India's Agricultural Exports Decrease 8.8% Amid Export Restrictions

India's agricultural exports have decreased by 8.8% year-over-year to $43.7 billion in the April-February 2023-24 period, primarily due to export restrictions on commodities like rice, wheat, sugar, and onions. The decrease was largely across regulated commodities, while exports of unregulated products like fresh fruits, vegetables, basmati rice, and cashew nuts saw growth.

The export ban and restrictions on critical items have hit agricultural exports by about $5-6 billion in the last fiscal year. Factors like the Red Sea crisis and the Russia-Ukraine war have also contributed to the decrease. India's agricultural GDP witnessed a significant deceleration, growing by only 0.7% in 2023-24, down from 4.7% in 2022-23.

Why this matters: The decrease in agricultural exports has broader implications for India's economy and its farmers. As a major agricultural producer, India's export restrictions and the resulting decrease in exports can impact global food supply chains and prices. It also highlights the challenges faced by the agricultural sector in India, which employs a significant portion of the country's workforce.

Despite the overall decrease, some products have shown positive growth. Exports of basmati rice increased by 22% in value terms, from $4.2 billion in April-February 2022-23 to $5.2 billion in April-February 2023-24. Fresh fruit, buffalo meat, and processed vegetables have also recorded growth.

To boost agricultural exports, the government plans to promote 20 agricultural products outside the regulatory framework. The Agricultural and Processed Food Products Export Development Authority (APEDA) is working on detailed plans for these products, which include fruits, vegetables, basmati rice, and processed foods. The government aims to capture a 4-5% market share in the global $400 billion market for such products.

India's agricultural food exports in the 2023/24 financial year fell slightly short of the previous year, hitting about $50 billion. "The decrease in agricultural exports was attributed to factors like the Red Sea crisis, Russia-Ukraine war, and domestic restrictions imposed on critical items like rice, wheat, sugar, and onion," an official stated. However, efforts to diversify shipments to the US, Europe, and other markets helped offset some of the impact.

Key Takeaways

• India's agricultural exports declined 8.8% to $43.7B in Apr-Feb 2023-24.
• Export bans on rice, wheat, sugar, onions cost $5-6B in FY2023.
• Basmati rice, fresh fruits, veggies saw growth despite overall decline.
• Govt plans to promote 20 agri-products to capture 4-5% of $400B market.
• FY2023/24 agri-exports fell slightly to $50B due to crises, domestic curbs.