Trade Division is entrusted with the responsibility of making policy recommendations on export and import of agricultural commodities. Trade 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 Foreign Investment Promotion Board (FIPB)on FDI in agriculture, with Ministry of Finance in matters relating to the modification in the Custom/Excise duties on agricultural commodities and with Ministry of Commerce in matters relating to Preferential Trade Agreements (PTAs)/Free Trade Agreements (FTAs) with different countries.
The following work has been allocated to trade division :-
- Working with Department of Commerce in Formulation of India’s position in WTO Agreement on Agriculture and other allied agreements.
- 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.
- Formulation of policy relating to Foreign Direct Investment in Agriculture, in consultation with DIPP.
- Examination of FDI proposals received from Foreign Investment Promotion Board (FIPB).
- Compilation/analysis of data relating to export and import of agriculture commodities.
- Budget proposals including suggestions in respect of modification in customs duties
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, guar gum and castor oil. As per WTO’s Trade Statistics, India’s share in agricultural export and import in the world were 2.46% and 1.46% respectively in 2014. During this year, India’s total global agriculture & allied export and import were at US$ 43.47 billion and US$ 27.31 billion respectively.
Agriculture trade policy
Exports - Presently exports of principal agricultural products including rice, wheat, sugar, cotton, fruits and vegetables are “free” without any quantitative restrictions. Export of pulses (excluding kabuli channa) and edible vegetable oil in bulk (excluding coconut oil and rice bran oil) is ‘restricted’ to meet the domestic demand.
Imports- Imports of principal agriculture products are mostly “free” without any quantitative restrictions.
India’s agricultural Exports
Agricultural exports decreased from Rs. 2,62,778 crores in 2013-14 to Rs. 2,13,555 crores in financial year 2015-16 with a decline of nearly 18%. During 2015-16 marine products, basmati & non-basmati rice, buffalo meat, spices and cotton were top commodities of India’s agriculture exports. The share of agricultural exports in total exports of the country decreased from 13.79 % in 2013-14 to 12.46% in 2015-16.
India’s agricultural Imports
India’s agricultural imports increased from Rs. 85,727 crores in 2013-14 to Rs 1,39,933 crore in 2015-16 registering a growth of nearly 63%.Increase in value of agricultural imports during this period was primarily on account of imports of vegetable oils, pulses, cashew nuts, spices and sugar. Share of agricultural imports in the total imports increased from 3.16% in 2013-14 to 5.63% in 2015-16.
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.
- Animal Husbandry (including breeding of dogs), Pisciculture, Aquaculture, under controlled conditions.
- Services related to agro and allied sectors.
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.
Besides the above, FDI is not allowed in any other agricultural sector/ activity.