Trends and performance of India's agricultural trade in the midst of COVID-19 pandemic

ABSTRACT

Agricultural sector has played an important role in the economic development of the country not only by earning precious foreign exchange by exporting agricultural commodities but also for achieving the goal of an Aatmanirbhar Bharat. The present study attempts to analyse the trends and performance of agricultural trade during 1990-91 to 2020-21, with the last year coinciding with the COVID-19 pandemic. Based on secondary data. the study highlights that despite of COVID-19 pandemic, agricultural exports from India increased from Rs.253976 crore in 2019-20 to Rs.305469 crore in 2020-21 and net agriculture export surplus has also increased to Rs.147681 crore in 2020-21 from Rs.105530 crore in 2019-20, registering a growth of 20.75 per cent and 39.94 per cent, respectively compared to the previous year. Further, exports of agri-products registered a 35.76 per cent increase in the first quarter (April-June) of 2021-22 as compared to the same period in 2020-21 due to reasons such as on higher overseas demand. The main drivers of increase in agri-exports in 2020-21 were wheat, vegetable oils, other cereals, non-basmati rice and molasses and during first quarter of 2021-22, other cereals, meat, dairy and poultry products, cereal preparations, miscellaneous processed items, oil meals and marine products. Agri-imports in the first quarter of 2021-21 also grew, being highest for vegetable oils, followed by fruits and vegetables and cotton raw and waste in comparison to the same period in 2020-21. The largest markets for India's agricultural products are USA, China, Bangladesh, UAE, Vietnam, Saudi Arabia, Indonesia, Nepal, Iran and Malaysia. The study also revealed that share of agricultural exports to agricultural gross value added (GVA) increased from 3.88 per cent in 1990-91 to 8.48 per cent in 2020-21. While the share of agricultural imports to agricultural GVA decreased from 6.54 per cent in 2016-17 to 4.36 per cent in 2020-21 indicating decreased dependence on import of agricultural products in India. During 1990-91 to 2020-21, agri-exports grew (13.99 per cent) less than the agri-import (16.85 per cent). However, agriculture trade grew more than the total merchandise trade in the country. These results have important policy implications. Emphasis needs to be given for diversification of agricultural exports for more products and more destinations with improved infrastructure, trained human resources and support facilities to move up the value chain and meet international standards like sanitary and phytosanitary measures, etc. The efficiency at production level needs to be raised in order to make the product price competitive in the international market. The producers and exporters need to be educated and trained to maintain the quality of the products as per global standards.