CURRENT STATUS OF INDIA’S AGRICULTURAL TRADE

• Agriculture exports rose 6.4% to $51.9 billion in 2024-25.
• Imports rose sharply by 17.2%, reaching $38.5 billion.
• Trade surplus shrunk from $27.7 billion in 2013-14 to $13.4 billion in 2024-25.
• Longer-term growth: Exports grew by 20% since 2013-14; imports rose by 148%.

IMPACT OF FREE TRADE AGREEMENTS (FTAS)

• India is negotiating FTAs with the US, EU, and UK.
• These countries seek:
  • Tariff reductions
  • Greater market access for their farm products
• Expected result: More imports, possibly shrinking the trade surplus.

KEY EXPORT DRIVERS

• Top agri-exports (>$1 billion/year): Marine products, rice, spices, tobacco, coffee, fruits & vegetables.

▪️ Marine Products

• Fell from $8.1 billion (2022-23) to $7.4 billion.
• Major destinations: US (35%), China (20%), EU (15%).
• US import duties may increase from 17.7% to 26%, affecting shrimp exports.

▪️ Rice (Basmati & Non-Basmati)

• Reached record value of $12.5 billion in 2024-25.
• Basmati exports to West Asia; non-basmati to Africa.

▪️ Spices

• India is a top exporter of chilli, cumin, mint, turmeric, and more.
• However, net importer of pepper and cardamom.

▪️ Coffee & Tobacco

• Gained from poor harvests in Brazil, Vietnam, and Zimbabwe.
• Coffee stocks globally at 25-year low, boosting exports.

▪️ Declining Exports

• Wheat, sugar, and cotton affected by domestic shortfalls.
• Wheat and sugar exports restricted.
• Cotton has turned from export commodity to net import.

KEY IMPORT DRIVERS

• Major imports: Vegetable oils, pulses, fruits, spices, alcoholic beverages.

▪️ Vegetable Oils & Pulses

• Low yields and weak procurement systems limit domestic production.
• Pulses imports hit $5.5 billion in 2024-25, an all-time high.

▪️ Cotton & Rubber

• Cotton output fell from 398 lakh bales (2013-14) to 291 lakh (2024-25).
• Rubber production stagnated at 8.5 lakh tonnes, while demand rose to 15 lakh tonnes.

▪️ Fruits, Spices & Beverages

• Rising imports of dry fruits, wines, and spirits.
• Pepper and cardamom are imported despite being traditional Indian crops.

WHAT FTAS COULD BRING

• More imports of:
  • Dry fruits (almonds, pistachios, etc.)
  • Alcoholic beverages
  • GM crops like maize, soybean, and cotton
• Likely pressure to reduce import duties and non-tariff barriers.

CONCLUSION

• FTAs with major economies could:
  • Exacerbate import pressures
  • Affect local farmers and price stability
  • Further shrink India’s farm trade surplus
• The impact will depend on how these agreements are negotiated and implemented.