Answer: The agriculture sector in India has experienced buoyant growth in the recent past. India’s agricultural exports touched a new peak($50+ bn) in the financial year 2022-23. But so are imports($35 bn), bringing down the overall farm trade surplus.

Challenges in promoting agricultural exports

• Export Policy Restrictions: India's export policies prioritize domestic consumers over farmers that hinders the achievement of export targets.
• For example, the recent setting of MEP of USD 1,200 restricts basmati rice exports, causing a potential sharp decline in exports.
• Subsidy-Driven Schemes: Populist measures like increased subsidies, such as food and fertilizer subsidies by Centre and states like Punjab, Haryana can strain the financial stability of the agricultural sector.
• Inadequate R&D Investment: India's investment in agriculture R&D is limited, at around 0.5% of the agricultural GDP, which is insufficient to drive significant growth.
• As per Economic Survey 2022, every rupee spent on agricultural R&D yields much better returns (11.2) compared to returns on every rupee spent on fertiliser subsidy (0.88) or power subsidy (0.79).
• Quality and Standards: Variability in quality and compliance issues can hinder exports. Meeting Sanitary and Phytosanitary (SPS) Measures of Western countries is a significant challenge.
• Infrastructure: Inadequate infrastructure for storage, transportation, and processing can lead to post-harvest losses, reducing the competitiveness of Indian agricultural exports.
• Competitiveness: India faces competition from other countries in the global agricultural market and being competitive in terms of pricing and quality is essential.
• Exchange rate fluctuations also affect the competitiveness of Indian agricultural exports.

Steps Ahead for Stable Agri Exports

• Infrastructure development: There is a need to invest in cold storage, transportation and logistics to reduce post-harvest losses and enhance export competitiveness.

• Subsidy of 50% under ‘Operation Greens – TOP to Total’ for  transportation of fruits and vegetables; long term debt financing facility under Agriculture Infrastructure Fund are some of the steps taken by government.

• Expand India’s export basket: Diversification of agri export basket, reducing dependency on few commodities is needed. In recent times, marine products, rice, and sugar have been the driving forces behind India's agricultural exports.

• For example, Organically certified moringa leaves powder, Red rice, Carrot seeds etc have been added to agri export basket for Central Asian and South East Asian countries.
• Quality Assurance: Implementation of strict quality standards is needed to ensure that exported agricultural products meet international norms. 
• For example, Product specific Export Promotion Forums (EPF) for eight high potential agri products is initiated under APEDA.
• Farmer’s Welfare & their direct involvement in exports: Prioritize the welfare of farmers and ensure that they are active stakeholders in the export of their produce. 
• For example, a Farmer Connect Portal has been set up on APEDA’s website for providing a platform for FPOs and cooperatives to interact with exporters.