India just approved a new policy with the aim of doubling agricultural exports by 2022

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• The Indian government has approved a new policy to double agricultural exports to $60 billion by 2022, the same year by which it intends to double farmer incomes.
  
• Under the policy, all restrictions on the export of organic and processed food items will be lifted. These include mandi (wholesale) taxes, minimum export prices, duties and quota restrictions.
  
• Not only will this help farmers tap into foreign markets better, but will stabilise export flows and improve relations with trade partners.
  
• The policy will also involve a number of initiatives such as the standardisation of agricultural produce, the development of supply chains and shipping infrastructure, the amendment of conflicting regulations and investment in R&D.
  

Prime Minister Narendra Modi has always stressed that one of his administration’s key priorities is to boost farmer incomes, the progress on which has been hindered by persistently low retail food prices.

With this in mind, on 6 December, his Union Cabinet approved a new policy to double agricultural exports to $60 billion by 2022, the same year by which it intends to double farmer incomes, and make India one of the world’s 10 largest agricultural exporters.

The move follows a wave of farmer protests in India with the goal of obtaining better prices and a waiver of farm loans.

Under the policy, all restrictions on the export of organic and processed food items will be lifted. These include mandi taxes, which are fees levied on the sale of produce that vary from state to state, minimum export prices, duties and quota restrictions. In addition, perishable exports will be granted single-window clearance.

Not only will this help farmers tap into foreign markets better, but will stabilise trade flows and improve relations with partners as export bans and duties often tend to be a sticking point during trade negotiations. In the past, the Indian government has instituted export bans on certain food items in response to soaring domestic demand.

The policy will also involve a number of initiatives such as the standardisation of agricultural produce, the development of supply chains and shipping infrastructure, the amendment of conflicting regulations and investment in logistics and technology to make smallholder-farmers trade-ready.

India’s agricultural exports, which roughly comprise a tenth of the country’s overall merchandise exports, are currently dominated by three items: basmati rice, meat and marine products. In an attempt to diversify India’s exports, the central government will invest ₹14 billion to merge a variety of export incentive schemes and set up specialised export-focused clusters in a number of agricultural strongholds in India.

There will be clusters dedicated to tea, coffee, bananas, mangoes, pomegranates and spices like turmeric, Suresh Prabhu, the Union Minister of Commerce and Industry, told media outlets. To ensure quality control in terms of production, logistics and distribution, a programme called “Brand India” will also be set up with the participation of state governments and private investors.

Each state will also be expected to establish a specific department that will be tasked with implementing the agricultural export policy.

One of the major aims envisioned under the policy is too boost the export of value-added items and to cause a shift in India’s current practice of exporting residual produce and make it become a producer of commodities that are exclusively for the export market.


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