Agriculture plays a vital role in India’s economy. More than 58 percent of rural families rely on agriculture as their primary source of income. Agri commodities exporters play a significant role in building a nation’s economy.
Agriculture, fisheries, and forestry are a few of the largest contributors to the Gross Domestic Product (GDP).
As per estimates by the Central Statistics Office (CSO), the share of agriculture and allied sectors (including agriculture, livestock, forestry, and fishery) was 15.35% of the Gross Value Added (GVA) during 2015–16.
Agricultural export constitutes 10% of the country’s exports and is the fourth-largest exported principal commodity.
The agro-industry in India consists of several sub-segments such as canned, dairy, processed, frozen food to fisheries, meat, poultry, basmati rice, non-basmati rice, wheat, edible oil and many other food grains.
However in the global trade, the share of India is only close to 2% to achieve the true potential and export a large share of Indian production, there is an immediate need to address the export challenges.
There is a need to attain an economic scale of production, cost competitiveness, build adequate storage distribution infrastructure, and technological interventions to have a substantial share in the global market.
Some challenges being faced by the Agri commodities exporters in India, and the probable solution for the same are mentioned below –
Key Challenges for exports –
- The backward integration in India is inefficient and unorganized, resulting in quality and longevity issues.
- From the export perspective, the importing nations are becoming more and more stringent for the production norms/ traceability at the farm level.
- Lack of synergy between the state and central government as agriculture is a state subject, while the state’s role for exports is undefined.
- Lack of awareness of existing schemes and policies related to exports.
- The connectivity of the land-locked production areas to the ports or terminals is a stiff challenge even the link roads from farms to the main road are underdeveloped in most of the states.
- Delay in the Transport Assistance and long waiting hours create a lot of congestion at the ports.
- The scheme affects the working capital cycle of the exporters as the exporters consider TAS while determining the final selling price.
- SAARC nations/neighboring nations fail to qualify for TAS, though; the transport cost when transported through frozen containers is higher than the transportation cost through normal containers to other nations.
- Backward connections must be developed to assist agri exporters and minimize farm waste.
- Currently, the wastages account for: F&V- 4.6 -15.9%, Inland fish- 5.2%, Marine fish-10.5%, Meat- 2.7 %, Poultry- 6.7 %.
- State governments must go forward and proactively support exports from their respective states.
- Participation of other concerned departments facilitating trade at the workshops.
- Since the transportation cost of perishables from landlocked states is very high, a provision to include interstate movement in the TAS can be considered with suitable ceilings such as minimum distance/quantity/value/ commodity.
- Hinterlands connectivity is an efficient multimodal transportation system that needs to establish in a phased manner with more focus on developing the dedicated corridors.
- The introduction of technology in loading/unloading/packaging.
- Increase capacity and provision for exports from airports of tier 2 & 3 cities after viability assessment with the airport authority.
- Green channel to be created at main ports (Consideration of Vol/value) to boost the export of perishables (JNPT, Kandla).
- As per the exporters, subsidy (TAS) should be released within 2-3 months post-application.
- Timely allocation of funds by the central government will smoothen up the process.
- Transporting supplies to SAARC countries through refrigerated containers could be conceivable with TAS.
- A separate criterion for chilled/ frozen products should be developed for neighboring nations to qualify for TAS.
- To tap the potential of Indian rice in major rice-consuming regions of the world, long-term promotional plans need to be designed and carried out.
- Rebranding of Basmati rice in the global markets such as Saudi Arabia, Iran, Iraq, UAE, and others to maintain the market share and curb the competition.
- Digital platforms are the new way of Agri Commodities procurement. They are very easy and secure for the Agri exporters and importers.
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