India’s Agricultural Exports Surge Amid Global Challenges

India’s agricultural exports have grown faster than its overall merchandise exports in 2025. From April to September, farm produce exports rose by 8.8% to $25.9 billion. This outpaced the 2.9% growth in total goods exports. The 2024-25 financial year also saw farm exports increase by 6.4%, compared to just 0.1% growth in all merchandise exports. The rise is driven by key commodities like non-basmati rice, buffalo meat, marine products, coffee, and fruits and vegetables.

Growth Drivers of Agricultural Exports

Non-basmati rice exports surged after export restrictions were lifted in 2024. Earlier curbs included bans and export duties to control domestic food inflation. Good monsoons and ample stockpiles helped boost shipments beyond the previous record of $6.5 billion. Buffalo meat exports are also nearing historic highs, potentially surpassing $4.8 billion. Marine products saw a 17.4% increase in the first half of 2025, with exports possibly exceeding the $8.1 billion peak of 2022-23. Coffee exports more than doubled since 2019-20, driven by higher global prices despite modest quantity growth. Fruits and vegetables exports have steadily increased in both fresh and processed forms.

Challenges from Global Prices and Tariffs

India’s farm exports have fluctuated over the past decade, mirroring global commodity price trends. The Food and Agriculture Organization’s (FAO) food price index peaked after the Ukraine conflict but eased in 2025. Lower global prices for cereals and sugar have dampened export growth. Export restrictions on wheat, rice, sugar, onions, and other items also affected volumes. US tariffs imposed during the Trump administration have hit exports of marine products, spices, and basmati rice. However, Indian exporters have diversified markets, increasing shipments to China, Vietnam, Japan, and the EU. Recent US tariff rollbacks on spices, coffee, tea, and fresh fruits may ease trade tensions.

Import Trends in Agricultural Commodities

India’s agricultural imports grew by 5.9% in the first half of 2025, outpacing overall import growth of 4.5%. Vegetable oils dominate imports, rising 13.5% and nearing the $20.8 billion peak of 2022-23. Pulse imports declined due to a strong domestic crop and reimposed import duties. Fresh fruit imports have expanded, with the US supplying over half of the $1.5 billion imported in early 2025. India has become a key market for US almonds, pistachios, and walnuts. Raw cotton imports have surged as India faces domestic production shortfalls, reversing its previous exporter status.

Market Diversification and Policy Impact

Indian agricultural exports show resilience through market diversification. Despite tariff barriers in the US, exporters have tapped alternative markets. Government export controls aimed at inflation management have periodically restricted shipments but helped stabilise domestic prices. The potential India-US trade deal could further ease export challenges. Import patterns reflect domestic supply-demand gaps and strategic sourcing from key partners like the US.

Questions for UPSC:

1. Taking example of India’s agricultural export growth, discuss the role of government policies in balancing domestic food security and international trade.
2. Examine the impact of global commodity price fluctuations on developing countries’ export economies with reference to India’s agricultural sector.
3. Analyse the significance of market diversification for Indian exporters in the face of international trade barriers, using the US tariffs on marine products as a case study.
4. Critically discuss the challenges and opportunities in India’s agricultural import patterns, particularly in relation to vegetable oils and raw cotton, in light of domestic production constraints.

Answer Hints:

1. Taking example of India’s agricultural export growth, discuss the role of government policies in balancing domestic food security and international trade.

1. Export restrictions (bans, duties) on key commodities like non-basmati rice were imposed to control domestic inflation and ensure food availability.
2. Gradual easing of export curbs post good monsoons and ample stockpiles helped revive export growth without threatening domestic supply.
3. Inflation-containment policies led to temporary clampdowns on wheat, sugar, onions, and rice exports, balancing trade and food security.
4. Government stock management in godowns supported buffer stocks to stabilize domestic markets while enabling export planning.
5. Policy flexibility allowed responsiveness to global price trends and domestic needs, ensuring both export growth and food security.
6. Potential India-US trade deal and tariff rollbacks show government’s role in negotiating favorable trade terms alongside domestic priorities.

2. Examine the impact of global commodity price fluctuations on developing countries’ export economies with reference to India’s agricultural sector.

1. India’s farm export values closely track FAO food price index movements, rising with high global prices and falling when prices drop.
2. Price volatility leads to export value fluctuations, e.g., collapse from $43.3 billion (2013-14) to $32.8 billion (2015-16) due to price drops.
3. Global crises (e.g., Ukraine war) caused price spikes, temporarily boosting export earnings for India’s agricultural commodities.
4. Declining global prices for cereals and sugar in 2025 dampened export growth despite steady volumes.
5. Developing countries face risks of export revenue instability due to dependence on volatile commodity markets.
6. Export restrictions are sometimes used to shield domestic markets when global prices fall or domestic inflation rises.

3. Analyse the significance of market diversification for Indian exporters in the face of international trade barriers, using the US tariffs on marine products as a case study.

1. US tariffs (over 58% effective) on marine products challenged India’s largest seafood export market.
2. Despite tariffs, India’s marine exports grew overall by 17.4% in early 2025, showing resilience.
3. Exporters shifted focus to alternative markets – China, Vietnam, Japan, Thailand, EU, and Canada to offset US losses.
4. Market diversification reduced dependence on a single market, cushioning impact of protectionist trade measures.
5. Recent US tariff rollbacks on other food items indicate dynamic trade relations and potential easing of barriers.
6. Diversification enhances bargaining power and long-term sustainability of export sectors amid geopolitical uncertainties.

4. Critically discuss the challenges and opportunities in India’s agricultural import patterns, particularly in relation to vegetable oils and raw cotton, in light of domestic production constraints.

1. Vegetable oils dominate imports, rising 13.5% in early 2025, nearing record highs due to domestic demand outpacing supply.
2. Raw cotton imports surged as India shifted from net exporter to importer, caused by production shortfalls and lack of new yield technologies.
3. Import dependence poses risks of price volatility and foreign exchange outflows but fills critical domestic supply gaps.
4. Sharp decline in pulse imports due to bumper domestic crop and reimposition of import duties reflects government’s protective measures.
5. Growing fresh fruit imports, especially from the US, show evolving consumer preferences and trade complementarities.
6. Opportunities exist to improve domestic productivity, reduce import dependence, and leverage imports for value addition and processing industries.