Even as India produces the second-highest amount of agricultural produce in the world, the country does not appear in the list of top 10 agri exporters. India is a world leader in many significant agriculture categories and has a competitive advantage over other countries due to diverse agro-climatic conditions and relatively low cost of labour and manufacturing. However, despite India’s global advantage in terms of hectares of arable land, it significantly lags smaller countries in exports ($) per hectare, mostly due to low yields and farm productivity; low focus on value addition; and large domestic market.
The recent growth rates show that agri-food production is rising faster than growth in domestic demand, and volume of the export surplus is rising. Also, India’s processed exports have been steadily improving, but still has a higher global share of raw commodities than processed goods. This offers scope and opportunity for capturing overseas markets to earn foreign exchange and enable producers to earn higher prices for farm produce.
India exports 70 per cent of its agricultural exports to 20 countries. While India imports over $20 billion in agriculture products, it still maintains a significant trade surplus of $18 billion.