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Agriculture Trade Policy, Promotion and Logistics Development Division

  • Overview

    Trade Overview
    Trade Overview

    Department of Agriculture, Cooperation & Farmers Welfare

    Agriculture Trade Policy, Promotion and Logistics Development Division

     Overview

     Overview of Agriculture Trade Policy, Promotion and Logistics Development Division

    Agricultural Trade Policy, Promotion and Logistics Development Division of this Department is entrusted with the responsibility of making policy recommendations on export and import of agricultural commodities. Agricultural Trade Policy, Promotion and Logistics Development Division is the nodal Division of the Department for coordinating/ formulating responses on World Trade Organization’s (WTO) Agreement on Agriculture with the Ministry of Commerce, with DIPP on FDI in agriculture, with Ministry of Finance in matters relating to the modification in the Custom duty and Goods and Services Tax (GST) on agricultural commodities and with Ministry of  Commerce in matters relating to Preferential Trade Agreements (PTAs)/Free Trade Agreements (FTAs) with different countries.

    The Division which was earlier called the Agriculture Trade Policy Division has been rechristened as Agriculture Trade Policy, Promotion and Logistics Development Division realizing the importance of Agri-Logistics in improving India’s Agricultural Trade. This Division works in close coordination with the Logistic Division of Department of Commerce and other related agencies for development of agro-logistics.

    Work Distribution of Trade Division
    I.
    Formulation  of   export and  import  policy   recommendations  relating to

    agricultural commodities in coordination with the concerned subject matter Divisions.

    II. Identification of potential foreign markets and agricultural and agro based

    commodities for export.

    III. Formulation/implementation exports development and export promotion

    measures:

    a) This includes monitoring of market intelligence regarding the commodities in collaboration with subject matter Divisions for purposes of organising export production.

    b) Coordination with the Ministry of Commerce regarding export promotion for agricultural commodities. This  includes recommendations regarding participation in fairs and exhibitions, sponsoring of Trade delegations, joint ventures in third countries, recommendations on export incentives etc.

    IV. Coordination work with respect to the recommendations of Department of Agriculture, Cooperation and Farmers' Welfare in respect of Export and Import of Agricultural Commodities.

    V. Monitoring Imports of important agricultural commodities keeping in

    view the interests of the producers/growers.

    VI. Coordination with different Divisions in matters concerning policy matter on

    Foreign Direct Investment.

    VII. Coordination with the Ministry of Commerce in taking follow up action

    on the implementation of GATT/ World Trade Organization Treaty.

    VIII. Coordination with various Divisions for suggestions in respect of modifications in custom/ excise duties to be conveyed to the Ministries of Commerce and Finance.

    IX. Collection, compilation and analysis of basic data on import/ export, international/domestic prices of agricultural commodities etc.

    X. Compilation of information on all bi-lateral/pluri-lateral trade agreements concerning India and identification of commodity-wise market access opportunities available to India as part of these Agreements.

    XI. Promotional work pertaining to geographical indications.

    XII. Budget proposals including suggestions in respect of modification in customs duties and GST.

    XIII. Coordination with the Ministry of Commerce for development of agro-logistics.

     3. India’s Agriculture Trade

    a.  India has emerged as a significant Agri-exporter in a few crops viz. rice, cotton, sugarcane, cashew nut, castor seed and groundnut. As per WTO’s Trade Statistics, the share of India’s agricultural exports and imports in the world agriculture trade in 2017 were 2.27% and 1.90%, respectively.

    b.  Agricultural exports as a percentage of agricultural GDP has increased from 8.71% in 2015-16 to 9.00 % in 2017-18. During the same period, Agricultural imports as a percentage of agricultural GDP has decreased from 5.68% to 5.47%.

     Agricultural Exports and Imports

     

    a.  Export of agricultural commodities has helped producers to take advantage of wider international market which, in turn, has incentivized their domestic production. Crops exported in large quantities viz. rice, cotton, castor have witnessed significant increase in area coverage and growth rate of production.

     

    b.  Agricultural exports increased from Rs. 2,15,396 crores in 2015-16 to Rs. 2,50,273 crores in financial year 2017-18 registering a growth of nearly 16.19%. Agricultural exports during 2017-18 was primarily on account of higher exports of rice (basmati), rice (non-basmati), raw cotton, guargum meal. oil meals, castor oil etc. The share of agricultural exports in India’s total exports increased from 12.56% in 2015-16 to 12.80% in 2017-18.

                VALUE=12.56

    c. India’s top 10 agricultural export commodities in terms of quantity and value for the year 2015-16 to 2017-18 are given in the table 1 below:

     

    Table 1: India’s top 10 agricultural commodities (Exports)

    [Value in Rs. Crores] 

    S.N. Commodity 2015-16 2016-17 2017-18

    1

    Rice -basmati

    22719

    21604

    26841

    2

    Rice(other than basmati)

    15483

    17145

    22927

    3

    Spices

    16630

    19442

    20014

    4

    Cotton raw

    12821

    10982

    12156

    5

    Oil meals

    3599

    5371

    6969

    6

    Coffee

    5125

    5668

    6245

    7

    Cashew nut

    5028

    5303

    5945

    8

    Sugar

    9825

    8678

    5229

    9

    Fresh vegetables

    5237

    5772

    4997

    10

    Groundnut

    4075

    5454

    3384

     

    Total agri & allied exports

    215396

    227554

    250273

    Source: Department of Commerce

     

    d. India’s agricultural imports increased from Rs. 1,40,311 crore in 2015-16 to Rs 1,52,061 crore in 2017-18 registering a growth of nearly 8.37 %. Increase in value of agricultural imports during this period was primarily on account of imports of vegetable oils, pulses, fresh fruits, cashew nuts, spices, sugar, cocoa, cotton etc. Share of agricultural imports in the total imports decreased from 5.64 % in 2015-16 to 5.07 % in 2017-18.

    e. India’s top 10 agriculture import commodities for the year 2015-16 to 2017-18 are given in the table 2 below:

     

     

    Table 2:  India’s top 10 agricultural commodities (Imports)

    [Value in Rs crores]

    S.N. Commodity 2015-16 2016-17 2017-18

    1

    Vegetable oils

    68677

    73047

    74996

    2

    Pulses

    25619

    28523

    18748

    3

    Fresh fruits

    11072

    11241

    12525

    4

    Cashew nut

    8701

    9027

    9134

    5

    Spices

    5400

    5758

    6377

    6

    Cotton raw

    2566

    6337

    6306

    7

    Sugar

    4038

    6868

    6036

    8

    Wheat

    873

    8509

    2358

    9

    Misc processed items

    1811

    2116

    2238

    10

    Cocoa products

    1399

    1540

    1472

     

    India's total agri and allied imports

    140311

    164680

    152061

    Source: Department of Commerce

     

    f.  Share of top 10 exported and imported agri-commodities during 2017-18 is as follows:

     

    Export share in 2017-18 (top 10 items)              

    Import share in 2017-18 (top 10 items)

     Source: Department of Commerce

    4. Foreign Direct Investment (FDI) Policy in Agriculture

     

    4.1       Hundred percent FDI has been allowed in development and production of seeds and planting material. In addition, 100% FDI is allowed for floriculture, horticulture and cultivation of vegetables and mushrooms under controlled conditions. Also, hundred percent FDI is allowed in animal husbandry (including breeding of dogs), pisciculture, aquaculture and services related to agro and allied sectors. Similarly, hundred percent FDI is allowed in the planation sector namely tea, coffee, rubber, cardamom, palm oil tree and olive oil tree.

     

    4.2       From April 2000 to December 2018, FDI inflows of Rs. 13,508 crores have been received in agriculture sector (i.e. agriculture services including agriculture machinery) (Source :DIPP). The investments were made in development and production of seed and planting material, horticulture and nursery services, agriculture machinery, plant protection services, cattle breeding and livestock rearing, cold storage and warehousing.

     

    5          Goods and Services Tax:

    5.1          Government has rolled out a new tax regime namely Goods and Services Tax (GST) with effect from 1st July 2017. GST envisages to introduce a single tax on supply of goods and Services or both, by amalgamating all the central indirect taxes (excise duty, countervailing duty and service tax) and state indirect taxes (VAT, luxury tax, entry tax, octroi, etc). GST is more comprehensive, compliable, simple, harmonized and development oriented tax system. The GST, unlike the earlier system, will allow the supplier at each stage to set-off the taxes paid at previous levels in the supply chain. It is essentially a tax on value added at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain, with set-off benefits at all the previous stages (GOI).

    5.2.         Impact of GST on Agricultural Sector: The impact of GST on agricultural sector is foreseen to be positive. It has been observed that the fitment of rates of items in the food segment is done in a manner that it would not increase inflation. It has been done on the principle that GST rate would be more or less at par with current indirect tax regime.

    Mostly all services activities relating to agriculture are currently exempted from the levy of service tax under GST.

    6. PTA/FTA, WTO, Agri-cells

    6.1       PTA/ FTA/ RCEP

    Negotiations on India-Peru Trade Agreement, India-Israel FTA Negotiation, India Mauritius Comprehensive Economic Cooperation & Partnership Agreement (CECPA), Regional Comprehensive Economic Partnership (RCEP) is under consideration. Rules of Origin chapter in the proposed Economic and Technical Cooperation Agreement (ETCA) between India and Sri Lanka is also under consideration in this year.

    6.2.      WTO Meetings

    Officer for Agriculture Trade Policy Division has participated in 87th Meeting of Committee of Agriculture, World Trade Organisation at Geneva, Switzerland. Issues related to quantitative restriction on pulses was replied and inputs were also shared with Department of Commerce.

    6.3       Strengthening India’s Agri Export – Creation of Agri-Cells in nations abroad

    Agri-cells were created and officials were nominated by Ministry of External Affairs in the top 10 agriculture produce export destinations, to robust agri-export, handle agri –trade and related issues. Till now Agri-Cell is formed in 6 countries namely UAE, USA, Saudi Arabia, Vietnam, China and Nepal.

    7 Phasing out of Foreign Investment Promotion Board (FIPB):
    As per Government’s decision, the Foreign Investment Promotion Board (FIPB) under Ministry of Finance will be phased-out in 2017-18 as at present 91-95% FDI inflow happens through the automatic route. The move to phase out the FIPB is aimed at making India more attractive FDI destination and increasing FDI inflows by providing greater ease of doing business and promoting the “Maximum Governance and Minimum Government” principal. The work relating to processing of applications for FDI approval shall now be handled by the concerned Ministries/ Department in consultation with DIPP.

    .

    ***

     

     

     

  • Commodity Profiles

    Rice Profile
    Wheat Profile
    Sugar Profile
    Edible Oil Profile
    Pulses Profile
    Cotton Profile
  • Country brief on agriculture trade relations

    Agri Trade India -Belgium 2015-16
    Agri Trade India -Brunei 2015-16
    Agri Trade India -Lithuania 2015-16
    Agri Trade India -Namibia 2015-16.
    Agri Trade India -qatar 2015-16
    India - Indonesia Agri trade 2015-16
    India - Israel agri trade 2015-16
    India - UAE agri trade 2015-16
    India Argentina 2015-16
    India -Banladesh Agri trade 2015-16
    India -Brazil Agri trade 2015-16
    India -Cambodia agri trade 2015-16
    India -Canada trade 2015-16
    India -Ecoudor Agri trade 2015-16
    India -Finlend Agri trade 2015-16 -
    India -Germany Agri Trade 2015-16
    India -Greece Agri trade 2015-16
    India -Italy Agri trade 2015-16
    India -Jamaica Agri trade 2015-16
    India Luxemberg Agri Trade 2015-16
    India- Medagascar 2015-16
    India- Mongolia Agri Trade 2015-16
    India- Nepal 2015-16
    India -New Zeland Agri trade 2015-16
    India -Norway Agri trade 2015-16
    India -Peru Agri trade 2015-16
    India -Philippines Agri Trade 2015-2016
    India -Rawanda agri trade 2015-16
    India -Romania Agri trade 2015-16
    India -Russia Agri Trade 2015-16
    India -Serbia agri trade -2015-16
    India -Shri Lanka Agri trade 2015-16
    India -Singapur agri trade 2015-16
    India -Slovak agri trade 2015-16
    India- South Africa 2015-16
    India- Suriname Agri Trade 2015-16
    India -Syria agri Trade 2015-16
    India -Taiwan Agri trade 2015-16
    India -Trinidad Agri trade 2015-16
    India -USA agri trade 2015-16
  • Agriculture trade policy and status under FTAs

    Agriculture trade policy and status under FTAs
  • Trade data on agricultural commodities with bound rate and applied rate

    Trade data on agricultural commodities with bound rate and applied rate

    Department of Agriculture & Cooperation is dealing with agriculture items/ tariff lines of Indian Trade Classification (ITC) of the following chapters. These chapters cover around 380 tariff lines at 6 digit HS level. Data of export, import, bound rate* and current applied rate** of these lines for period from 2009-10 to 2016-2017 (Apr-Sept) (in value and quantity) is annexed.
    • Chapter 6 (Live trees and other plants)- 19 lines (export/import)
    • Chapter 7 (Edible vegetables)- 67 lines (export/import)
    • Chapter 8 (Edible fruit and nuts)- 70 lines (export/import)
    • Chapter 9 (mate and spices excluding tea and coffee)- 42 lines (export/import)
    • Chapter 10 (Cereals)- 31 lines (export/import)
    • Chapter 11(Products of the milling industry)- 29 lines (export/import)
    • Chapter 12 (Oil seeds and oleaginous fruits)- 53 lines (export/import)
    • Chapter 14 (Vegetable plaiting materials)- 5 lines (export/import)
    • Chapter 15 (vegetable oils)- 32 lines (export/import)
    • Chapter 17 (raw and refined sugar under heading 1701)- 6 lines (export/import)
    • Chapter 23 ( oil meals) -23 lines (export/import)
    • Chapter 52 ( raw cotton of subheading 5201,5202 and 5203) – 5 lines (export/import)

    In 2015-16, our major agriculture exports were- rice (chap 10), cotton (chap 52), sugar (chap 17), cashew nuts (chap 8), castor oil ( chap 15), genus capsicum (chap 9), onion ( chap 7), seas mum seeds (chap 12), and guargum (chap 13).
    In the same year, our major agriculture imports were- crude and refined palm oil (chap 15), crude soya bean oil (chap 15), raw cashew nuts (chap 8), crude sunflower oil (chap 15), lentils (chap 07) ,peas (chap 7), almonds in shell (chap 8), moong/urad ( chap 7) and chickpeas ( chap 07)
    * Bound Rate- It is the highest level of duty notified in WTO that the country can impose
    ** Current Applied Rates- Duties applicable as on date

  • Trade Statistics

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