for agricultural production, but it is eighth for exports with a
2.2% share of the world market (WTO, 2019). Compared to other developing agrarian
nations, India's domestic agricultural exports contribute less than 2% of the country's GDP.
Argentina, another top exporter, saw agricultural exports contribute to nearly 7% of its GDP
in 2018, while Brazil and Indonesia, which are ranked third and sixth in the world in terms of
agricultural exports, saw their GDPs rise by 5% and 4.4%, respectively (World Bank).
Moreover, the agriculture sector's overall export contribution to the nation has slightly
decreased from 12.07 percent in 2016–17 to 11.76 percent in 2017. (2018-19) These trends
are explained by decreased demand and prices on the global market, unfavourable currency
fluctuations, and global events like sanctions against Iran and Russia. Moreover, agriculture's
contribution to the nation's gross value added has decreased, from 17.83% in 2012–13 to
14.9% in 2017–18 (MoFPI, 2018). Many of these explanations are given for India's lower
agriculture revenues. In light of this, experts have recently observed that strengthening value-
added agricultural exports, which account for less than 15% of India's overall agricultural
exports, is just as important as increasing agricultural exports in order to raise farmers'
incomes (Gulati et al, 2019). Buying into this reasoning, the Central government has
launched a variety of efforts to promote agricultural exports.

These consist of Market Access Initiatives (MAI) Program, Merchandise Exports from India
Scheme (MEIS), Trade Infrastructure for Export Scheme (TIES), Transport and Marketing
Support for Specified Agricultural Goods, and others. The Agricultural & Processed Food
Products Export Development Authority (APEDA), the Marine Products Export
Development Authority (MPEDA), the Tobacco Board, the Tea Board, the Coffee Board, the
Rubber Board, and the Spices Board all offer help to exporters of agricultural products.
Notwithstanding all of these attempts, India still faces challenges in diversifying its
agricultural exports and increasing their value. The "Agriculture Export Policy" was
authorised by the Narendra Modi-led NDA Government, which aims to double farmers'
income and increase the percentage of agricultural exports from the current USD 30 billion to
USD 60 billion by 2022. (Ministry of Commerce and Industry, Agricultural Export Policy,
2018). Although the aim being ambitious in light of the current hardships of the farming
community, it has been viewed as a positive step towards turning farming into a successful
economic endeavour. The policy's primary goal is to involve farmers in contemporary trade
and commerce-related activities in order to greatly boost their revenue. Current growth rates
demonstrate that agri-food production is increasing more quickly than domestic demand, and
the amount of surplus for export is expanding more quickly. Food security has been the main
focus of previous research on agricultural policies, and agro-trade policies promote this
objective. For sustained agriculture development in India, it is advisable to use irrigation,
regenerating groundwater, water harvesting, and drip irrigations, nutrient-based fertiliser
subsidies, agro credit from institutional sources, only holding strategic reserves of food grain
stock, levying an export duty rather than imposing quantitative restrictions, and so on. India's
tea exports have decreased as a result of high local demand, low productivity, reduced
production land, fierce market competition, and the decline of the traditional tea market.
India's cashew export has decreased as a result of the competition in manufacturing
technologies and processing along with the poor value units provided by the competing
nations.

As a result, there is potential and opportunity to gain access to international markets, generate
foreign currency, and raise agricultural product prices for producers.

RESEARCH OBJECTIVES
1. To study about India’s Agricultural export policy and analyze India’s position in
agricultural export.
2. To study about the problems faced by the country with respect to export of agriculture
and the areas which need attention.

RESEARCH QUESTIONS
1. What is India’s agriculture export policy and what is India’s position in agricultural
export?
2. What are the problems faced by the country with respect to export of agriculture?

RESEARCH METHEDOLOGY
Secondary sources of data has been used in the making of this research paper. Secondary
sources like articles, journals, research papers by well known authors and various trusted
websites available on the internet. Data from government websites have been used for an
intensive study of the subject.
REVIEW OF LITERATURE
1. The writer of this paper says that India has the difficult goal of increasing its
agricultural exports to $100 billion by 2026–2027. A well-calibrated, comprehensive,
strategic, and goal-oriented agri-export policy and action plan, together with broad
changes in the agricultural and related sectors, would be necessary to achieve the
agriculture export targets. By using the best agricultural practises, the agriculture
export plan should seek to integrate value-added agricultural products into the global
value chain while also increasing productivity, cost competitiveness, and farmer
income. (Debesh Roy, Bijetri Roy, 2022)

2. This study's primary goal is to assess the effects of the Indian government's new
agricultural export strategy, which was put into effect in 2018. In order to double
farmers' income by 2022, the Ministry of Trade implemented a number of schemes,
which are all critically evaluated in this essay. The influence of the new agricultural
export policy on increasing the productivity and profitability of Indian agriculture is
also evaluated in this article. The new agricultural export policy, the paper's
conclusion, will lay the groundwork for Indian agriculture to become competitive on a
worldwide scale. Additionally, it claims that the ease of conducting agricultural
business index will promote interstate health competitiveness. (Parashram Patil,
Pravin Jadhav, Moinak Maiti, 2020)

3. This paper critically assesses the development of India's agricultural policy and gives
a detailed study of the patterns and characteristics of the country's agricultural
exports. The exercise analysis that was conducted helped us make the case that the
2018 Agricultural Export Policy does, in fact, intend to strengthen India's position in
agricultural export. Nonetheless, numerous strands that demand rapid care are left out
during its creation. In order to facilitate trade in agricultural products and develop the
agricultural value chain from an export perspective, it is advised to increase
investment in this area. Also, the development of state ability to address the main
barriers to agricultural exports needs to be considered. Because of a variety of factors,
including the nature of the product, the number of actors in the supply chain, the
usage of technology, and others, challenges in agriculture vary depending on the
commodity. Hence, even in agriculture, one size does not fit all cannot be
implemented. (Malini L Tantri, 2021)

4. According to the study, the process of economic reforms and India's agriculture's
gradual openness to global markets will certainly change the terms of trade in favour
of agriculture, providing a stronger environment for agricultural incentives than in
previous decades. A significant supply-side change is required, together with a
complete removal of all export restrictions on agricultural commodities, especially
foodgrains, in order to fully take advantage of this opportunity. Technology,
fertilisers, irrigation, infrastructure, and loans are supply-side elements that increase
aggregate supply responsiveness and are the main drivers behind the rapid and
sustained growth of Indian agriculture. With the broad policy changes in supply-side
 factors discussed in this paper, India can realistically benefit from the shifting
economic landscape both domestically and internationally by fostering the expansion
of its agricultural sector, giving impetus to the economy's overall growth, and
generating more employment, regional and sectoral equity, a faster decline in poverty,
more effective resource use, and better environmental protection than in the past. (C.
H. Hanumantha Rao, Ashok Gulati, 2019)

5. This paper reviews the performance of Indian agriculture in the context of the
development in agricultural trade especially agricultural exports internationally and
outlines a strategy for augmenting India's agricultural exports. (V S Vyas, 2000)

INDIA’S EXPORT POLICY : VISION AND OBJECTIVES

The Government introduced a comprehensive Agriculture Export Policy in December 2018,

with the following objectives:

i. To diversify our export basket, destinations and boost high value and value added
agricultural exports, including focus on perishables.
ii. To promote novel, indigenous, organic, ethnic, traditional and non-traditional Agri
products exports.
iii. To provide an institutional mechanism for pursuing market access, tackling barriers
and dealing with sanitary and phytosanitary issues.
iv. To strive to double India’s share in world agri exports by integrating with global value
chains.
v. Enable farmers to get benefit of export opportunities in overseas market.1

With 1.3 billion customers, a growing middle class, shifting dietary habits, a sizable farming
area, a diverse agricultural sector, and a sizable population dependent on agriculture, India
has catapulted to the forefront of the global food supply chain and has become a major
consumer market. It has frequently been argued that "Bake in India," or a revived emphasis
on value addition and processed agricultural goods, is a necessary component of the "Made in
India" initiative. Scientists and policymakers are being pushed to revaluate how we produce
and feed the world's 7.5 billion people as a result of the fast expanding global population,
diminishing farmland, changing socioeconomic, agro-climatic, and nutritional patterns.
India's goal is to trade freely, advance peacefully, and expand sustainably. There are many
difficulties, including weak infrastructure, unstable international prices, and limited market
access. It would take a number of interventions to increase production and productivity,
improved price realisation for farm products, combined with lowering the cost of production,
in order to achieve Prime Minister Shri Narendra Modi's goal of doubling farmer income by
2022. In India, the necessity for a focused agricultural export policy has long been
recognised. The federal and administrative structure of the Union and State governments
creates a requirement for a specific policy under the Department of Commerce's broad
purview. When it comes to production, pre-harvest, and increasing farmer income, the
Departments of Agriculture, Cooperation, and Farmer Welfare and Animal Husbandry,
Dairy, and Fisheries focus on these areas, respectively.

1
(India and World Trade Organization (WTO), 2022)
India’s agricultural export policy vision is to “Harness export potential of Indian agriculture,
through suitable policy instruments, to make India global power in agriculture and raise
farmers income.”2

ELEMENTS OF AGRICULTURE EXPORT POLICY

The policy recommendations in this report are organized in two broad categories:
strategic and operational.

Strategic – 1. Policy Measures

2. Infrastructure and Logistics Support

3. Holistic Approach to boost exports

4. Greater involvement of State Governments in Agri Exports

Operational – 1. Focus on Clusters

2. Promoting Value added exports

3. Marketing and promotion of “Brand India”

4. Attract private investments into production and processing

5. Establishment of Strong Quality Regimen

6. Research & Development

7. Miscellaneous

STRATEGIC RECOMMENDATIONS

1. Policy Measures: Discussions with public and private stakeholders across the
agricultural value chain highlighted certain structural changes that were
required to boost agricultural exports. These comprise of both general and
commodity specific measures that may be urgently taken and at little to no
financial cost. The subsequent gains, however, are aplenty.
A. Stable Trade Policy Regime: Given the domestic price and
production volatility of certain agricultural commodities, there has
been a tendency to utilize trade policy as an instrument to attain short
term goals of taming inflation. Such circumstantial measures are often
product and sector specific, for instance, the ad- hoc ban or
imposition of Minimum Export Price (MEP) for onion and non -

2
(Agriculture Export Policy, n.d.)
 Basmati rice exports. This breaks export supply chains and affects
India's image as a reliable suppliers affecting price realization for
Indian produce. The country is seen as a sour ce of high quality
agricultural products and changes in export regime on ground of
domestic price fluctuations, religious and cultural belief can have
long term repercussions.

The Agriculture Export Policy thus aims at:

1) Providing assurance that the processed agricultural products and all

kinds of organic products will not be brought under the ambit of any
kind of export restriction (viz. Minimum Export Price, Export duty,
Export bans, Export quota, Export capping, Export permit etc.) even
though the primary agricultural product or non-organic agricultural
product is brought under some kind of export restrictions.
2) Identification of a few commodities which are essential for food
security in consultation with the relevant stakeholders and Ministries.
Any export restriction on such identified commodities under extreme
price situation will be based on decision of a high level committee.
Also, any kind of export prohibitions and restrictions on the identified
commodities above would be taken up in a WTO compat ible manner.
3)Liberalised import of agricultural products for value addition and re -
export.

2) Reforms in APMC Act and streamlining of mandi fee: Agricultural

Produce Marketing Committees (APMC) Acts across States have not
been able to achieve the farmers' welfare envisaged in these Acts.
Some APMC market yards or mandis which have bred inefficiency and
cartelization are a classic case in point. Since decades farmers have
been under compulsion to sell their produce in official market yards
which may or may not offer the best remunerative prices. Monopoly of
the APMC prevents private players from setting up markets and
investing in market infrastructure.
The market fee, arthiya commission and other charges left outside the
Goods and Services Tax (GST) remain u nder the purview of the state
(and local bodies). Different States continue to charge different fees on
mandi procurement

2. 2. Infrastructure and logistics : A good agricultural value chain requires a solid

infrastructure to function. This calls for pre - and post-harvest handling facilities,
storage and distribution, processing, and road infrastructure of the highest
calibre, as well as world-class exit points at ports that facilitate quick commerce.
The foundations on which India may grow its agricultural e xports are mega food
parks, cutting-edge testing facilities, and integrated cold chains. Because most
food goods are perishable and subject to strict import regulations, timely and
effective handling of agricultural commodities is crucial. There will be a
thorough need-gap study of the value chain's existing export -oriented
infrastructure. Ports serve as a catalyst for economic growth. Yet, even though
port expansion would boost exports, the agri sector won't experience a notable
boost unless supply, qualit y, handling, and hinterland connectivity are all
improved. In order to significantly increase commerce, it will be helpful to
identify strategically significant clusters, build interior transportation links, and
dedicate agro infrastructure at ports with r ound-the-clock customs clearance for
perishables.

3. Holistic approach to boost exports : Supply-side variables, food

security, processing capacity, infrastructure bottlenecks, and various laws
all affect agricultural exports. There are numerous ministries involved in
this, including DAC&FW, DAHDF, Food Safety and Standards Authority
of India (FSSAI), Department of Agricultural Research and
Education/Indian Council of Agricultural Research (ICAR), MoFPI,
Ministry of Shipping & Transport, Ministry of Railways , Ministry of Civil
Aviation, Department of Consumer Affairs (DoCA), and Department of
Food and Public Distribution (DFPD). Also, a significant number of the
infrastructural problems managed by state governments have a negative
impact on agricultural exports. Important organisations involved in
agricultural production will be required under agricultural export policies
to make extra efforts to promote exports. In order to bring export -oriented
technologies to farmers and raise their awareness of the potenti al for
exports, Krishi Vigyan Kendras would be involved.

4. Greater involvement of State Governments in Agriculture Exports :

Agriculture in India has enjoyed the distinction of being a State subject
since 1919, when the Montford Reforms proclaimed it a "Pro vincial"
subject, and after independence, when the constitution was drafted, it
became a "State" subject. State governments are ultimately responsible for
the proper implementation of agricultural and market infrastructure
changes, even though the federal government may offer guidance and allot
cash.
Every State invariably has a unique combination of priorities,
socioeconomic and political realities, and agricultural specifics that it
works to fit with the general objectives of the country. Indeed, each Sta te
 suffers from the whims of nature in extremes; agricultural exports; and each
has a unique (and frequently several) agro -climatic zone leading to varied
cropping patterns.

OPERATIONAL RECOMMENDATION
1. Focus on cluster : Horticultural exports require substantial quantities of identical-
variety, high-quality produce with uniform specifications that meet import
requirements. India's small landholding patterns and low farmer awareness have
frequently resulted in low volumes of numerous crop varieties with little to no
uniformity. The creation of export-focused clusters across States will be essential for
securing excess produce with uniform physical and quality standards that satisfy
export demands. Infrastructure provided by the State Government will determine the
outcome of this plan. Therefore, it is crucial that the Indian Government supports and
motivates the State Governments through improving State infrastructure in order to:
Support Farmer Producer Associations, identify suitable production cluster through
conducting farmer registration, digitising land records, and more (FPO)

2. Promoting value added exports : By marketing and branding of organic products

and developing uniform quality and packaging standards for organic and ethnic
products and organic products in North East

3. Attract private investments in export oriented activities and infrastructure :

The logistical movement of agricultural produce is supported by post-harvest
infrastructure. Increasing export volumes, guaranteeing quality, and ensuring greater
price realisation per unit are all directly correlated with this. The following are a few
of the advantages:
Higher calibre compliance: Produce can be processed after harvest to extend its shelf
life and preserve its quality for export to far-off markets. Examples include waxing
fruits, irradiating meat, and sifting out poor or damaged product.
Facilitates efficient logistic handling: Ensures better handling of produce, reduces
wastage, and increases the amount of marketable excess. Additionally, this will
result in greater price realisation (advantages in both value and volume), boost
volume handling capacity, and present chances for growing the sourcing/catchment
area.

4. Digitization and ease of doing business (EODB): Digitising farmer land records at
the farm level The implementation of a successful agricultural export programme
depends on the geo-mapping of lands, the digitization of land records, and the
registration of farmers and farm producer organisations (FPOs). In order to legalise
tenancy, maintain land records, and map lands using satellite technology, the Central
Government has been collaborating with the States to carry out extensive campaigns
that link these data to farmer AADHAR cards. This is crucial for establishing
traceability, creating market connections, and stopping the leaking of public monies.
Consolidation and aggregation of land holding for export-oriented cultivation will be
made easier by the successful implementation of such digitization.
HOLISTIC APPROACH TO BOOST EXPORT
Supply-side variables, food security, processing capacity, infrastructure bottlenecks, and
various laws all affect agricultural exports. There are numerous ministries involved in this,
including DAC&FW, DAHDF, Food Safety and Standards Authority of India (FSSAI),
Department of Agricultural Research and Education (DARE)/Indian Council of Agricultural
Research (ICAR), MoFPI, Ministry of Shipping & Transport, Ministry of Railways, Ministry
of Civil Aviation, Department of Consumer Affairs (DoCA), and Department of Food and
Public Distribution (DFPD). Also, a significant number of the infrastructural problems
managed by state governments have a negative impact on agricultural exports. Agricultural
export policy will involve important organizations related to agricultural
production to make special efforts towards promotion of export. Krishi Vigyan Kendras
will be involved to take export oriented technology to farmers and create awareness
among farmers about export prospects. Pesticide and chemical residues are a chief cause of
concern for Indian agricultural exports. Indian food exports are sometimes rejected due to
residues found that are higher than Maximum Residue Limit (MRL) of importing nations.
From Basmati to grapes to peanut - the list is long. Lack of awareness amongst Indian
farmers regarding the judicious and timely use of chemicals has been a major impediment.

FINDINGS
 A foundation for sustainable agriculture and a workable agriculture export policy go
hand in hand in a symbiotic connection. A policy that will put money in farmers' pockets
by maximising important export potential must be developed.
 A stable and predictable agriculture export policy that strives to revitalise the entire value
chain, from export-focused agricultural production and processing to transportation,
infrastructure, and market access, is something that the Government of India increasingly
needs to implement.
 The Agricultural Export Policy is designed with an emphasis on output that is export-
oriented, export promotion, greater farmer realisation, and coordination with other
Government of India policies and programmes. For increased income through value
addition at the source, which will help to reduce losses across the value chain, a
"Farmers' Centric Strategy" is necessary.
 India must have a farmer-focused policy if it is to attain the twin goals of global
prominence in agriculture exports and food security. The policy will also significantly
boost food manufacturing and processing, resulting in a considerably higher growth in
food production and an increase in India's share of processed goods with added value in
its agricultural exports on a worldwide scale.

CONCLUSION
The agricultural economy of India will not grow to its full potential without agribusiness
growth. The paradigm change in the Indian agriculture economy is as a result of the increased
emphasis on export. It is moving away from market-based agriculture and towards a
production-based economy. According to a study, India has a huge potential for agricultural
exports, particularly of rice and spices. A new agricultural export policy could lay the
groundwork for Indian agriculture to become competitive internationally. In order to foster a
healthy environment for agribusinesses that will encourage greater investment, innovative
abilities, intellectual property safeguards, and other factors, stimulate healthy competition
between the States according to the ease of doing agricultural business index. The Transport
Marketing Aid Plan aims to increase brand recognition for Indian agricultural products in the
specified overseas markets while reducing the burden of a higher cost of transportation for
export of recognised agricultural products owing to transhipment. India has favourable
agroclimatic conditions and a variety of agricultural products for export. The fact that fewer
farmers are involved in the export chain is one of the main reasons why India's export share
in the global market is quite low. Thus, agricultural export clusters can fill the gap between
farmers and the industries that export agricultural products. As a result, creating export
clusters at the district level is a much-needed and positive step. There are a number of
potential causes of low productivity that ultimately have a negative impact on export
competitiveness, including the land-man ratio, land degradation, inadequate credit and
marketing infrastructure, modern farming techniques, traditional agricultural methods,
inadequate irrigation infrastructure, a lack of high-yielding variety seeds, small farms, poor
agricultural practises, and low investment. Land reforms, education, land-water resources,
microcredit, marketing infrastructure, better irrigation, a supply of high-quality seeds,
intercropping, scientific cultivation, good agricultural practises, investment flow,
strengthening basic infrastructure, and participation of qualified experts in the supply chain
are all potential solutions to increase productivity.

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1.htm

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industry-india

4. C. H. Hanumantha Rao, & Gulati, A. (1994). Indian Agriculture: Emerging

Perspectives and Policy Issues. Economic and Political Weekly, 29(53), A158–A169.
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