India needs stable agri-export policy to achieve $100 billion goal: Economic Survey

The Economic Survey, an annual document presented by the Ministry of Finance before the Union Budget, frequently serves as a crucial guide to the government's economic thinking and priorities. Its identification of agricultural exports as a "low-hanging fruit" with "immense export potential" and a source of "international leverage" for India underscores a significant shift in perspective and a strategic imperative. This recommendation for a stable agri-export policy, aimed at achieving an ambitious $100 billion target while balancing domestic demand, holds profound implications for India's economy, farmers, and global standing. Historically, India's agricultural journey has been remarkable. Post-independence, the nation grappled with chronic food shortages, necessitating heavy reliance on imports. The Green Revolution, initiated in the mid-1960s, transformed India from a food-deficit nation into a self-sufficient, and often surplus, producer of major food grains like wheat and rice. This success, however, came with its own set of challenges, including over-reliance on certain crops, environmental degradation, and the persistent issue of farmer income volatility. Despite being one of the world's largest agricultural producers, India's share in global agri-trade has remained relatively modest, often hampered by inconsistent export policies. The core of the Economic Survey's recommendation lies in addressing this inconsistency. For decades, India's agri-export policy has been characterized by ad-hoc interventions, primarily driven by domestic price stability concerns. When domestic prices of commodities like onions, wheat, or rice rise, the government frequently resorts to export bans or quantitative restrictions. While intended to protect domestic consumers and ensure food security, such measures severely damage India's credibility as a reliable supplier in the international market. Exporters face uncertainty, struggle to fulfill long-term contracts, and lose market share, ultimately discouraging investment in export-oriented agricultural infrastructure and value chains. Several key stakeholders are directly impacted by and instrumental in shaping agri-export policy. Farmers, the backbone of India's agricultural sector, stand to gain significantly from a stable policy that ensures better prices for their produce and access to global markets, thereby enhancing their income and reducing their vulnerability to domestic price fluctuations. Exporters and traders require predictability to invest in processing units, logistics, and market development. The government, through ministries such as Agriculture & Farmers' Welfare, Commerce & Industry, and Finance, plays a pivotal role in formulating and implementing these policies, balancing the interests of farmers, consumers, and the national economy. Domestic consumers, on the other hand, require assurance of food availability and price stability, which often presents a policy dilemma. For India, the significance of a stable agri-export policy is multi-faceted. Economically, achieving the $100 billion target would significantly boost rural incomes, generate foreign exchange, and help bridge the trade deficit. It would also spur investment in agricultural processing, cold chain infrastructure, and logistics, creating employment opportunities. Socially, it contributes to poverty reduction and enhances rural prosperity. Strategically, being a reliable global food supplier provides India with considerable "international leverage," strengthening its position in multilateral forums and bilateral relations, particularly in a world increasingly concerned about food security, as evidenced by recent geopolitical disruptions affecting global food supplies. From a constitutional and policy perspective, agriculture falls primarily under the State List (List II, Entry 14) of the Seventh Schedule, granting states powers over agricultural land, production, and markets. However, trade and commerce in goods, including agricultural produce, can be regulated by both the Centre and states (Concurrent List, Entry 33), while foreign trade is a Union subject (List I, Entry 41). This necessitates close Centre-State coordination for effective policy implementation. The Foreign Trade (Development and Regulation) Act, 1992, is the primary legislation governing India's export and import policies. Furthermore, India's commitments under the World Trade Organization's (WTO) Agreement on Agriculture (AoA) also influence its export subsidy and domestic support policies. Any stable agri-export policy must also consider the objectives of the National Food Security Act (NFSA), 2013, which prioritizes domestic food requirements. The future implications are substantial. A stable policy regime could foster long-term investments in agricultural research and development, diversification into high-value crops, adoption of sustainable farming practices, and adherence to international quality standards. It would encourage the development of a robust food processing industry, adding value to raw agricultural produce. However, challenges remain, including climate change impacts, infrastructure bottlenecks, and navigating complex global trade dynamics and protectionist tendencies. By committing to a consistent and predictable agri-export policy, India can unlock its immense agricultural potential, secure greater prosperity for its farmers, and enhance its strategic standing on the global stage, moving beyond ad-hoc measures to a truly integrated and forward-looking approach.