Brief Context
In News India is negotiating trade agreements with the United States and European Union, which are both seeking tariff reductions and greater market access for their agricultural products. Status of India’s farm trade India’s agriculture exports rose by 6.4% to $51.9 billion in 2024–25, while overall goods exports remained nearly flat. However, agriculture imports surged by 17.2% to $38.5 billion, widening the trade gap.
Source Content
Syllabus :GS 3/Economy
In News
- India is negotiating trade agreements with the United States and European Union, which are both seeking tariff reductions and greater market access for their agricultural products.
Status of India’s farm trade
- India’s agriculture exports rose by 6.4% to $51.9 billion in 2024–25, while overall goods exports remained nearly flat.
- However, agriculture imports surged by 17.2% to $38.5 billion, widening the trade gap.
- Over the past decade, exports grew just 20%, while imports jumped 148%, causing the agri-trade surplus to shrink from $27.7 billion in 2013–14 to $13.4 billion in 2024–25.
Export Trends Productwise
- Marine exports from India are largely to the US (roughly 35% share), China (20%) and the EU (15%).
- Shipments to the US, predominantly frozen shrimps, now attract 17.7% duty.
- Rice (basmati and non-basmati) hit a record $12.5 billion, driven by strong demand in West Asia and Africa.
- Spices, tobacco, coffee, fruits & vegetables reached new highs.
- Coffee and tobacco exports rose due to poor global harvests.
- Exports fell for wheat, sugar, and cotton due to domestic supply issues and export restrictions.
- Cotton has seen a major decline, with India turning into a net importer.
- Buffalo meat exports exceeded $4 billion but are still below past highs.
Import Trends
- Vegetable oils and pulses are top import items due to low yields and lack of MSP support.
- Pulses imports hit a record $5.5 billion.
- Cotton and natural rubber imports rose as domestic production fell.
- Imports of fruits, spices (pepper, cardamom), and alcoholic beverages are also significant.
Impacts of Trade Agreements
- India’s upcoming trade agreements with the US, EU, and UK are expected to see increased imports of dry fruits, wines, and spirits.
- The Trump administration may also push for lower import duties and relaxed non-tariff barriers on GM crops like maize, soyabean, and cotton.
- These developments could impact India’s agricultural trade balance, potentially further shrinking the surplus.
Source :IE