Trade agreements are widening market access for Indian agriculture, but converting that access into export competitiveness requires stronger standards, traceability, and value chains
About six decades ago, India experienced one of its most severe food shortages due to droughts in 1964–65 and 1965–66. The country depended largely on America’s Public Law 480 (PL-480) “Food for Peace” programme, which provided two million tonnes of wheat to India. This American benevolence came with a caveat marked by hunger, humiliation, and the use of statecraft, as the US, under President Lyndon B. Johnson, sent low-grade wheat to India in return for toning down India’s criticism of the Vietnam War. This experience triggered India’s transformation from a food-deficit country to a food-surplus one. After years of reforms and the Green Revolution, India’s agricultural sector has witnessed a significant change, emerging as one of the world’s largest exporters of agricultural products. In FY25, the overall value of agricultural exports stood at US$ 51.2 billion. Today, India is one of the world’s largest exporters of sugar, wheat, rice, pulses, and other food grains.
Agriculture remains the most crucial sector as reflected in the government’s pursuit of new opportunities through trade agreements.
Agriculture remains the most crucial sector as reflected in the government’s pursuit of new opportunities through trade agreements. Several recent trade agreements with Oman, the United Kingdom (UK), New Zealand, the UAE, and Mauritius have aimed to increase market access for Indian farmers. The recent India-Oman Comprehensive Economic Partnership Agreement (CEPA) has opened doors for Indian agricultural products through tariff elimination and duty-free access, thereby improving market access and price competitiveness for Indian exporters. The India-UK Comprehensive Economic and Trade Agreement (CETA) is deemed to fetch premium prices for products, with an estimated 50 percent rise in Indian exports. Leading agricultural states, such as Maharashtra, Kerala, Gujarat, and the Northeast, are expected to benefit from exports of fruits, spices, horticultural products, and cotton. The agreement is also expected to create new opportunities for exports of coffee, tea, oilseeds, and marine products. Similarly, the India-New Zealand Free Trade Agreement (FTA) aims to build sectoral capacity in India’s horticulture segment. The agreement includes establishing Centres of Excellence to enhance farmers’ capacities through technical support, improved planting material, post-harvest practices, food safety measures, and supply chain development. Additionally, the India-UAE CEPA aims to build sustainable supply chains through a food security corridor connecting Indian farmers directly to UAE markets.
An export-oriented agricultural economy, however, faces several technical challenges that could undermine the efforts and gains from trade agreements. Existing stringent food safety regulations and compliance requirements in developed countries impede Indian exports to these markets. For instance, the EU’s strict maximum residue levels (MRLs) for pesticides raise compliance costs for Indian farmers. Poor storage and supply chain conditions lead to aflatoxin contamination in Indian Basmati rice, resulting in product rejections. Indian exports have also faced rejections of horticultural produce due to strict sanitary and phytosanitary (SPS) measures. The fragmentation of India’s agricultural value chains, information asymmetries, and multiple barriers hinder compliance with food safety requirements. The growing global demand for sustainable food systems is likely to raise such concerns for Indian farmers in the near future.
An export-oriented agricultural economy, however, faces several technical challenges that could undermine the efforts and gains from trade agreements.
To accrue full benefits from the trade deals, India must support the agriculture and food processing sector by building conformity with country standards, incorporating good agricultural practices (GAP) and strengthening its supply chains. Building product traceability is one way which can enable farmers to track essential information required to meet country standards. This can be done through expanding the established practices by the Agricultural & Processed Food Products Export Development Authority (APEDA). Support through a unified traceability platform linked to APEDA can enable farmers and producers to ensure the availability of backward and forward traceability and quality assurance data. For instance, the Seed Authenticity Traceability and Holistic Inventory (SATHI) system is already in place and helps farmers with the holistic management of seed production, quality certification, traceability, and distribution
This can be further accompanied by providing subsidies and special grants for registration, certification and testing for farmers. Shared infrastructure and access through Farmer Producer Organisations (FPOs) and Self-Help Groups (SHGs) can help smallholder farmers access the necessary tools for exports. Additionally, clear updated crop-wise guidance can be provided to producers.
To accrue full benefits from the trade deals, India must support the agriculture and food processing sector by building conformity with country standards, incorporating good agricultural practices (GAP) and strengthening its supply chains.
For India, creating downstream forward linkages through processing, storage, packaging, distribution, and wholesale is crucial. India’s agricultural sector is already showing signs of moving towards the downstream value chain. Investment in storage, cold rooms, controlled-atmosphere warehouses, and improved logistics can help farmers avoid distress sales and ensure the timely movement of produce through supply chains. Moreover, GAP must be stressed to enable farmers to gain greater access to global markets. Farmers and producers must be provided with a pre-approved list of agrochemical residue-testing facilities and training in input management. For instance, targeted cluster development, GAP adoption, minimal chemical inputs, and support for full traceability for Indian mangoes, demonstrated by ICAR, have shown a scalable and successful model of export-quality compliance.
While trade agreements are increasingly enabling greater market access and capacity building, providing a backbone for an export-oriented sector through such targeted mechanisms would make Indian products globally competitive and help utilise the full potential of economic partnerships.
Shruti Jain is an Associate Fellow with the Centre for Development Studies at the Observer Research Foundation.
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Shruti is an Associate Fellow at the Centre for Development Studies, Observer Research Foundation (ORF), where her research examines the intersections between policy, economic diplomacy ...
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