कृषि, सहकारिता एवं किसान कल्याण विभाग Department of 
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.
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