India's exports of goods and services could touch $900 billion in the current financial year, up from $770 billion in the previous year, keeping resilient despite global headwinds, a top official of a grouping of exporters said.

 

Merchandise exports could expand to between $495 billion and $500 billion, while services exports could touch $400 billion in the year ending March 2024, said Ajay Sahai, director general of the Federation of Indian Export Organisations (FIEO).

 

Overseas demand remains strong in many markets, he added.

 

Trade Minister Piyush Goyal urged exporters to explore new markets, however, in view of the possible impact of war in Ukraine and a global slowdown.

 

'The times ahead are going to be very, very tough,' Goyal said speaking at a industry event late on Wednesday, while warning of the fallout from the conflict.

 

Prime Minister Narendra Modi's government has set an export target of $2 trillion by 2030, offering benefits to boost exports of electronics, engineering, pharmaceutical, and other goods.

 

India's exports have increased by more than $200 billion in the last two years, led by a surge in exports of software, mobile exports, and agricultural and petroleum products.

 

Exports of engineering, gems, and jewellery goods have slowed in the last few months, however.

 

Exports of agricultural, petroleum, and electronic goods remained strong in the Western markets due to pricing factors while exports to Asian and Middle east countries have grown substantially, exporters said.

 

Sahai, who was part of a 50-member business delegation to Russia last week, said there was a huge demand for Indian goods, particularly food, after the Western sanctions imposed over the Ukraine war.

 

'Indian exporters are hopeful that both countries would soon work out a mechanism allowing payments in local currencies that would facilitate the shipments of Indian goods to Russia,' Sahai said.

 

But Indian officials have said Russia was reluctant to accept payments in the rupee currency for its oil exports.

 

India has not explicitly condemned Russia's February 2022 invasion of Ukraine and has called for dialogue to resolve hostilities.

Exports of agricultural and processed food products rose by 9% to $26.3 billion in 2022-23 as compared to FY22, driven by a spike in shipment of rice, fruits and vegetables, livestock and dairy products.

 

The shipment of products under the agricultural and processed food products exports development authority (Apeda) basket surpassed the target of $23.56 billion for FY23.

 

According to the Directorate General of Commercial Intelligence and Statistics, the value of rice exports in FY23 rose by more than 15% year-on-year to a record $11.1 billion from $9.6 billion in the previous fiscal. In terms of volume, rice shipment grew by 5% to 22.34 million tonne (MT) last fiscal year-on-year.

 

The increased realisation in rice exports has been achieved despite India last year banning broken rice shipment and imposition of exports tax of 20% on white rice.

 

Officials attribute the spike in rice exports to factors such as robust global demand especially from West Asian countries, Africa and Europe and floods in Pakistan, a major grain exporter which had hugely impacted a large chunk of paddy crop.

 

India has been the world’s largest exporter of rice in the last decade and currently has 45% share in global grain trade.

 

The United States Department of Agriculture (USDA), in its April 2023 crop outlook, stated 'India’s prices are the most competitive among global suppliers and its total supply of rice is near-record high'.

 

'Robust global demand and competitive pricing have ensured a surge in rice exports in the current fiscal and adherence to quality parameters has resulted in sharp increase in demand for Indian rice with the grain being shipped to more than 75 countries,' an official told FE.

 

Fresh and processed fruits and vegetables reported export growth of 18.8% to $3.8 billion in the last fiscal year. The shipment of cereals, preparations and processed food products rose by 20% $4.3 billion in FY23.

 

Export of meat, dairy and poultry products declined marginally compared to last year at $4 billion last fiscal compared to previous year.

 

However exports realisation, in terms of rupees, rose by 4% to Rs 32,334 crore last fiscal.

 

Exports of products under Apeda basket was $ 25.6 billion in 2021-22, which was around 51% of the country’s total agricultural goods exports of more than $50 billion. Rest of agricultural products exports include marine, tobacco, coffee and tea.

 

Commerce ministry officials attribute the rise in the export of agricultural and processed food products because of the government’s initiatives such as organising B2B exhibitions in various countries, tie ups with global hypermarket chains, exploring new markets through product-specific marketing campaigns by the active involvement of Indian missions.

Union Agriculture Minister, Mr. Narendra Singh Tomar inaugurated the National Conference on Agriculture for Kharif Campaign 2023-24 yesterday at NASC Complex, New Delhi. Addressing Conference, he emphasized that agriculture remains the prime pulse of the Indian economy and is at the core of the socio-economic development of the country. It accounts for around 19 percent of the GDP and about two-thirds of the population is dependent on the sector. 

 

Mr. Tomar expressed happiness that India’s agriculture sector has been witnessing robust growth with an average annual growth rate of 4.6 percent over the last six years. This has enabled the agriculture and allied activities sector to contribute significantly towards the country’s overall growth, development, and food security.

 

Crop-wise target for Kharif 2023

The objective of this conference was to review and assess the crop performance during the preceding crop seasons and fix crop-wise targets for the Kharif season in consultation with State Governments, ensure the supply of critical inputs, and facilitate the adoption of innovative technologies to enhance production and productivity of the crops. 

 

The national target for total food grains production is set at 3320 lakh tonnes for the year 2023-24.  The target for production of pulses has been fixed at 292.5 lakh tonnes compared to 278.1 lakh tonnes this year and oilseeds production will be increased from 400 to 440 lakh tonnes in 2023-24. Total Shree Anna production has to be increased from 159.1 lakh tonnes in 2022-23 to 170.0 lakh tonnes in 2023-24. The strategy would be to increase area through inter-cropping and crop diversification and productivity enhancement through the introduction of HYVs and the adoption of suitable agronomic practices in low-yielding regions. 

 

The priority of the government is agro-ecological based crop planning for the diversion of land from excess commodities like rice and wheat to deficit commodities like oilseeds and pulses and high-value export-earning crops. The special Mustard program was initiated during Rabi 2020-21 that has brought the most spectacular results. Mustard production has jumped by 40% from 91.24 to 128.18 lakh tonnes in the last 3 years. The productivity saw an 11% increase from 1331 to 1447 kg/ha. The area under rapeseed & mustard enhanced by 29% from 68.56 lakh ha in 2019-20 to 88.58 lakh ha in 2022-23.

 

Foodgrain Production Estimates

As per 2nd Advance Estimates (2022-23), the production of foodgrains in the country is estimated at 3235 lakh tonnes which is higher by 79 lakh tonnes than the production of foodgrains during 2021-22. Record production is estimated of rice, maize, gram, pulses, rapeseed and mustard, oilseeds, and sugarcane.

 

The total production of sugarcane in the country during 2022-23 is estimated at record 4688 lakh tonnes which is higher by 1553 lakh tonnes than the average sugarcane production. As per the 3rd Advance Estimates of Horticulture, a record 3423.3 lakh tonnes of horticultural production are estimated in 2021-22 which is 77.30 lakh tonnes higher than production of 2020-21.

 

Mr. Manoj Ahuja, Secretary of the Department of Agriculture & Farmers’ Welfare, said that the country is maintaining an increasing trend in food grain production since 2015-16. The government has taken measures to augment crop and livestock productivity, ensure certainty of returns to the farmers through price support (Minimum Support Price), promote crop diversification, and made focused interventions to enhance credit availability, facilitate mechanization, and boost horticulture and organic farming. As a result, agriculture exports touched a historic high growth in 2021-22. As compared to the previous year 2020-21, the agri and allied export has increased from 41.86 billion USD in 2020-21 to 50.24 billion USD in 2021-22 i.e. an increase of 19.99%.

 

For the modernization of agriculture and to facilitate farmers, the government launched the SATHI (Seed Traceability, Authentication, and Holistic Inventory) Portal and Mobile App, a Centralized Online System for seed traceability, authentication, and inventory designed to deal with the challenges of seed production, quality seed identification, and seed certification.

 

Mr. Arun Baroka Secretary (Fertilizers) assured a timely supply of fertilizers for the forthcoming Kharif season. The government also announced to convert more than 3.25 lakh fertilizer shops across the country as Pradhan Mantri Kisan Samruddhi Kendras. These will be centers where farmers can buy not only fertilizers and seeds but also implement soil testing and avail useful information about farming techniques. Further, he provided the information about Integrated fertilizer management system (IFMS) for detailed information about fertilizer and related issues. In his deliberation he has given the information on the PM PRANAM and PM Kisan Samridhi Kendra he advised farmers should use organic inputs.

 

Dr. Himanshu Pathak, Secretary (DARE) and Director General, ICAR shared recent technological advances made in agriculture for the benefit of the states and prepared a plan of development accordingly. He stressed on using bio-fortified and climate-resilient varieties to fulfill the dream of food and nutritional security for all. Further in his deliberation, he has highlighted the improvement of varieties that are climate resilient, and newly released and biofortified varieties should be used.

India being a land of agriculture contributed to a major proportion of the country’s economy. While in the past decades, urbanisation and globalisation have reduced the agricultural output with chemical fertilisers, the country is again leading towards organic farming.

 

In the world’s organic agricultural land tally, India ranks fifth and has topped in terms of the total number of organic producers. The Centre is continuously putting relentless efforts in establishing organic farming as a major practice among farmers by providing subsidies and schemes. It is pushing initiatives such as the National Programme for Organic Production involving the accreditation of certification bodies, formulating standards for organic production, promotion and marketing of organic farming under Agricultural and Processed Food Products Export Development Authority (APEDA).

 

Burden of fertiliser subsidy

Such accreditation fosters international recognition of organic products produced in India. Moreover, there is an extensive burden on the governments to provide subsidies to farmers on the purchase of chemical fertilisers which has increased manifolds in the last decade. In order to tackle this challenge, organic farming is the only way out.

 

It can emerge as an effective substitute for chemical fertilisers, for which heavy prices are paid by importing them and causing detrimental effects on the climate as well as the health of the country’s citizens. Added to this, private players are also significantly contributing to advocating organic farming. All these efforts are being propelled to position organic farming as a solution and way towards sustainable agriculture.

 

Organic farming is the most sustainable method of farming which can fetter the use of chemically infused fertilizers and pesticides and foster the usage of naturally grown food products. In simple terms, it can replace synthetic fertilizers.

 

Mitigating climate change

Organic farming is beneficial for the environment as its practices include a focus on maintaining soil health, conserving water, and promoting biodiversity. Undoubtedly, the use of synthetic chemicals and fertilizers is already having negative impacts on the ecosystem resulting in rapid climate changes but it can be reversed by boosting organic farming. The adverse effects of chemical fertilizers include soil degradation, water pollution, and harm to wildlife. Therefore, by using natural methods such as crop rotation, composting, and biological pest control, organic farming ensures that the soil remains fertile and healthy, while also reducing the impact on the environment.

 

Reduces carbon footprint and greenhouse gases emission

Organic farming is key to reducing emissions from greenhouse gases and lowering the carbon footprint because it does not allow any chemical consumption. Many studies have shown that compared to conventional farming, organic farming practices consume approximately 45 per cent less energy and fumigant pesticides, likely used on strawberry fields that can emit very harmful nitrous oxide resulting in poor climate conditions. However, this can be averted by implementing organic farming methods and steeply decreasing the use of chemical fertilizers.

 

Supports Sustainable Development Goals

 

Organic farming has immense potential to support and boost sustainable development goals identified by United Nations and participating countries across the globe. These sustainable development goals have significantly emphasized the dire need for climate action and good health and well-being. To achieve the target of completing SDGs by 2030, organic farming can play a pivotal role in numerous ways but most importantly it can pave the path for the elimination of the vast usage of chemical fertilizers, providing naturally grown food to consumers, extending support to sustainable development goals.

 

Farmer-friendly

. Firstly, it minimizes the cost of synthetic chemicals and fertilizers because only organically produced manure or bio-fertilizers are cast into the soil. Organic farming prevents the overuse of these chemicals resulting in soil degradation and reduced crop yields, ultimately becoming financially devastating for farmers. Organic farming practices are more cost-effective in the long run, as they rely on natural methods that are less expensive and help maintain soil fertility. Furthermore, organic farming provides farmers with a stable income, as the demand for organic produce continues to grow.

 

Adding extra years to human life

Various research has shown that the chemicals used in conventional farming have been linked to a range of health problems, including cancer, birth defects, and respiratory illnesses resulting in reduced healthy years of human life. That’s where organic farming steps in to add an extra year to human life. Because organic farming practices do not involve the use of synthetic chemicals, making the food produced through this method is much safer for consumption. Besides, organic produce is also richer in nutrients and antioxidants than conventionally grown produce.

 

Organic farming has emerged as a game changer for agriculture in India and has disrupted the continuous intrusion of chemical fertilisers effectively. Certainly, this has immense potential to transform the agricultural industry as it is well-suited to India’s climate and soil conditions, further helping farmers in improving their yields while simultaneously protecting the ecosystem. Benefiting the environment, health, and farmers and promoting healthy soil, plants, and animals, organic farming can pave the path for sustainable agriculture.

Trading in Indian rupees rather than the dollar or euro as has been traditionally done for decades is likely to encourage trade and promote economic growth and development between India and South Africa, a prominent business leader has said. Praveer Tripathi, the president of the Confederation of Indian Industry-India Business Forum (CII-IBF) in South Africa, made the remarks in his keynote address at the KwaZulu Natal International Business Association (KIBA) Gala Dinner hosted in Durban on Saturday.

 

'International trade settlement in Indian rupees, if implemented, will enable a trader in South Africa to import goods by paying in Indian rupees. Settling of trade in Indian rupees will not only eliminate the need for a third currency, such as the US dollar or Euro – it will result in lower transaction cost and reduce currency exchange risks,' Tripathi said. He said it will also create new avenues for investment and trade between the two countries and it will promote the use of local currencies which will benefit both countries’ economies.

 

Tripathi said settling trade in Indian rupees would also create new opportunities for businesses in South Africa and India to enter each other’s markets. This would encourage more bilateral trade and investment and promote economic growth and development in both countries.'Settling trade in Indian rupees would strengthen the ties between India and South Africa and promote long-term trade relationships. By promoting trade settlement in their respective currencies, both countries can demonstrate their commitment to fostering economic cooperation and partnerships,' Tripathi said.

 

'The IBF in South Africa recognises the potential of direct trade in rupees between our two countries and is committed to exploring this avenue,' Tripathi said as he called on KIBA to work with his organisation to promote direct trade between their two countries, especially for the benefits that it could bring to the small and medium business sectors. 'There are 18 countries, including some African countries, that have already agreed to transact in Indian rupees, so with your help, we want to get this started in South Africa – the sooner the better,' Tripathi concluded.

 

At the event, a Memorandum of Understanding (M0U) was also signed between KIBA and the Delhi-based Progress, Harmony and Development Chamber of Commerce and Industry. KIBA President Omie Singh described the signing of the M0U as historic since the 118-year-old organisation has not had a footprint in South Africa until now. 'This MoU will open the door to 160 other organisations throughout the world, be it in Germany, London, China, Russia, or Brazil. KIBA will have access to do business with all those organisations throughout the world,' Singh said, adding that this would benefit not only the province but South Africa as a whole.

The Indian government has fixed a target of 332 million tonnes (mt) of foodgrain production, including 29.25 mt of pulses, during the 2023-24 crop year (July-June).

 

Releasing the target at a conference of State officials for the preparation of strategies amid the forecast of El Nino, the Agriculture Ministry said the aim is also to ensure 44 mt of oilseed production and 17 mt of Shri Anna (millets). 'The strategy would be to increase area through inter-cropping and crop diversification and productivity enhancement through the introduction of high yielding varieties, and adoption of suitable agronomic practices in low yielding regions,' the ministry said in a statement.

 

As per the second advance estimate for the current crop year, the production of foodgrains in the country is estimated at 323.5 mt, up 7.9 mt from last crop year. Record production has been estimated for rice, maize, gram, pulses, mustard, oilseeds, and sugarcane.

 

Robust growth

Agriculture Minister Narendra Singh Tomar, who inaugurated the conference, said the agriculture sector has been witnessing robust growth, with an average annual growth rate of 4.6 per cent over the last six years. This has enabled the agriculture and allied activities sectors to contribute significantly to the overall economic growth of the country.

 

The priority of the government is agro-ecological-based crop planning for diversion of land from excess commodities like rice and wheat to deficit commodities like oilseeds and pulses and high-value export-earning crops, the ministry said.

 

Addressing the conference, Minister of State for Agriculture Kailash Choudhary said global demand for millets is set to rise, consequent to the celebration of the year 2023 as the International Year of Millets (IYM). 'This will provide us a unique opportunity to increase production, ensure efficient processing and consumption, promote better utilisation of crop rotations, and encourage better connectivity throughout food systems to promote millets as a key component of the food basket,' Choudhary said.

 

He said though there has been a significant increase in oilseeds and pulses production in the past few years, more stress should be given to further increase their output. The agri- and allied exports have increased from $41.86 billion in 2020–21 to $50.24 billion in 2021–22, he said.

 

Union Minister for Commerce and Industry Piyush Goyal on Wednesday said that a total of 115 Quality Control Orders (QCOs) covering 493 products have been notified for compulsory BIS certification by the Union Government.

 

The centre hopes that through the issuance of QCOs, the notified products shall conform to the requirements of the relevant Indian Standard and the manufacturers of these products have to compulsorily obtain certification from BIS.

 

'Till May 2014, only 14 TR/QCOs covering 106 products were notified for compulsory BIS certification and implementation of Indian Standards. After May 2014, a further 101 QCOs covering 387 products have been notified,' he said.

Unseasonal heat and drought in Spain have driven concern about this year's crop production and a potential increased need for imports, at a time when there is also growing concern about the Ukrainian grain corridor.

 

The April EU Monitoring Agricultural Resources report (MARS) said no meaningful rainfall had occurred in Spain's main cropland area since January.

 

Soil moisture is now critically low for winter crops and spring barley with negative impacts on growth and development, the Mars report said.

 

'The drought is already suffocating 60% of the Spanish countryside and has caused irreversible losses to more than 3.5 million ha of non-irrigated cereal crops,' the Spanish agricultural union COAG warned last week.

 

'Weather is dry and untypically hot in Spain, we might see a really bad crop this year,' a Europe-based broker meanwhile told Agricensus.

 

The European Commission April crop forecasts call for soft wheat production in Spain to fall to 4,952,000 mt in 2023 from 5,388,000 mt in 2022, itself a sharp fall from 7,455,000 mt in 2021.

 

There has also been concern that production of other crops could be affected.

 

MARS already warned of 'an impact on areas and type of spring sowing in the southern provinces of Spain, where maize and rice will partly be replaced by sunflowers and other water stress resistant crops and part of the land might not be sown at all.'

 

The Spanish government has requested that farmers get support from the crisis reserve fund of the EU’s Common Agricultural Policy (CAP) because of the exceptional circumstances. 

 

Trade expects increased imports

 

Trade sources have suggested that lower production may cause an increase in feed grain imports, including those from Ukraine, but also from Brazil which is expecting a large corn harvest.

 

'Spain experienced a dramatic drought that sharply reduced grain crops, increasing the country’s grain shortfall,' the US Department of Agriculture’s Grain and Feed Annual noted, adding that this, in turn, drove Ukrainian imports.

 

Fastmarkets data shows that in 2022 Ukrainian wheat exports to Spain grew 627% to 1,154,273 mt from 158,681 mt in 2021.

 

The USDA also said Spain had benefitted from the implementation of the Black Sea grain corridor, which came in time to help it during last year’s drought.

 

Spain has been the second biggest beneficiary of the grain corridor after China, with official data showing it has imported 5.1 million mt of products under the corridor since it opened last August, of which 1.9 million mt was wheat.

 

Trade sources have expressed their concern to Agricensus about the current uncertainty around the grain corridor in the Black Sea, with Spanish buyers looking to Ukraine as a backup in the likely event that Spanish production is again affected by drought.

Indian non-basmati rice exporters hope to sustain the record-high shipments this fiscal as witnessed in the 2022–23 fiscal. In 2022-23 fiscal, shipments touched a new peak in volumes and value on the robust demand for the cereal.

 

Indian non-basmati rice exports, despite a levy of 20 per cent duty, a ban on broken rice and a decline in purchases by Asian buyers such as Bangladesh and China, touched a record 17.78 million tonnes valued at over $6.35 billion in 2022–23. In the previous year, non-basmati shipments were at 17.26 million tonnes valued at $6.12 billion. Overall, Indian rice exports in FY23 stood at over 22.28 million tonnes valued at over $11.13 billion.

 

African demand

The higher demand for Indian non-basmati rice from traditional buyers from African countries such as Benin, Cote D’Ivoire, and Senegal helped offset the decline in off-take from Asian customers such as Bangladesh, China, Nepal, and Vietnam.

 

Benin, with purchases exceeding 1.55 million tonnes, was the largest buyer of non-basmati rice , compared with 1.52 million tonnes a year ago. Cote d’Ivoire at 1.21 million tonnes (0.93 mt a year ago), Senegal at 1.33 mt (1.09 mt), and Togo at 0.94 million tonnes (0.67 mt) were among the large African buyers. China reduced its rice purchases to 1.5 mt (1.63 mt), while Bangladesh almost halved it to 0.84 mt (1.62 mt) whereas Nepal also reduced the offtake sharply at 0.76 mt (1.38 mt) and Vietnam at 0.64 mt (0.70 mt) during the year. India gained market share from Pakistan, which had a bad crop last year.

 

'We expect to maintain the same figures both in value and volumes this year as there is strong demand for Indian rice,' said BV Krishna Rao, President, The Rice Exporters Association, commenting on the export outlook. There is no other country that can replace India as a rice supplier, he said. India accounts for about 45 per cent of the global rice trade.

 

Despite the levy of a 20 per cent duty last year, the demand for Indian rice is intact. 'With shipments of 22 million tonnes in 2021–22, we clocked $10 billion, and last year we clocked over $11 billion with almost the same volumes. The higher value is because of the duty,' Rao said.

India is exploring ways to counter the EU's domestic law that allows it to impose retaliatory tariffs in response to an appeal into the non-functioning dispute settlement mechanism of the World Trade Organization (WTO).

 

Officials said the EU law violates global trade norms and can become another dispute at the organisation. While the EU has not invoked the law as yet, New Delhi is also examining if it can retaliate by imposing higher duties on products coming from the EU against the quota restrictions put in place by the bloc on steel imports from India in 2020.

 

A WTO panel last month ruled in favour of the EU, Japan and Taiwan on India's import duty on mobile phones and base stations, among others.

 

The EU has in place Enforcement Regulation that allows it to enforce its rights by imposing customs duties or other restrictions in response to an appeal into the void (the non-functioning WTO Appellate Body).

 

'Retaliation is against the WTO rules and the appeal. If that happens, we can also explore that option. We are ready and examining every aspect,' said an official, adding that India is engaging with the EU.

 

In 2020, the EU implemented tariff rate quotas (TRQ) on steel imports, following the US decision to impose additional import duties on steel from several countries including Russia, India and Turkey. It fixed specific quotas for steel imports for exporting countries beyond which the items attracted additional import duties of 25%.

 

'We can also retaliate through TRQs on steel where EU had introduced 25% additional duty but we have not exercised that retaliation,' the official said.

 

'They have never invoked it... It remains to be seen if they exercise that,' the official said, adding that it will be detrimental to both sides if India also does the same.

 

India had proposed to impose an additional ?292 million worth of import duties on products coming from the EU.

 

'Their domestic law is not in congruence with WTO and any country can take that law to dispute because WTO members can't pass any law which is in contravention to the international law,' the official added.