Amid the coronavirus pandemic, when the world was suffering from a food crisis due to disturbances in cropping, the Indian agricultural sector increased its production manifold. In the last fiscal year, the economy contracted by around 7 per cent due to the pandemic but the IT, pharmaceutical, and agriculture sectors emerged as sweet spots of the economy. While the IT export registered a marginal growth despite the contraction in global market size, pharmaceutical and agriculture registered double-digit growth in India.
As per a press release by the Ministry of Agriculture and Farmer’s Welfare, the agricultural exports grew by 18.49 per cent between April 2020- Feb 2021 (as compared to the corresponding period in the previous year) with wheat and non-basmati rice registering the highest jump.
“India’s agricultural and allied exports during 2019-20 were Rs. 2.52 lakh Crores and imports were Rs. 1.47 lakh Crores. Even, during the difficult time of Pandemic, India took care not to disturb the world food supply chain and continued to export. The export of Agri and allied commodities during Apr,2020 – Feb,2021 were Rs. 2.74 lakh Crore as compared to Rs. 2.31 Crore in the same period last year indicating an increase of 18.49%,” reads the press release by the Ministry.
The appreciation of global food prices creates the right incentives for Indian producers to export given the fact that the country has surplus food. For the last few years, Indian exports were suffering from low global commodity prices and tightly-knit supply chains with the domination of countries like China and Vietnam. The Coronavirus pandemic not only disturbed the established supply chains but also pushed the global food prices northwards, and this helped the Indian producers to grab new markets.
However, in the post-pandemic world, India is all set to emerge as a food export powerhouse. The recent agriculture reforms, which will bring fresh capital from corporates in the Agriculture sector, will also help the food producers to grab the new markets with an increase in spending on things such as marketing and lobbying.
In the coming years, India would be known for the export of IT, pharmaceuticals, and food items. In 2020, most of the countries around the world fell short of rice and India came forward to feed them. Countries like Vietnam and Thailand which traditionally have been powerhouses of rice exports are now bound to import the grain from India. And with this, the country has created a long-term market for its rice around the world.
The African market, which China was trying to snatch from the Indian exporters, has become a long-term market for the country because in their tough times India came forward to feed them while China halted the exports all of a sudden.
India is the world’s largest producer as well as exporter of rice. In 2019, India exported rice worth 7.1 billion dollars, accounting for 32 per cent of the global rice export. It was followed by Thailand, the United States, Vietnam, Pakistan, China, and Italy. Yet in 2020, the price of rice in countries like Vietnam and China reached so high that even these countries started importing rice from India.
The vicious cycle of declining agricultural exports has been broken due to coronavirus. With the right incentives and active steps of the government, the Indian agricultural exports are set for the golden run in the coming years and this shall bring prosperity to Indian farmers who were reeling under the license raj for decades.