India’s agriculture trade surplus shrinks as exports grow modestly by 6.5% to $37.5 billion while imports surge 18.7% to $29.3 billion. Falling exports of marine products, sugar, and wheat, coupled with rising pulses, edible oils, and cotton imports, intensify structural challenges, reducing competitiveness and necessitating strategic investments. Plus urgent reforms.
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India’s agriculture trade surplus is shrinking due to a combination of factors where the growth in agricultural imports outpaces that of exports.
Agricultural exports increased by 6.5% from $35.2 billion (April–December 2023) to $37.5 billion (April–December 2024), exceeding the 1.9% growth in overall merchandise exports.
Agricultural imports surged by 18.7% from $24.6 billion to $29.3 billion in the same period, driven by rising demand for pulses, edible oils, and cotton.
The trade surplus narrowed from $10.6 billion in April–December 2023 to $8.2 billion in the corresponding 2024 period.
Decline in Major Export Commodities:
Marine Products exports fell from $8.1 billion (2022–23) to $7.4 billion (2023–24), with frozen shrimp (65% of marine exports) facing potential U.S. tariffs.
Sugar exports halved from $5.8 billion (2022–23) to $2.8 billion (2023–24), while wheat exports collapsed due to government restrictions aimed at ensuring domestic availability.
The UN Food Price Index (2014–16 = 100) dropped from 119.1 (2013–14) to 96.4 (2019–20), reducing India’s export competitiveness. Post-pandemic and Ukraine war disruptions temporarily inflated prices (peaking at 140.6 in 2022–23), but easing prices since 2023–24 have moderated export growth.
Export bans on wheat (2022), broken rice (2022), and sugar (2023) to curb domestic inflation and ensure food security have directly impacted revenue.
Import Growth
Edible oil imports are expected to reach near-record levels ($19–20.8 billion) due to persistent reliance on imports for domestic demand.
Pulse imports surged to over $5 billion in 2023–24 after a poor domestic harvest, reversing earlier declines from increased production.
India shifted from a major exporter to a net importer, with cotton imports surging 84% to $918.7 million (April–December 2024) due to declining domestic yields.
India is a net importer of pepper and cardamom, despite being a top exporter of chili and other spices. Imports of these commodities exceeded exports in 2023–24.
The surplus peaked at $27.7 billion in 2013–14 but fell to $8.1 billion by 2016–17 due to low global prices and rising imports. It rebounded to $20.2 billion in 2020–21 during the global price recovery but is now declining again.
Structural Challenges
Low Productivity: Indian farm yields lag global averages due to inefficient practices and fragmented landholdings.
Monsoon Dependence: Climate variability and poor irrigation infrastructure make production vulnerable to droughts or floods.
Post-Harvest Losses: Inadequate storage and supply chains reduce exportable surplus.
Invest in irrigation, technology, and seeds to reduce reliance on imports for pulses and edible oils.
Develop cold storage and port facilities to minimize post-harvest losses and streamline exports.
Avoid abrupt bans; instead, use quotas or tariffs to balance domestic needs with export growth.
Focus on high-value crops (e.g., fruits, vegetables) and expand markets in Africa and Southeast Asia.
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