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Trade

  • Overview

    Trade Overview
    Trade Overview

    Agriculture Trade Policy Division is entrusted with the responsibility of making policy recommendations on export and import of agricultural commodities. This 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.

    2. The following work has been allocated to Agri. Trade Policy Division:-

    • Working with Department of Commerce in Formulation of India’s position in WTO Agreement on Agriculture and other allied agreements/ matters.
    • Preparation of various returns/report to be notified to WTO.
    • All matters relating to international trade including policy recommendations in respect of agricultural Commodities.
    • Examination of proposals received from Department of Commerce relating to negotiations in respect of agricultural commodities in various Preferential Trading Arrangement (PTA)/ Free Trade Areas (FTA) and formulation of India’s offer and request list.
    • Examination of export and import proposals received form DGFT relating to agriculture commodities.
    • Furnishing inputs to DIPP on formulation of policy on Foreign Direct Investment in Agriculture sector/ activities. Processing and examination of proposals for FDI approval on agriculture sector/ activities.
    • Compilation/analysis of data relating to export and import of agriculture commodities.
    • Budget proposals including suggestions in respect of modification in customs duties and GST.

    3. India’s position in global agriculture trade

    India is among the 15 leading exporters of agricultural products in the world. The country has emerged as a significant exporter in certain agriculture items like rice, meat, spices, raw cotton and sugar. India has developed export competitiveness in certain specialized agriculture products like basmati rice, non-basmati rice, spices, cotton, coffee, cashew, guar gum, marine products, buffalo meat and castor oil. As per WTO’s Trade Statistics, India’s share in agricultural export and import in the world were 2.13% and 1.81% respectively in 2016. World’s top 15 exporters of agricultural products in 2016 are given below.

    4. Agriculture trade policy

    4.1 Exports - Presently exports of principal agricultural products including rice, wheat, sugar, cotton, fruits and vegetables are “free” without any quantitative restrictions. Only export of mustard oil in bulk is restricted.

    4.2 Imports- Imports of principal agriculture products are mostly “free” without any quantitative restrictions except tur (quantitative restrictions of 2 lakh tons per year w.e.f. 5.8.2017) and urad & moong (quantitative restrictions of 3 lakh tons per year w.e.f 21.8.2017).

    5 India’s agricultural Exports: Agricultural exports increased from Rs. 2,26,651 crores in 2016-17 to Rs. 2,50,272 crores in financial year 2017-18 with an increase of 10.42%. During 2017-18 marine products, non-basmati rice, spices, coffee, cashew and guargum meal were top commodities of India’s agriculture exports. The share of agricultural exports in total exports of the country is 12.80% in 2017-18. Share of agriculture in India’s total exports for the last six years is given below.

    5.1 India’s top 15 agricultural export commodities in terms of quantity and value for the year 2015-16, 2016-17 and 2017-18 are given below.

    Table 1: India's top 15 agricultural export commodities

    Quantity: '000 tonnes Value in Rs. Crores

    Sl.NO. DESCRIPTION 2015-16 2016-17 2017-18
    Qty Value Qty Value Qty Value
    1 Marine Products 978 31219 1185 39594 1430 47635
    2 Rice- Basmati 4046 22719 3985 21513 4052 26841
    3 Buffalo Meat 1314 26684 1324 26161 1348 25988
    4 Rice(Other than Basmati) 6465 15483 6771 16930 8633 22927
    5 Spices 832 16630 1014 19111 1081 20014
    6 Cotton Raw incl. Waste 1347 12821 996 10907 1097 12156
    7 Oil Meals 2056 3600 2632 5410 3527 6969
    8 Castor Oil 587 4616 599 4522 697 6730
    9 Coffee 256 5125 289 5646 318 6246
    10 Cashew 103 5028 92 5279 90 5945
    11 Tea 246 4719 243 4906 273 5396
    12 Sugar 3844 9825 2544 8660 1758 5229
    13 Fresh Vegetables 2104 5237 3404 5791 2296 4997
    14 Fresh Fruits 655 4191 817 4974 657 4746
    15 Guargam Meal 325 3234 420 3107 494 4170

    Source: DGCIS, Kolkata

    6 India’s agricultural Imports: India’s agricultural imports decreased from Rs. 1,64,726 crores in 2016-17 to Rs 1,52,061 crore in 2017-18 registering a decline of nearly 7.66%. Decrease in value of agricultural imports during this period was primarily on account of imports of wheat, pulses and sugar. Share of agricultural imports in the total imports is 5.08% in 2017-18. Share of agriculture in India’s total imports for the last six years is given below.

    6.1 India’s top 15 agriculture commodities imported during year 2015-16, 2016-17 and 2017-18 are in the statement given below:

    Table 1: India's top 15 agricultural import commodities

    Quantity: '000 tonnes Value in Rs. Crores

    Sl.NO. Items 2015-16 2016-17 2017-18
    Qty Value Qty Value Qty Value
    1 Vegetable Oils 15644 68677 14007 73039 15361 74996
    2 Pulses 5798 25619 6609 28523 5607 18748
    3 Fresh Fruits 858 11072 1058 11291 995 12525
    4 Cashew 962 8701 775 9027 654 9134
    5 Spices 1971 5400 2423 5760 2207 6378
    6 Cotton Raw incl. Waste 233 2566 500 6339 469 6306
    7 Sugar 1943 4038 2146 6869 2403 6036
    8 Alcoholic Beverages 2936 3590 3876
    9 Wheat 518 873 5749 8509 1650 2358
    10 Misc. Processed Items 1811 2116 2238
    11 Cocoa Products 564 1399 636 1542 712 1473
    12 Coffee 656 802 780 927 772 997
    13 Processed Fruits and Juices 405 526 430 548 536 803
    14 Marine Products 503 640 520 633 447 793
    15 Fruits/ Vegetable Seeds 143 703 141 653 160 764

    Source: DGCIS, Kolkata

    7. FDI Policy in Agricultural Sector:

    As per the present FDI Policy, 100% FDI is allowed in the following activities of agriculture through automatic route:

    • Floriculture, Horticulture, Apiculture and Cultivation of Vegetables & Mushrooms under controlled conditions;
    • Development and Production of seeds and planting material; and
    • Services related to agro and allied sectors.

    7.1 100% FDI is also permitted in plantation sector namely Tea plantations, Coffee plantations, Rubber plantations, Cardamom plantations, Palm Oil plantations and Olive oil tree plantations through automatic route. 100 percent FDI is allowed in “Single Brand product retail trading”. 51% FDI is permitted in “multi brand retail trading” with condition that fresh agricultural produce, including fruits, vegetables, flowers grains, pulses may be unbranded.
    7.2 Besides the above, FDI is not allowed in any other agricultural sector/ activity.

    8 Goods and Services Tax:

    I 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 present 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).

    p> I I 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.

    III. Projected benefits of GST on Agricultural Sector: As the GST is being introduced with the objective of having a unified tax structure for goods and services, this is likely to lead various benefits for agricultural sector:

    a) Unified market - the amalgamation of various taxes into one will simplify the Procedure and help in evolution of a common market at national level.

    b) Increase in exports due to cost effective production

    c) The burden of tax on goods is expected to fall under GST leading to benefits to the consumers.

    d) This is likely to facilitate and strengthen the Scheme on National Agricultural Market (NAM) aimed at an integrated system of market of agriculture produce at the national level, allowing free flow of agricultural commodities across states

    e) The implementation of GST is expected to facilitate the implementation of National Agricultural Market on account of subsuming all kinds of taxes/cess on marketing of agricultural produce as well as it would ease interstate movement of agricultural commodities which would improve marketing efficiency, facilitate development of virtual markets through warehouses and reduce overhead marketing cost.

    f) Agricultural commodities are perishable in nature in varying degrees therefore trade is influenced by the time required for transportation. The simple uniform tax regime is expected to improve the transportation time, and curtail wastage of precious food.

    g) GST is essential to improve the transparency, reliability, timeline of supply chain mechanism. A better supply chain mechanism would ensure a reduction in wastage and cost for the farmers/retailers. GST would also help in reducing the cost of heavy machinery required for producing agricultural commodities.

    IV. A GST Cell under the Chairmanship of Trade Adviser has been formed to receive grievances, if any, from farmers and others. The GST Cell examines the complains, grievances, proposals and coordinates with Department of Revenue for resolving them immediately.

    V. Services Tax on agricultural sectors: Mostly all services activities relating to agriculture are currently exempted from the levy of service tax under GST.

    9. 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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