Making Indian agriculture ready for global trade

Source: The post Making Indian agriculture ready for global trade has been created, based on the article “Fortify agri export framework” published in “Financial Express” on 17 May 2025. Making Indian agriculture ready for global trade

UPSC Syllabus Topic: GS Paper3-Agriculture- marketing of agricultural produce and issues and related constraint

Context: India’s Free Trade Agreement with the UK and ongoing negotiations with the EU have created a rare opportunity to deepen global trade ties. However, the real challenge lies in enabling Indian agriculture to benefit from these agreements.

For detailed information on India’s Agriculture Exports read this article hy

India’s Agricultural Strengths and Export Gaps

1. Strong Production, Limited Export Share: India is among the world’s top producers of rice, wheat, pulses, fruits, vegetables, spices, cotton, milk, and eggs. Yet, its agri-exports account for only 2.2% of global trade, as most output meets domestic demand.
2. Green Revolution Impact: The Green Revolution turned India from a food-deficit country into one with over 50 million tonnes of buffer stocks. But sustaining farmer incomes now needs global market access.
3. FTAs and Market Access Trade-Offs: India must provide market access for agri and livestock products of trade partners. In return, Indian farmers need enhanced access, which depends on food safety compliance and effective trade promotion.

Challenges in Meeting Global Food Standards

1. Stringent and Expanding Regulations: High-value markets like the EU demand compliance not just with residue limits but also traceability, labelling, sustainability, and production practices. Developing markets too are upgrading standards due to health awareness.
2. Low Traceability in Supply Chains: Small exporters often source from mandis without proper traceability. Rejections increase when food safety norms are not met, and credible root cause analysis is often missing.
3. Weak Digital Support Systems: Digital platforms exist but lack real-time, commodity- and market-specific intelligence. Exporters struggle to access timely regulatory updates or guidance.

Institutional Gaps and Policy Incoherence

1. Fragmented Governance Structure: Agriculture, livestock, marine products, food processing, food safety, pesticides, and trade fall under different ministries and bodies. This causes policy contradictions.
2. Conflicting Regulations: For example, while the commerce ministry negotiated for higher tricyclazole tolerance, the agriculture ministryproposed banning it. Similar conflicts occurred with mancozeb and ethylene oxide (ETO) regulations.
3. Delayed Response Mechanisms: Even when embassies provide advance alerts, India’s fragmented system reacts slowly. This delays compliance and weakens global rule-shaping ability.

Trade Promotion Deficiencies

1. Event-Based Promotion Strategy: Agencies like APEDA and MPEDA focus on expos and buyer-seller meets. Unlike countries such as Australia or Thailand, India lacks permanent trade centres abroad for sustained engagement.
2. Limited Buyer Intelligence: Trade agencies do not offer structured market feedback or monitor global trends consistently, weakening buyer relationships.
3. Need for Exporter-Led Bodies: Most export councils are government-led. Countries with exporter-led bodies show better agility and accountability in trade responsiveness.

Reforms and the Way Forward

1. Create a Unified Coordination Mechanism: India needs a technically equipped body that integrates agriculture, marine, and livestock sectors. It should coordinate market access and compliance with continuity.
2. Invest in Systems, Not Just Infrastructure: Cold chains and logistics are necessary but not sufficient. India must embed technical experts, improve digital tools, and strengthen regulatory clarity.
3. Adopt Global Best Practices: Ecuador’s QR-code-based traceability system and Kenya’s Flower Council are models. India can also learn from Dutch partnerships on export capacity-building.
4. Establish Commodity-Specific Export Platforms: For products like rice, tea, spices, and marine goods, India should build export bodies that engage year-round with global buyers.
5. Encourage Private Sector Leadership: Shifting to exporter-driven institutions can improve accountability and market agility, making India more competitive globally.

Question for practice:

Examine the key challenges and necessary reforms for enabling Indian agriculture to benefit from Free Trade Agreements with developed markets.