The UAE was among the top five global markets for Indian basmati rice in the first nine months of the current financial year, the Indian government’s Agricultural and Processed Food Products Export Development Authority (APEDA) announced yesterday.

 

Of the other four lucrative markets, three are in the Middle East, namely, Saudi Arabia, Iran and Iraq. The fourth big market for this fine variety of rice is the US.

 

India’s fiscal year begins on 1st April. So, the period covered is from the beginning of April to the end of December 2023, for which official statistics are available.

 

During this nine-month period, the total worldwide exports of Indian basmati rice rose by 19 percent. In value terms, it rose to $3.97 billion from $3.33 billion during the corresponding three quarters of the previous year.

 

In volume, the exports went up by 11 percent, from 3.198 million metric tonnes to 3.543 million metric tonnes within the same timeframe.

 

'This robust performance underscores the enduring popularity and global demand for basmati rice, further solidifying its position as a major agricultural product in India's export portfolio,' APEDA said.

 

India's total agricultural exports in the fiscal year 2022-23, were worth $53.1 billion, APEDA said on the occasion of its 38th Foundation Day on 13th February.

Union Minister of Commerce & Industry, Consumer Affairs, Food and Public Distribution, and Textiles, Shri Piyush Goyal said that the present government’s ambition is to make India a fully developed nation by 2047 and all efforts are being made in this direction. While addressing a media delegation of 35 journalists from 19 countries of Latin American and the Caribbean in New Delhi today, Shri Goyal said that the government’s ambition is to increase the current $3.7 trillion economy to be a $30-35 trillion economy by 2047 and to ensure food and energy security of the nation.

 

Shri Goyal hailed Prime Minister Shri Narendra Modi’s relentless pursuit of twin tracks - strengthening the macroeconomic fundamentals of India to prepare the country for the future and focus on the welfare of the poor pertaining to food, healthcare and education. The Union Minister said that Prime Minister Shri Narendra Modi’s holistic vision to address the issues regarding welfare of the poor coupled with good governance over the last decade has helped India transform from the 11th largest to 5th largest economy in the world and is on track to become the 3rd largest GDP by 2027. 

 

Shri Goyal said that the current government has completed a turnaround of the macroeconomics of the country with the foreign currency reserves being 4th largest in the world, twice since 2014, and the currency is amongst the best performing in developing countries. Shri Goyal said that India has witnessed the best performing decade in the last 75 years of Independence with inflation being halved in the past 12 years that has benefited the economy with interest rates in control.

 

The Minister further said that the government inherited a broken economy when they came to power with a clear mandate in 2014. 'We inherited a broken economy, deep in distress and a poor reputation around the world for the India growth story and its ability to play a part in geopolitics', said Shri Goyal.

India has proposed a work programme at the World Trade Organization (WTO) to lower the cost of cross-border remittances for promoting international trade.

 

In a submission made on Tuesday, New Delhi said one of the means to achieve cheaper, faster and more transparent and accessible cross-border payments including remittances is 'promoting interoperability and interlinkages of digital payment infrastructures including fast payment systems'.

 

'Cost of remittance is an issue we have been raising. There is also a Sustainable Development Goal (SDG) on this,' said an official.

 

Lower transaction costs are key to reducing inequality within and among countries such as India since the global average cost for sending remittances is 6.18%, more than twice the SDG target. The SDG goal is to lower to less than 3% the transaction costs of remittances and eliminate remittance corridors with costs higher than 5% by 2030.

 

As per the submission, the global average cost for digital remittances at 4.84% is significantly lower than the cost for non-digital remittances and that out of total remittances of $860 billion in 2023, around 78% or $669 billion went to low- and middle-income countries. The Philippines and South Africa have also favoured such a work programme. The work programme should review the cost of cross-border remittances, trends and developments, and consider how technology, emergence of new market players, different types of providers and new channels, and consumer behaviour are impacting the cross-border remittance services, New Delhi said in its submission to the WTO.

The Agricultural and Processed Food Products Export Development Authority (APEDA), under the Ministry of Commerce and Industry facilitated the export of bananas from India to Russia via Sea by M/s. Gurukrupa Corporation Pvt. Ltd. a Mumbai-based exporter of fruits and vegetables regularly exporting fresh fruits and vegetables to the EU and the Middle East. 

 

A consignment of 20 MT (1540 boxes) of bananas was flagged off on 17th February 2024 from Maharashtra by Chairman, APEDA, Shri Abhishek Dev in a collaborative effort with the Central Institute of Sub-tropical Horticulture (CISH). APEDA highlighted the development of sea protocol employed for this shipment by CISH for maintaining the quality of fruit in transit.

 

Chairman APEDA encouraged more exporters to employ novel methods in shipping new products to new destinations, with APEDA supporting and facilitating these endeavors. He highlighted APEDA’s financial assistance scheme, which now is putting special emphasis on supporting women entrepreneurs. He applauded the contribution of CISH in the development of the sea protocols and congratulated all personnel for a successful flag-off.  

 

Recently, Russia has shown keen interest in the procurement of tropical fruits from India with bananas being one of them, which significantly is a major Agri import of Russia, which was presently, primarily being imported from Ecquador, in Latin America.

 

The major export destinations for Indian bananas include Iran, Iraq, UAE, Oman, Uzbekistan, Saudi Arabia, Nepal, Qatar, Kuwait, Bahrain, Afghanistan, and the Maldives. Additionally, the USA, Russia, Japan, Germany, China, the Netherlands, the UK, and France present India with abundant export opportunities.

 

The consignment was flagged off under the banner of M/s. Gurukrupa Corporation Pvt., Ltd, the women entrepreneurship is a prolific registered exporter of APEDA. M/s. Gurukrupa Corporation procured bananas directly from farmers of Andhra Pradesh. After harvesting, banana was brought to an APEDA approved packhouse in Maharashtra where it was graded, sorted, packed, boxed and stuffed in containers. The container was transported to JNPT for further voyage to Novorossiysk port, Russia for the final destination at Moscow Russia.

 

Banana is a major horticultural produce with Andhra Pradesh being the largest banana-producing state in India, followed by Maharashtra, Karnataka, Tamil Nadu, and Uttar Pradesh. These five states collectively contribute around 67 percent to India's banana production in the fiscal year 2022-23.

 

Despite being the largest global producer of bananas, India’s exports do not reflect this quantitative evaluation. India’s export share in the global market is only 1% even though the country accounts for 26.45 percent of the world's banana production (35.36 Million Metric Ton). In the fiscal year 2022-23, India exported bananas worth USD 176 million, equivalent to 0.36 MMT. 

 

Within the next five years, Banana exports from India are expected to achieve the target of 1 billion USD. This achievement will ensure an increase in farmers’ income and improve the livelihood of more than 25,000 farmers, and is estimated to generate employment for more than 50,000 aggregators directly or indirectly linked to the supply chain.  

 

The increase in the export of agricultural and processed food products is a result of various initiatives undertaken by APEDA to promote agricultural and processed food product exports, such as organizing B2B exhibitions in different countries, exploring new potential markets through product-specific and general marketing campaigns with the active involvement of Indian Embassies with special focus on natural, organic, and Geographical Indication (GI) tagged agro-products.

 

APEDA is making continuous efforts to promote exports of fresh fruits and vegetables. Continuous efforts in promoting exports of fresh fruits and vegetables especially to long-distance destinations, despite their perishable quality, by the development of sea protocols to retain their attributes is a key goal for APEDA moving forward. 

As India imports over 3 million tonnes (mt) of pulses annually even as production has jumped substantially, the Government sees the gap between demand and supply continuing. This is even as there is a further jump in production since the requirement of protein-based food will be rising with the economic growth targetted to reach $5 trillion in next few years.

 

Addressing the second day of Pulses 24, a three-day global event organised by the Global Pulse Confederation (GPC) in cooperation with cooperative major Nafed in New Delhi, Director-General of Foreign Trade (DGFT) Santosh Kumar Sarangi said in 2016-17 India had produced only 17 million tonnes (mt) of pulses, but it has surged to 25-26 mt now.

 

But, despite this substantial growth in pulses production, India has not been able to meet the gap between demand and supply, he said. He said the Prime Minister has set an ambition of reaching $5 trillion economy in the next couple of years from current $3.7 trillion.

 

Not far off

'Given the growth projection that we have had from IMF and our own Reserve Bank of India, it seems that a $5-trillion economy is not very far off. We should be able to do that,' Sarangi said. He said as and when India becomes the third largest economy, it will be a more prosperous country, an economy where people will have more purchasing power and this automatically means more demand for protein-based food.

 

'So in this context, India’s demand for wheat and wheat-products, plant-based protein, milk and dairy products, is going to exponentially increase,' Sarangi explained.

 

He also said that inspite of this growth in production, the rising purchasing power as well as the dietary habits of Indians, is making it imperative to meet the gap between demand and supply through higher imports.

 

The top official in foreign trade also said India has taken a series of steps to ensure that the protection of farmers’ interests are also calibrated and aligned with consumer interests of getting pulses at affordable rates.

 

Assurance to growers

'If you look at our pulses import, we have been importing in the range of 2.5 mt to 3 mt of pulses every year in the last couple of years. In the current year, we have already exceeded 3 mt of import. So this indicates that the pulses growing region in the world, whether it is African countries, Brazil Australia, Canada or Russia, all of them have a well defined destination in India as far as pulses are concerned,' he said.

 

So in this context, for those who are growing pulses, India has used its EXIM policy in a way, which gives an assurance to different pulses growing regions of the world about the policy certainty in India, he said. Sarangi also highlighted MoUs with three African countries, assuring them of a certain off take even if there are import restrictions in India. Besides, the government has extended the free import policy regime till March 31, 2025. 'This should give a fair deal of certainty to the growing regions to grow pulses and meet the demand in India,' he said.

These ties not only promote economic growth, but also overall development between the two nations. The Ministry of External Affairs (MEA), Government of India made these remarks in a press release published recently.

 

The trajectory of Indo-Bangladesh bilateral relationship shows how the two countries have accrued mutual benefits due to close ties. Consequently, Indo-Bangladesh ties have become a matter of significant importance in Bangladeshi domestic politics.

 

Initiatives for trade facilitation

 

The MEA said India has taken steps to facilitate trade with Bangladesh by improving infrastructure at border points and easing customs procedures.

 

Agreements like the Agartala-Akhaura rail link and the Petrapole-Benapole Integrated Check Post aim to facilitate the seamless movement of goods and people within the sub-region.

 

India provides duty-free access to a wide range of Bangladeshi products, including textiles and garments. New Delhi extends preferential treatment to Bangladesh through various trade agreements, fostering economic ties and benefiting both nations.

 

Both countries grant each other’s merchant vessels the most favoured nation treatment when entering, leaving, or staying at their ports, similar to how they treat vessels under the flag of any third country.

 

These agreements allow Bangladeshi exporters Duty-Free and Quota-Free (DFQF) access to 100 per cent tariff lines, except for alcohol and tobacco products which fosters economic cooperation and strengthens bilateral ties.

 

Boost in Bangladesh’s exports to India

 

Bangladesh is India’s biggest trade partner in South Asia. Conversely, India is the second biggest trade partner of Bangladesh. The bilateral trade between India and Bangladesh has steadily grown over the last decade.

 

In 2021-22, the trade volume reached $18.2 billion, compared to $10.8 billion in 2020-21.

 

Exports of Bangladesh have tripled over the last decade, crossing $1 billion in 2018-19.  These trade relations play a crucial role in enhancing economic cooperation and fostering stronger ties between the two neighboring countries.

 

Over the last 26 years, the exports of Bangladesh to India have increased at an annualised rate of 12.1 per cent, reaching $1.72 billion in 2021. India is the second-largest import source for Bangladesh, trailing only behind China.

 

Dhaka’s exports to India reached a total of $1,990 million in 2021-22, whereas imports from India amounted to $13.69 billion in the same period.

 

Currency settlement

 

India and Bangladesh have taken a significant step by agreeing to settle payments for their international trade partly in Indian rupee (INR). This move can reduce pressure on Bangladeshi dollar reserves and enhance trade efficiency.

 

Initially, trade settlements will occur in INR, with a later transition to Tk once the two Indian banks establish nostro accounts with Bangladesh's EBL and Sonali Bank. Sonali Bank and Eastern Bank Ltd will establish Rupee Nostro accounts with India's ICICI Bank and SBI.

 

Once this system starts functioning smoothly, other banks from both countries will be allowed to participate in this process. These interactions have paved the way for joint ventures, investment, and technology transfer.

 

In summary, the trade dynamics between India and Bangladesh continue to evolve, benefiting both nations and fostering economic progress. India’s conciliatory trade relations with Bangladesh have been instrumental in fostering economic cooperation and strengthening bilateral ties.

The government has decided to extend export benefits under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme for companies in the special economic zones (SEZs) and export oriented units (EOUs). Various central and state duties, taxes, and levies imposed on input products are refunded to exporters under the scheme. The current RoDTEP rates range from 0.3- 4.3%.

 

'Post rolling out of ICEGATE (Indian Customs Electronic Data Interchange Gateway) in SEZs, the RoDTEP scheme may also be extended to SEZs,' said the commerce department in an office memorandum.

 

This Directorate General of Foreign Trade is likely to issue a formal notification soon amending the foreign trade policy on the same.

 

ICEGATE is the national portal of Indian Customs of Central Board of Indirect Taxes and Customs and is an interface between the trade users and customs department.

 

The government in August 2021 announced the rates of tax refunds under the scheme for 8,555 products but SEZs and EOUs were excluded.

 

As per economic think-tank Global Trade Research Initiative (GTRI), large-scale exports from SEZs, such as electronics, petroleum products, and jewellery, which have high import content, RODTEP could represent a significant incentive.

 

The scheme does not include all exports. Products exported from SEZs, EOUs, Electronic Hardware Technology Parks, Biotechnology Parks and Customs bonded warehouses; exports under Advance Authorisation (which allows duty-free imports of inputs for export production); re-exported imported goods are excluded.

 

The list also includes exports subjected to minimum export price or export duty; restricted export or import products; and supplies from Domestic Tariff Areas to SEZz and Free Trade and Warehousing Zones units.

 

GTRI cautioned that RODTEP may lead to overcompensation for import intensive exports from SEZs.

 

The decision may be a disproportionately 'high bonanza' for high import intensive exports from SEZs, it said, adding that the decision overlooks exports from other categories that are in a similar situation as SEZs.

Fresh fruits have shown remarkable growth in India's agricultural export basket, surging by 29 per cent during the nine months from April to December 2023, according to the latest data compiled by the Agricultural and Processed Food Products Export Development Authority (APEDA). During this period, India's fresh fruits have expanded their market presence to 111 countries, up from 102 destinations the previous year, solidifying their position in the category of exports valued at $ 100 million or more. 

 

Additionally, from April to November 2023, several key commodities experienced significant growth compared to the previous year, including bananas with a 63 per cent increase and kesar and dasheri mangoes with growth rates of 120 per cent and 140 per cent, respectively. Lentils (dried and shelled) saw a growth of 110 per cent, while fresh eggs surged by 160 per cent.

 

From April to December 2023, the export value of Basmati rice surged by 19 per cent, reaching  $ 3.97 billion compared to $ 3.33 billion in the previous year. Concurrently, the export quantity witnessed a notable 11 per cent growth, rising from 31.98 lakh metric tons to 35.43 lakh metric tons within the same timeframe. Top markets for Basmati rice exports included Iran, Iraq, Saudi Arabia, the US, and the UAE. This strong performance highlights the enduring popularity and global demand for Basmati rice, consolidating its status as an essential agricultural product in India's export portfolio.

 

Additionally, processed vegetables experienced a 24 per cent export surge during this period, followed by miscellaneous processed items. Fresh vegetables also saw significant growth compared to the previous year. 

 

Among the 23 Principal Commodities (PCs) in APEDA's export basket, 18 exhibited positive growth during April-December 2023. Notably, 13 out of 15 large PCs, with exports exceeding $ 100 million in the previous year, experienced positive growth, averaging a growth rate of 12 per cent.

 

In the fiscal year 2022-23, India's agricultural exports reached $ 53.1 billion, with APEDA's commodity basket contributing a significant 51 per cent of India's agri-exports.

With the negotiations for the proposed India-UK free trade agreement reaching an advanced stage, the Prime Minister's Office reviewed the progress of the talks on February 16, sources said. Commerce and Industry Minister Piyush Goyal and Commerce Secretary Sunil Barthwal were also present in the meeting, they said.

 

'The talks for the agreement are at a crucial stage now. About three reviews have happened so far at the highest level,' they said, adding both countries are working to iron out differences on the remaining issues.

 

The commerce secretary recently stated that the negotiations were taking time because 'we want' to safeguard India's interest.

 

'India should commercially gain out of it and we should also be able to safeguard the interest of our farmers, PLI (production linked incentive) scheme goods. So, we are there to see that the deal is a fair deal,' he said.

 

So far 13 rounds of talks have been completed and the 14th round started on January 10.

 

Some of the key issues involved in the pact include customs duty cut on electric vehicles and whiskey and the movement of professionals. Talks are also progressing on the proposed bilateral investment treaty (BIT).

 

India and the UK launched the talks for a free-trade agreement (FTA) in January 2022.

 

There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights.

 

The Indian industry is demanding greater access for its skilled professionals from sectors like IT, and healthcare in the UK market, besides market access for several goods at nil customs duties.

 

On the other hand, the UK is seeking a significant cut in import duties on goods such as scotch whiskey, automobiles, lamb meat, chocolates and certain confectionary items.

 

Britain is also looking for more opportunities for UK services in Indian markets in segments like telecommunications, legal and financial services (banking and insurance).

 

The bilateral trade between India and the UK increased to USD 20.36 billion in 2022-23 from USD 17.5 billion in 2021-22.

Strife around the Red Sea has caused significant disruptions in international trade. Despite this disruption, global shipments from India have increased in the past three months, partly because of geo-political heft and a proactive support by the government in facilitating easier access to credit and lowering of non-tariff barriers, analysts said.

 

President of S&P Global Market Intelligence Adam Kansler said India’s ambition on macro-economy and geopolitical heft have played out in its trade relationships. 'Equally interesting is how India is developing new partnerships by looking at overlapping economic agendas and mutual trust,' Kansler added.

 

When crude oil prices soared following the outbreak of the Russia-Ukraine war in 2022 India boosted its imports of petroleum products from Moscow as the price there was cheaper due to the Western sanctions.

 

Similarly, India has taken proactive steps to diversify its exports to weather the challenges arising out of the slowdown of demands in the US and European markets.

 

Kansler noted that India’s exports have grown by nearly 130% and imports by 125% in the last 15 years. 'Sectors like energy, machinery and electronics are the key drivers,' he said.

 

India’s merchandise exports increased by 3.12% year-on-year to $36.92 billion in January. In December 2023 exports increased marginally to $38.45 billion as against $38.45 billion recorded in the same month previous year.

 

'Despite disruption in trade caused by strife around the Red Sea, exports have fared better than expected,' research and ratings agency Crisil said in a report.

 

It can be 'partly attributed to proactive support by the government in the form of easier access to credit, creation of a task force to investigate non-tariff barriers, and tackling sanitary issues,' Crisil said.

 

Union Commerce and Industry Minister Piyush Goyal informed parliament earlier this month that a task force has been set up under the Department of Commerce, 'to identify, categorise and develop tailored strategies' for resolution of non-tariff barriers.

 

Non-tariff barriers are trade barriers that restrict import or export of goods through means other than customs tariff. It includes issues like import licensing, cumbersome testing and certification requirements and unreasonable standards and rules.

 

In order to address the issues arising out of the Red Sea crisis, the Department of Commerce has held a series of meetings with different stakeholders including exporters and logistics, credit & insurance service providers, Commerce Secretary Sunil Barthwal said.

 

Barthwal said through the proactive measures the government ensured that there was no increase in insurance premium despite higher risks due to growing tensions in the Red Sea.

 

'It was our objective that we should be also to see that how they (exporters) can navigate through this difficult situation,' Barthwal told reporters after the release of the monthly trade data for January earlier this month.

 

Officials and analysts agree that the January trade data is better than expected. 'The near-term challenge for India’s exports from the disruption caused by the Red Sea strife has been contained so far,' Crisil said.

 

'While the numbers are encouraging, caution is warranted. Rising global tensions and unevenness in global growth, mean maintaining export momentum will not be an easy task,' the rating agency said.

 

Product and market diversifications have also played a significant role in boosting India’s exports. According to the Ministry of Commerce and Industry data, 2105 new commodities were added to the exporting list in 8 years between 2015-16 and 2022-23.

 

'We are trying to create a much larger basket for ourselves in terms of exports,' said the Commerce Secretary, adding that the efforts have been taken to diversify exports both geographically and in terms of products.