India signs deals with 8 countries for farm exports, looks for more markets

india

Updated: Apr 28, 2018 22:56 IST

India has signed deals with eight countries, the United States, Canada, Chile, Ecuador, South Korea, Malaysia, Taiwan and Iran for agricultural exports and is scouting for more markets, as it seeks to liberalize trade in farm products, and grow its farm exports.

India has also filed market access requests for 35 agricultural products with over a dozen countries, an official familiar with the development said on condition of anonymity.

The country has concluded discussion on phytosanitary certification for Indian mangoes with Iran.

Phytosanitary certification is a formal declaration by an exporting country guaranteeing that shipments are free of pests and plant diseases, and meet the requirements of the importing country.

Similar deals have been signed with Taiwan, which will allow exports of Indian lily bulbs.

Canada has cleared Indian mangoes, grapes, pomegranate, banana, litchi, papaya, custard apple and okra for export. Chile has approved coconut fibre and walnut. South Korea and Malaysia too have agreed to buy Indian mangoes. Equador is the latest country to clear Indian rice.

Read | IMD forecast of normal monsoon may temper economic, political risks

According to a new farm export framework that’s in the works, the government is looking to moderate its strategy of placing frequent restrictions on agri-exports to tame domestic consumer prices.

The plan is to curb commodity exports only in extreme situations and to boost farm income from trade. The government has promised to double farm incomes by 2022.

Agriculture minister Radha Mohan Singh recently tweeted about increasing the value of agricultural exports to $100 billion by 2022-23. The Dalwai Committee Report on doubling farmers’ incomes also talks about freeing up farm exports.

India’s agricultural exports grew five times from about $8.7 billion in 2004-05 to $42.6 billion during 2013-14. This however fell to $33 billion in 2016-17. The country’s net exports (i.e. exports minus imports or the agricultural trade surplus) fell to $7.8 billion in 2016-17.

Read | Why a normal monsoon is crucial for Indian economy, 2019 general election

In 2016-17, marine products, meat and rice together made up 52% of India’s agri-export basket. India also exports spices, cotton, fresh fruits and vegetables, sugar, coffee, groundnut, oilmeals and cashews, which together with marine items, rice and meat comprised over 80% of the agri-export basket in 2016-17. According to farm economist Ashok Gulati, in farm exports, the “biggest hurdle comes from uncertain domestic marketing and trade policies” which he says must be addressed.

New export hubs for horticultural produce – fresh fruits and vegetables – are being opened in smaller cities as part of the strategy to provide direct global access to local farmers. “Trial shipments were recently sent from Varanasi and Guwahati. The Agricultural and Processed Food Products Export Development Authority, in association with our ministry, has identified 70 districts as potential export hubs,” agriculture secretary SK Pattanayak said.

Shipments to Dubai from Varanasi contained chilli from Uttar Pradesh. Pineapples were sent from Guwahati and oranges from Meghalaya and Arunachal Pradesh. Both Varanasi and Guwahati now have complete infrastructure for exports, including phytosanitary certification.

In a boost for mango exports, the US has agreed to transfer requirements of pre-shipment inspection to Indian plant quarantine authorities starting in 2019. The US has also agreed to bear the cost of inspection of mango shipments by US personnel, which will bring down the cost of exports, an agriculture ministry official said.