Article:
India’s agricultural exports have seen a surge, demonstrating growth of 9.8% between April and December 2020, as per data released by the Ministry of Commerce and Industry. This comes in the wake of the Indian government introducing the Remission of Duties or Taxes on Export Product (RoDTEP) scheme, which replaced the Merchandise Exports from India Scheme (MEIS), aiming to boost exports even further.
Key Figures
The data for April through December 2020 reveals some interesting trends. While overall merchandise exports, which encompasses all goods manufactured in India, saw a 15.5% fall, farm exports bucked this trend with an impressive increase of 9.8%.
Factors Driving Growth in Farm Exports
The growth in farm exports can be attributed to several factors. The rising international prices of various goods, coupled with the normalisation of demand with the majority of countries lifting their lockdown restrictions and restoring supply chains post-Covid-19, has made many of India’s farm products competitive on a global scale.
Remarkable growth has been seen in the export of non-basmati rice, sugar, oilseed meals, cotton, wheat and cereals, particularly maize. These trends are supported by the United Nations (UN) Food and Agricultural Organization’s (FAO) Food Price Index for January 2021, which revealed a significant increase from a 48-month low to a 78-month high.
Impact of Chinese Stockpiling and Global Weather Conditions
Chinese stockpiling, intended to build strategic food reserves amidst geopolitical tensions, has also elevated global prices and boosted India’s farm exports. Moreover, adverse weather conditions in key producing nations like Argentina, Brazil, Ukraine, Thailand and Vietnam have contributed to this trend.
Countries such as Russia, the world’s top wheat exporter, and Argentina, a leading producer of soybean meal and maize, have announced temporary suspensions or taxes on grain shipments due to high domestic food inflation. This has opened up opportunities for Indian farm exports.
India’s Favorable Climate Conditions and Policies
India, conversely, has enjoyed favourable weather with surplus monsoon rainfall in 2019 and 2020, as well as timely winter onset. This has been advantageous for agricultural production.
The government’s decision to exempt agriculture-related activities from lockdown restrictions also played a role, enabling farmers to harvest a bumper rabi crop between April and June.
Significance of Rising Exports
Sustained growth in farm exports could have several positive implications. It might aid in increasing crop prices when the next rabi harvest comes due from March 2021. This could be politically beneficial amidst farmer unrest. Additionally, it will support India’s goal of achieving a $5-trillion economy and its ambitious target of doubling farmers’ income by 2022.
