Brief Context
Context Despite India’s active negotiations of Free Trade Agreements with global partners, the agriculture sector, vital to its economy and employment, remains largely excluded. Why Agriculture is Missing from India’s FTAs? Fear of Import Surge: Entry into FTAs like RCEP was abandoned over concerns that cheap agri imports, especially dairy from New Zealand and Australia, would hurt Indian farmers.
Source Content
Syllabus: GS/ Economy, Agriculture
Context
- Despite India’s active negotiations of Free Trade Agreements with global partners, the agriculture sector, vital to its economy and employment, remains largely excluded.
Why Agriculture is Missing from India’s FTAs?
- Fear of Import Surge: Entry into FTAs like RCEP was abandoned over concerns that cheap agri imports, especially dairy from New Zealand and Australia, would hurt Indian farmers.
- Agriculture is a State subject, whereas trade is in the Union list. This leads to inconsistent policies — bans, export quotas, or quarantine rules — harming exporter confidence.
- Infrastructural Deficiencies: Absence of cold chains, agro-processing hubs, and efficient port logistics, especially in landlocked states limits agricultural trade potential.
- Indian agricultural exports suffer from quality issues like pesticide residues, aflatoxins, and weak compliance with global SPS (Sanitary and Phytosanitary) norms.
Efforts taken by other countries
- Thailand: Thailand’s agri-export success is driven by its focus on industrial crops like rubber, strong agro-processing linkages, and over 18 FTAs that enhance market access and boost value-added exports.
- Brazil: It leveraged mechanised farming, logistics corridors, and value addition in soy, coffee, and meat to reach $166 bn agri exports.
India’s Existing Strengths
- Basmati Rice: India’s agricultural strength lies in its globally recognized products such as Basmati rice, which alone contributes to around 21% of the country’s agricultural exports.
- GI-Tagged Products: Gaining visibility under schemes like One District One Product (ODOP).
- Agricultural and Processed Food Products Export Development Authority (APEDA) works towards quality promotion and certification, though more integration with smallholder farmers is needed.
How to make Indian Agriculture FTA-Ready?
- Shift from Commodities to Branding & Value Addition and develop agro-processing clusters near APMCs.
- Promote branded products and niche categories like organic, GI-tagged, or processed food.
- Institutional Reforms: Create a National Agricultural Trade Council with Centre-State-industry coordination.
- Ensure single-window clearances and digital export compliance.
- Infrastructure and Logistics: Invest in inland container depots, cold storage, and rural logistics in landlocked states.
- Agri-Investment Strategy: Move from input subsidies to Direct Benefit Transfers (DBT) to incentivise diversification and innovation.
Efforts taken by India
- The Agri Export Policy of 2018 is a comprehensive initiative by the Indian government to boost agricultural exports and integrate Indian farmers into global value chains.
- The Agricultural and Processed Food Products Export Development Authority facilitates certification, market intelligence, export promotion, and capacity-building programs for stakeholders.
- Initiatives like the Paramparagat Krishi Vikas Yojana (PKVY) and National Programme for Organic Production (NPOP) aim to tap into growing global demand for chemical-free, sustainable produce.
- Negotiation of Market Access: India continues to engage in bilateral and multilateral negotiations to reduce tariff and non-tariff barriers for its agricultural goods and secure preferential market access.
Concluding remarks
- India’s cautious approach to agriculture in FTAs safeguards farmer interests but also restricts the sector’s export potential.
- Moving forward, a balanced strategy with targeted reforms can help integrate Indian agriculture into global markets more effectively.
Source: DH