Questions on agricultural trade.



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Table of Contents

Introduction. 2

Discussion. 2

Agricultural condition in India. 2

Imposition of agricultural trade by the Indian Government 2

Development of strategies related to Agriculture trade, helpful in effective outcome. 2

Conclusion. 2

Reference List 3





Being an agrarian economy India and its agricultural policies are much more strictly imposed by the Indian government than most of the developing countries out there. Around 54% of the land areas are considered to be arable land and hence such a big exporter of so many good quality crops across the world (Renjini and Kar, 2019). The present report would attempt to have an elaborative discussion on the agricultural trade policies imposed by the Indian government and identify issues in each trade policies and then effectively develop strategic solutions for the trade policies to have an effective and better outcome for the country’s agricultural system.


Agricultural condition in India

The majority of the country’s GDP is earned and is protected by the agriculture industry of India. Various commodities such as cotton, fruits, vegetables, rice, or even dairy products are some of the important elements that help the agricultural arena to participate and contribute to the national economy of India (De Roy, 2017). The high monsoon dependences of Indian agricultural development are another aspect that needs to be remembered. Poor and the declining infrastructures, heavy government regulations, inefficiency in the way the food distributions are conducted in the country, have caused declining yields from all the agricultural farm’s and even below the world average (Jagdambe and Kannan, 2020). From a traditional farming to a horticulture and stock farming process transitions is also something that is seemingly apparent in the country, where the urban population have heavily influenced the government regulations, and how the production of yields is done from the agricultural sectors in India (Godar et al. 2019). According to the Directorate General of Foreign Trade, Ministry of Agriculture & Farmers Welfare, the total exportation of agricultural commodities in the year of 2019 has been $31 billions way less than it was in 2018, with $39.4 billions. The importing activities have also experienced some declining performances such as in 2018 India was able to import $24.6 billions whereas in 2019 it came down to $22.7 billions (Green et al. 2017).


Imposition of agricultural trade by the Indian Government

One of the biggest producers and exporters, India exports their cotton to a massive amount where occasional import of medium and small staple cotton is also conducted. Between the USA and India, the cotton has been supplied by the US for years and they are considered to be one of the biggest suppliers of cotton to India. In the year 2019, the total cotton supplies from the US to India has been estimated to be $587 million (Bureau, Guimbard and Jean, 2019). Other major cotton suppliers for India other than the US are Australia, West Africa and even Egypt. In terms of the condiments and sauces, India imports that in large amount too, larges suppliers that supply con dements to India are Malaysia, China, Thailand or other European countries (Bisena and Kumar, 2018). Importation of fresh fruits in India is consistently growing with the increasing aspect of urban population and that the Indian consumers are forcing the Indian government to import fresh fruits from countries like the USA; In 2019, the total fruits import was estimated to be $62 million. This states a significant decline in that market share due to the imposition of tariffs imposed on apples from 50% to 70%, something that happened as a form of retaliation for USA’s imposition on steel and aluminium (Beckman, Dyck and Heerman, 2017).

Being one of the world’s largest producers, consumers and also exporters, India is able to have a wide range of pulses production, and the annual imports range $3.9 million to $7 million. Canada, Myanmar, Russia, China, Australia, and even the USA are some of the biggest importers to India (Thomas and Sanil, 2019). The higher priced green and yellow peas, lentils and beans such as garbanzo from the USA has been always in large amounts and the imports have reportedly reaching a record amount of 370,000 metric tons. However, with that it is also important to note that with the recent agricultural trade restrictions on the importation, the imports from the USA has drastically declined and by the end of 2019, with the Indian government’s impositions of restrictions something that had blocked out of-quota imports and sharply declined the pulses imports, accordingly. Besides that, India for having one of the largest tractor markets across the world, around 35% of the global production (Rosa et al. 2019). This does lead to the developments of largest market segment in terms of the tractor industry in India, and with the developments of much more efficient ones, the old tractors are duly replaced and with that the traditional farming is efficiently adopting methods, where use of other powered equipment. With the federal governments and their renting policies, the tractors rental services are provided for better agricultural operations across the country (Renjini and Kar, 2019).

With the laying out of ambitious goals, to ensure that the farmer oncomes are doubles by 2022, the Indian government has set out on an aggressive promotion, and also ensuring that the funding on the rural agricultural development is setting conducted consistently without any serious interventions. 52% of the total agricultural lands being unirrigated in India, the country and its agricultural system is heavily dependent on the rainfalls and the monsoon season (Raychauduri, De and Gupta, 2020). The Indian government is also having a consistent agricultural trade policy that allow the other countries to import irrigation equipment and energy efficient irrigation products that are highly affordable because of the involvement of the Indian government something that had allowed the government to effectively explore the business opportunities in India (Murugesan, 2019). In terms of the Agri-tech and implementation of AI have also been skyrocketing because of the involvement of investments that have been conducted by the Indian government especially focusing and concentrating on the Agri-tech sectors. This has been one of the aspects of trade exchanges that happened with the imposition of Indian government on how they outsource their technologies in the agricultural sector (Martin, 2018).

Development of strategies related to Agriculture trade, helpful in effective outcome

With the changes in the domestic policies, the agricultural trade in India has severely been changed. A shift towards the policies for liberalisation and globalisation and the implication have caused a major change in terms of the agricultural trade for India (Jagdambe and Kannan, 2020). Several groupings of the countries are unifying trade blocks something that would mutually benefit in the proves of trading in agricultural sector of India, something that would lead into the development of the trade agreements such NAFTA and SAFTA and also EEC and ASEAN trade agreements; where SAFTA free trade agreements and South Asia association of regional cooperation have more universal coverage, where the improvements of countries agreeing to their covenants have been some of the biggest developments (Godar et al. 2019). The aspect of promoting diverse agricultural system would raise and yield high value crops, something that would potentially lead to the overall development of linkages and connections with the agro-processing industries and esports, something that helps with the improvements of the agricultural system of India (Green et al. 2017). This kind of strategic implementation would also help create relevant infrastructures that is associated with the agricultural trade in India. Having a union of all the countries that have a successful trading habits and are able to have clear exchanges of trades are able to access resources and with that certainty of agricultural developments would increase in a great manner (De Roy, 2017). These kinds of strategic implementation on the trade policies would lead to a development of better agricultural models; something that would lead to the development of better tariff imposition by the Indian government and better agrarian exchanges of agricultural commodities between countries (Bureau, Guimbard and Jean, 2019). A heavy concentration of yielding high end varieties of seeds and pulses would help India to effectively have much cost-effective production and yet export the same to the other countries and then effectively improve their national GDP. Having been investigate and reviewed by the World Trade Organization, where the agricultural tariffs of 36.5% which is consider ed to be one of the highest is to be strategically reduced for better imports (Bisena and Kumar, 2018). The domestic compulsion to protect agricultural producers have also bene some of the biggest strategic changes that could be effective for the overall developments in terms of the agricultural trade changes. In terms of the Trade facilitation agreement, a peace clause and strategic changes the peace clause something that allowed the developing countries such as India to effectively exceed their subsidy threshold (Beckman, Dyck and Heerman, 2017).


With the proposed strategic changes in the agricultural trade systems, the developing countries like India is able to improve their trade reputation, something that would potentially develop an eventual growth in national economy, national GDP, and an overall improvement of agricultural trade policies, this leads to the improvements of the land irrigation, comprehensive trade policies and an overall refinements of both trade policies and the overall improvement of successful strategic implementation (Renjini and Kar, 2019). With the consistently heavy concentration of yielding high end varieties of seeds and pulses would help India to effectively have much cost-effective production and export the same to effective improvement of the agricultural system of the country.

Reference List

Beckman, J., Dyck, J. and Heerman, K., 2017. The global landscape of agricultural trade, 1995-2014.

Bisena, J. and Kumar, R., 2018. Agricultural marketing reforms and e-national agricultural market (e-NAM) in India: a review. Agricultural Economics Research Review31(347-2018-5157), pp.167-176.

Bureau, J.C., Guimbard, H. and Jean, S., 2019. Agricultural trade liberalisation in the 21st century: Has it done the business?. Journal of agricultural economics70(1), pp.3-25.

De Roy, S., 2017. Economic reforms and agricultural growth in India. Economic and Political Weekly52(9), pp.67-72.

Green, J.M., Croft, S.A., Durán, A.P., Balmford, A.P., Burgess, N.D., Fick, S., Gardner, T.A., Godar, J., Suavet, C., Virah-Sawmy, M. and Young, L.E., 2019. Linking global drivers of agricultural trade to on-the-ground impacts on biodiversity. Proceedings of the National Academy of Sciences116(46), pp.23202-23208.

Jagdambe, S. and Kannan, E., 2020. Effects of ASEAN-India Free Trade Agreement on agricultural trade: The gravity model approach. World Development Perspectives19, p.100212.

Martin, W., 2018. A research agenda for international agricultural trade. Applied Economic Perspectives and Policy40(1), pp.155-173.

Murugesan, B., 2019. An Empirical Analysis of Agricultural Exports on Economic Growth in India. Economic Affairs64(3), p.295561.

Raychauduri, A., De, P. and Gupta, S. eds., 2020. World Trade and India: Multilateralism, Progress and Policy Response. Sage Publications Pvt. Limited.

Renjini, V.R. and Kar, A., 2019. Asean-India free trade agreement: Analysis of agriculture sector. Indian Journal of Agricultural Marketing33(3s), pp.38-45.

Rosa, L., Chiarelli, D.D., Tu, C., Rulli, M.C. and D’Odorico, P., 2019. Global unsustainable virtual water flows in agricultural trade. Environmental Research Letters14(11), p.114001.

Thomas, L. and Sanil, P.C., 2019. Competitiveness in spice export trade from India: A review. Journal of Spices & Aromatic Crops28(1).


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