Global Crises & Domestic Policies Cause 9% Decline in Agricultural Exports to $43.7 Billion

Key Highlights

• India's agricultural exports dropped by 9% to $43.7 billion in April-February 2023-24.
• Global crises like the Red Sea crisis and the Russia-Ukraine conflict contributed to the decline.
• Domestic restrictions on key materials added to the export downturn.
• Basmati rice exports surged by 22% to $5.2 billion, showcasing resilience.
• India's alcoholic beverages sector showed growth potential, reaching $180 million in exports.

India's agricultural exports faced a significant setback, dropping by 9% during the April-February period of 2023-24. Various global and domestic factors played a role in this decline.

Global Influences

The Red Sea crisis, coming from tensions in the Middle East, and the Russia-Ukraine conflict were major global events affecting India's agricultural exports. These crises disrupted trade routes and increased uncertainties, impacting export volumes and prices.

Also Read: Relief for Farmers: Government Subsidy for Pesticide Spraying

Domestic Challenges

Domestic restrictions on key commodities such as rice, wheat, sugar, and onions added to the export decline. Export bans and limitations on these products led to significant losses estimated at $5-6 billion in the last fiscal year. The Indian government imposed restrictions on the export of certain agriculture products to ensure domestic availability and stabilize prices, further dampening export figures.

Impact on Agricultural GDP

India's agricultural GDP growth slowed to 0.7% in 2023-24 from 4.7% in the previous fiscal year. This slowdown reflects the challenges faced by the agricultural sector amidst global and domestic uncertainties. The reduced agricultural GDP growth underscores the broader economic implications of the export decline.

Also Read: Crops Damaged by Rain in These States, Farmers to Receive Compensation

Basmati Rice Shines

Despite the overall decline, some commodities showed positive growth. Basmati rice exports surged by 22%, reaching $5.2 billion during April-February 2023-24. This growth highlights the resilience of certain segments of agricultural exports and their ability to navigate challenges in the global market.

Alcoholic Beverages Market

India witnessed growth in the export of alcoholic beverages, particularly premium Indian brands. Despite the overall export decline, India's alcoholic beverages sector showed promise. However, India's share in the global alcoholic beverages market remains relatively small, standing at $180 million, ranking 40th globally. Efforts to increase market penetration and enhance competitiveness are crucial for further growth in this sector.

Looking Ahead

Officials are closely monitoring developments, including the Israel-Iran conflict, for potential impacts on exports. Despite challenges, sectors like fresh fruit, meat, and processed vegetables showed positive growth, indicating opportunities for the agricultural export sector to rebound. Policy measures aimed at addressing both global and domestic challenges, coupled with efforts to promote key export sectors, are essential for revitalizing India's agricultural export landscape and ensuring sustainable growth in the future.

Also Read: Compensation for Crop Loss: Relief for Farmers on the Way

CMV360 Says

India's agricultural exports faced a significant 9% decline to $43.7 billion during April-February 2023-24, attributed to global crises and domestic restrictions. Despite challenges, segments like Basmati rice showed resilience. Efforts to monitor geopolitical developments, address domestic constraints, and promote key export sectors are essential for revitalizing India's agricultural export landscape and ensuring sustainable growth.