Why in news?

India’s agricultural exports have grown significantly faster than its overall merchandise exports. In April–September 2025, farm exports rose by 8.8%, reaching $25.9 billion, compared to $23.8 billion in the same period of 2024. This growth far outstripped the 2.9% increase in total goods exports during the same period.

The trend is consistent with the previous financial year (2024–25), when agricultural exports increased by 6.4% (from $48.8 billion to $52 billion), while overall merchandise exports saw only a marginal 0.1% rise.

What’s in Today’s Article?

• Key Drivers of India’s Export Growth
• Global Food Prices as the Main Driver
• Outlook for 2025–26: Prices and Tariffs to Shape Performance
• Rising Farm Imports Outpace Overall Import Growth

Key Drivers of India’s Export Growth

• Strong Performance by Major Agri-Export Segments - India’s agricultural export growth in 2025-26 has been led by non-basmati rice, buffalo meat, marine products, coffee, and fruits & vegetables — each surpassing or nearing previous record levels.
• Non-Basmati Rice: Growth After Lifting of Export Curbs - Export buoyancy is largely due to the removal of restrictions imposed in 2022–23 to contain food inflation. With good monsoons and high government stocks, non-basmati rice exports are on track to exceed the record $6.5 billion achieved last year.
• Buffalo Meat: Set to Break Decade-Old Record - Buffalo meat exports may surpass the 2014-15 peak of $4.8 billion, supported by rising demand in key markets.
• Marine Products: Rising Despite Trump Tariffs - Marine product exports rose 17.4% in April–September 2025 and could exceed the historic $8.1 billion (2022-23). Despite the 58% U.S. tariff, exports grew from $3.4 billion to $4 billion, as exporters diversified into China, Vietnam, Japan, Thailand, EU, and Canada.
• Coffee Exports: Driven by High Global Prices - Coffee exports more than doubled from $739 million (2019-20) to $1.8 billion (2024-25) and may exceed $2 billion this year. The rise is driven mainly by soaring global prices as ending stocks fall to a 25-year low, rather than higher volumes.
• Fruits & Vegetables: Consistent Growth in Fresh and Processed Form - Both fresh and processed fruits & vegetables continue steady export growth.

Global Food Prices as the Main Driver

• The FAO Food Price Index declined from 119.1 (2013-14) to 90 (2015-16), stayed below 100 until 2019-20, then shot up to 102.4, 133.1, and 140.6 in the next three years.
• As global prices softened afterward, India’s farm exports also dipped to $48.8 billion (2023-24) and $52 billion (2024-25).
• Export clampdowns on wheat, rice, sugar, onions, and de-oiled rice bran — imposed to control domestic inflation — further contributed to the fall in shipments.

Outlook for 2025–26: Prices and Tariffs to Shape Performance

• Export performance for the second half of 2025-26 will hinge on:
  • Global Commodity Prices
    • FAO index in October 2025 was 126.4, far below the 2022 post-Ukraine peak of 160.2.
    • Subindices for cereals (103.6) and sugar (94.1) hit multi-year lows.
    • Low global prices usually depress India’s agri-export value.
  • Trump Tariffs
    • US tariffs have begun to hurt: Marine products (26.9%); Spices (45.1%); Basmati rice (17.8%) (September YoY to the US)
• Signs of Improvement: Tariff Rollback and Possible Trade Deal
  • There are positive developments:
    • A potential India–US trade deal may materialise before year-end.
    • The US President has rolled back tariffs on several food products — including spices, coffee, tea, and fresh fruits — directly benefiting Indian exporters.

Rising Farm Imports Outpace Overall Import Growth

• India’s agricultural imports grew 5.9% in April–September 2025 (from $18.4 bn to $19.5 bn), outpacing overall imports, which rose 4.5% during the same period.
• Unlike exports, India’s farm imports are not diversified and remain dominated by just a few commodities, primarily:
  • Vegetable oils
  • Pulses
  • Fresh fruits
  • Raw cotton
• Vegetable Oils: India’s Top Import Item
  • Vegetable oil imports soared 13.5% in April–September 2025.
  • Imports are likely to approach the record $20.8 bn level of 2022–23.
  • This remains India’s single largest agricultural import.
• Pulses: Imports Decline After Previous Surge
  • Pulses imports hit an all-time high of $5.5 bn in 2024–25.
  • In 2025–26, they have fallen sharply due to:
    • A bumper domestic crop
    • Reimposition of import duties lifted earlier during high inflation.
• Fresh Fruit Imports Expand Rapidly
  • Fresh fruit imports crossed $3 bn in 2024–25.
  • April–September 2025 imports were $1.5 bn.
  • The US is now the dominant supplier, accounting for 50.4%, thanks to high demand for:
    • Almonds
    • Pistachios
    • Walnuts
    • Other dry fruits
• Raw Cotton: India Turns Net Importer
  • India has shifted from being a net exporter to a net importer of raw cotton.
  • Imports are expected to exceed $1.5 bn this fiscal.
  • The key reason: domestic yield stagnation due to the absence of new technologies post-Bt cotton.