Why in News?

Between 2013-14 and 2024-25, India’s agricultural exports grew modestly by just over 20%, rising from $43.3 billion to $51.9 billion. In contrast, agricultural imports surged by 148% during the same period, from $15.5 billion to a record $38.5 billion. This sharp rise in imports has led to India’s farm trade surplus shrinking significantly—from $27.7 billion to $13.4 billion.

Notably, in 2024-25 alone, agri-exports rose 6.4%, outpacing the flat overall export growth, while farm imports jumped 17.2%, far above the 6.2% rise in total merchandise imports.

These trends unfold as India negotiates FTAs with the US and EU, both of which are pushing for lower tariffs and greater access to Indian markets for their agricultural products.

What’s in Today’s Article?

• Key Export Drivers
• Export Setbacks
• Interesting Case of Spices
• Major Agricultural Imports
• Trade Agreements and Future Implications

Key Export Drivers

• Marine Products
  • It is India’s top farm export, but earnings declined from $8.1 billion in 2022–23 to $7.4 billion in the next two years.
  • Major markets include the US (35%), China (20%), and EU (15%).
  • Concern: US tariffs (17.7%) on frozen shrimp could rise further, affecting competitiveness.
• Rice Exports at Record Highs
  • Combined basmati (6.1 mt) and non-basmati (14.1 mt) rice exports hit $12.5 billion in 2024–25.
  • Markets: Basmati to West Asia; non-basmati to Africa.
• Growth in Other Segments
  • Record-high exports of:
    • Spices: Especially chilli, cumin, turmeric, mint, etc.
    • Tobacco: Boosted by crop failures in Brazil and Zimbabwe.
    • Coffee: Higher demand due to global shortage; India mainly exports robusta beans and powder.
    • Fruits & Vegetables: Both fresh and processed saw growth.

Export Setbacks

• Wheat and Sugar
  • Exports peaked recently but are now restricted due to domestic shortages.
  • Wheat peaked at $2.1 billion (2021–22).
  • Sugar peaked at $5.8 billion (2022–23), with only white sugar exports continuing—processed from imported raw sugar.
• Cotton Collapse
  • India was once a major cotton exporter (over $4.3 billion in 2011–12), but exports have collapsed, turning India into a net importer.
• Buffalo Meat
  • Recovered to $4 billion in 2024–25 but still below the 2013–15 levels of $4.4–4.8 billion.

Interesting Case of Spices

• In 2024–25, India witnessed record highs in both spice exports and imports.
• While it remains a leading exporter of non-traditional spices like chilli, cumin, turmeric, mint products, oleoresins, and curry powders, it has become a net importer of traditional plantation spices—pepper and cardamom.

Major Agricultural Imports

• Vegetable Oils & Pulses Dominate Imports:
  • India’s top farm imports remain edible oils and pulses.
  • Pulses imports reached a record $5.5 billion in 2024–25.
  • Low yields and absence of MSP-backed procurement have deterred domestic expansion.
  • Oilseed exports (mainly groundnut and sesame) and residual meal provide only partial offset.
• Rising Imports Due to Domestic Production Challenges
  • Cotton
    • Production has declined from 398 lakh bales (2013–14) to 291 lakh bales (2024–25), owing to stagnant yields and lack of innovation post-GM Bt hybrids.
  • Natural Rubber
    • Annual production averaged 8.5 lakh tonnes in recent years, down from 9–9.1 lakh tonnes a decade ago, while consumption has surged to 15 lakh tonnes.
  • Other Notable Imports
    • Fruits and Dry Fruits - Includes almonds, pistachios, walnuts, apples, dates, figs, and raisins.
    • Spices - Mainly pepper and cardamom, which India now imports more of despite being a major spice exporter.
    • Alcoholic Beverages - Imports of wines and spirits continue to grow, with potential for further rise under new trade deals.

Trade Agreements and Future Implications

• The signing of trade agreements with the US, EU, and UK is expected to increase India’s imports of dry fruits, wines, and spirits.
• Additionally, the US may push for lower import duties and relaxed non-tariff barriers on genetically modified (GM) crops like maize, soybean, and cotton.
• These changes could significantly impact India’s agricultural trade balance, potentially reducing the current surplus.