Why does India's agriculture sector not participate in its free trade agreements?

Why is Agriculture Excluded from India's FTAs?

Fear of Import Influx: Participation in FTAs such as RCEP was discarded due to worries that inexpensive agricultural imports, particularly dairy from New Zealand and Australia, would negatively impact Indian farmers.

Agriculture falls under State jurisdiction, while trade is included in the Union list. This results in unpredictable policies — restrictions, export limits, or quarantine regulations — negatively affecting exporter trust.

Infrastructural Shortcomings: The lack of cold chains, agro-processing centers, and effective port logistics, particularly in landlocked regions hinders the potential for agricultural trade.

Indian agricultural exports face quality problems such as pesticide residues, aflatoxins, and inadequate adherence to international SPS (Sanitary and Phytosanitary) standards.

Actions undertaken by other nations

Thailand: The success of Thailand's agricultural exports is fueled by its emphasis on industrial crops such as rubber, robust agro-processing connections, and more than 18 FTAs that improve market access and enhance value-added exports.

Brazil utilized mechanized agriculture, logistics routes, and value enhancement in soy, coffee, and meat to achieve $166 billion in agricultural exports.

India's Current Strengths

Basmati Rice: India's agricultural prowess is highlighted by its world-renowned products like Basmati rice, which accounts for approximately 21% of the nation's agricultural exports.

GI-Tagged Items: Achieving recognition through initiatives such as One District One Product (ODOP).

The Agricultural and Processed Food Products Export Development Authority (APEDA) focuses on enhancing quality and certification, but greater engagement with smallholder farmers is required.

How can Indian Agriculture be prepared for FTAs?

Transition from Commodities to Branding & Value Addition and establish agro-processing clusters close to APMCs.

Advertise branded items and specialized categories such as organic, GI-tagged, or processed foods.

Institutional Changes: Establish a National Agricultural Trade Council to facilitate coordination among the Centre, States, and industry.

Guarantee unified clearance processes and digital adherence to export regulations.

Infrastructure and Logistics: Allocate resources to inland container terminals, refrigerated storage, and rural logistics in landlocked regions.

Agri-Investment Strategy: Transition from input subsidies to Direct Benefit Transfers (DBT)

Actions undertaken by India.

The 2018 Agri Export Policy is a thorough effort by the Indian government aimed at enhancing agricultural exports and linking Indian farmers to global value chains.

The Agricultural and Processed Food Products Export Development Authority supports certification, market insights, export promotion, and capacity-building initiatives for stakeholders.

Programs such as the Paramparagat Krishi Vikas Yojana (PKVY) and National Programme for Organic Production (NPOP) seek to leverage the increasing international demand for chemical-free, sustainable agriculture.

Market Access Negotiations: India persists in participating in both bilateral and multilateral discussions to diminish tariff and non-tariff obstacles for its agricultural products and obtain preferential market access.

Final thoughts

India's careful stance on agriculture in FTAs protects farmer interests but also limits the export potential of the sector.

Going ahead, a well-rounded approach with specific reforms can enhance the integration of Indian agriculture into global markets more efficiently.