By Dipak Kurmi
India’s agricultural trade has undergone a dynamic transformation in recent years, reflecting both its global market prowess and domestic production constraints. In the fiscal year 2024-25, agricultural exports rose by 6.4% to $51.9 billion, a notable increase from $48.8 billion in 2023-24, outpacing the near-stagnant 0.1% growth in overall merchandise exports, which edged up from $437.1 billion to $437.4 billion. However, agricultural imports surged by 17.2%, climbing from $32.9 billion to $38.5 billion, compared to a 6.2% rise in total merchandise imports (from $678.2 billion to $720.2 billion). This disparity has halved India’s agricultural trade surplus from $27.7 billion in 2013-14 to $13.4 billion in 2024-25, underscoring structural challenges and the pressures of impending trade agreements with the United States and European Union, which seek tariff reductions and greater market access. As India navigates this complex landscape, its agricultural trade reflects a delicate balance between leveraging export opportunities, addressing import dependencies, and safeguarding domestic interests.
Over the past decade, India’s agricultural exports have followed a volatile trajectory. From $43.3 billion in 2013-14, exports declined to $35.6 billion by 2019-20, hampered by a crash in global commodity prices, as evidenced by the UN Food and Agriculture Organization’s (FAO) food price index dropping from 119.1 to 96.5 points. A recovery began post-2020, driven by rising global prices (FAO index peaking at 140.6 in 2022-23), culminating in a record $53.1 billion in 2022-23. By 2024-25, exports reached $51.9 billion, a 20% increase over 2013-14. Imports, however, have grown more steadily, soaring 148% from $15.5 billion to $38.5 billion over the same period. This import surge, particularly in vegetable oils and pulses, reflects stagnant domestic production and policy inconsistencies, such as low import duties that undermine efforts to boost local oilseed and pulse cultivation.
Marine products, predominantly frozen shrimp, remain India’s top agricultural export, valued at $7.4 billion in 2024-25, down from a peak of $8.1 billion in 2022-23. The United States (35% share), China (20%), and the European Union (15%) are key markets, but shipments to the U.S. face a 17.7% duty, including a 10% tariff imposed by President Donald Trump in April 2025. Trump’s proposal to raise this to 26%, currently on hold until July 9, 2025, threatens further erosion of India’s competitiveness. A 2025 Indian Express report noted that such tariff hikes could exacerbate the decline in marine exports, already strained by global supply chain disruptions. Despite these challenges, India has ascended to the fourth-largest exporter of marine products globally, with exports reaching 16.85 lakh metric tonnes in 2024-25, up from 10.51 lakh metric tonnes in 2014-15, according to posts on X.
Rice exports, both basmati and non-basmati, have been a standout success, reaching a record $12.5 billion in 2024-25 with 14.1 million tonnes of non-basmati and 6.1 million tonnes of basmati shipped. Basmati rice, primarily destined for West Asia, fetched $5.84 billion, surpassing its 2013-14 high of $4.86 billion. Non-basmati rice, largely exported to Africa, has benefited from strong demand and relaxed export restrictions. Spices, another cornerstone of India’s export basket, crossed $4 billion for the first time in 2024-25, with chilli, cumin, turmeric, and mint products leading the charge. However, India has become a net importer of traditional spices like pepper (34,028 tonnes imported vs. 17,890 tonnes exported) and cardamom (9,084 tonnes imported vs. 7,449 tonnes exported), reflecting reduced domestic competitiveness.
Coffee and tobacco exports also scaled new highs in 2024-25, driven by global supply shortages. India’s robusta coffee, used in instant coffee and espresso blends, benefited from depleted global stocks, projected to hit a 25-year low due to drought in Brazil and typhoon damage in Vietnam. Tobacco exports gained from crop failures in Brazil and Zimbabwe, reinforcing India’s position in niche markets. Fruits and vegetables, both fresh and processed, saw record exports, supported by growing demand in Asia and Africa. Buffalo meat exports exceeded $4 billion in 2024-25, though they remain below their 2014-15 peak of $4.8 billion, constrained by domestic supply chain issues.
Conversely, wheat, sugar, and cotton exports have suffered due to domestic shortages and policy interventions. Wheat exports, which peaked at $2.1 billion in 2021-22, and sugar exports, reaching $5.8 billion in 2022-23, faced bans or restrictions to control domestic inflation, particularly ahead of the 2024 elections. India continues to export refined sugar by processing imported raw sugar, with raw sugar imports rising correspondingly. Cotton, once a flagship export, tells a particularly grim story. Exports crossed $4.3 billion in 2011-12, but by 2024-25, India became a net importer, with imports ($918.7 million) outstripping exports ($575.7 million) from April to December 2024. The absence of yield-enhancing technologies since genetically modified Bt hybrids has reduced cotton output from 398 lakh bales in 2013-14 to 291 lakh bales in 2024-25, per a 2025 Indian Express analysis.
On the import side, vegetable oils and pulses dominate, driven by low domestic yields and inadequate policy support. Vegetable oil imports, meeting 60% of India’s requirements, reached $14 billion in 2024-25, second only to the $20.8 billion peak in 2022-23, fueled by the Russia-Ukraine war’s impact on global prices. Pulses imports hit a record $5.5 billion in 2024-25, up from an average of $1.7 billion (2018-23), due to a poor 2023-24 crop. The lack of a robust minimum support price (MSP) system for oilseeds and pulses, unlike for rice and wheat, discourages farmers from scaling up production, perpetuating import reliance. A 2024 Drishti IAS report criticized low import duties on pulses and oils for undermining crop diversification efforts, which aim to shift farmers to less water-intensive crops.
Cotton and natural rubber imports have also surged due to declining domestic production. Rubber output averaged 8.5 lakh tonnes over the last three years, down from 9-9.1 lakh tonnes until 2012-23, while consumption rose from 10 lakh to 15 lakh tonnes. Other significant imports include fruits (almonds, pistachios, apples), spices (pepper, cardamom), and alcoholic beverages. India’s import of tree nuts, particularly almonds from the U.S., was valued at $932 million in 2023, per a USDA report, highlighting growing demand among India’s expanding middle class.
India’s ongoing trade negotiations with the U.S., EU, and UK add complexity to this scenario. These partners are pushing for tariff reductions and relaxed non-tariff barriers, particularly for genetically modified crops like maize, soybean, and cotton. The U.S., India’s top agricultural market with $6.6 billion in bilateral trade in 2024, imposes high tariffs on Indian exports (e.g., 17.7% on shrimp) while facing India’s 37.7% average tariff compared to its 2.6%. A proposed 26% U.S. tariff could disrupt exports of rice, shrimp, and buffalo meat, which constitute 46% of India’s farm trade with the U.S., per Rau’s IAS. The EU and UK seek market access for dry fruits, wines, and spirits, potentially increasing India’s import bill. However, free trade agreements (FTAs) could boost Indian exports of rice, spices, and horticultural products, with the EU’s zero tariffs on rice under WTO quotas offering opportunities, according to IAS Express.
These FTAs pose both opportunities and risks. Lower tariffs could enhance India’s export competitiveness, encouraging diversification into high-value crops like kiwifruit and berries, supported by investments in cold chains and agritech, as noted by NextIAS. However, cheaper imports of oils, pulses, and nuts could depress domestic prices, threatening farmers’ incomes, particularly for pulses and dairy producers. The U.S. farm lobby’s push for maize and soybean access, coupled with India’s high tariffs (e.g., 70% on natural rubber, 100% on walnuts), could intensify import pressures, per Outlook Business. India’s proposal for a “zero-for-zero” tariff strategy, eliminating duties on select goods, aims to mitigate these risks without committing to full FTAs, per Rau’s IAS.
India’s agricultural trade challenges are compounded by structural issues. Small landholdings, inadequate R&D (0.5% of agricultural GDP), and high post-harvest losses (30% for fruits and vegetables) limit competitiveness, per FAO and Rau’s IAS. Export restrictions, such as onion bans, disrupt supply chains, reducing India’s reliability in global markets, while non-tariff barriers like EU pesticide bans on basmati rice hinder exports, per Drishti IAS. The Agriculture Export Policy (2018) and Districts as Export Hubs initiative aim to address these, but inconsistent policies, like zero duties on pulses, undermine long-term goals.
To sustain its trade surplus, India must enhance productivity through R&D, modernize supply chains, and leverage FTAs strategically. Climate-resilient farming and market intelligence units could stabilize production and exports, per NextIAS. Balancing consumer affordability with producer incentives requires a rational export-import policy, replacing bans with temporary tariffs, as suggested by economist Harish Damodaran. With a population of 1.4 billion and rising incomes, India’s agricultural trade holds immense potential, but navigating global pressures and domestic constraints will determine whether its surplus endures or dwindles further.
(The writer can be reached at dipakkurmiglpltd@gmail.com)
