Agricultural Exports to Increase by 50% in Five Years
The Ministry of Commerce estimates that the trade agreement between India and the UK will lead to a 30-50% increase in agricultural exports, including processed foods, by 2030. Exports of Indian agricultural products to the UK have already increased by over 20% in the past two years, reaching $98 million by the end of the 2024-25 fiscal year.
The trade agreement with the UK is expected to come into effect after one year, and by 2030, India’s agricultural exports to the UK market (India-UK Trade Deal) are projected to reach $1.5 billion. Currently, agricultural products exported to the UK from India are subject to tariffs ranging from 2% to 14%, but under this agreement, these tariffs will be eliminated, allowing Indian products to compete with products from countries like China, Vietnam, Brazil, Peru, and Egypt.
However, there are several challenges in increasing exports:
Two Key Challenges
- First Challenge: The key issue is how to keep fruits like mangoes, lychees, grapes, and other vegetables fresh for a longer period. Only by extending their shelf life can the export of vegetables and fruits in large quantities become possible.
- Second Challenge: Although there is a huge potential for agricultural exports from states like Bihar and Uttar Pradesh, there is no direct export facility from these areas. Currently, goods have to be sent to Mumbai or Kolkata first, which increases transportation costs.
APEDA's Efforts
APEDA aims to develop direct export facilities via air route from Bihar and Eastern Uttar Pradesh by next year. This will allow exports of products like Makhana, lychees, and mangoes from Bihar and various vegetables and fruits from Eastern Uttar Pradesh directly to the UK, reducing transportation costs. Additionally, efforts are underway to develop technology that will allow fruits like lychees and mangoes to be stored and consumed for up to a month.
Increased Export Possibility and Tariffs on Agricultural Products
| Product | Current Tariff |
|---|---|
| Grapes | 8.00% |
| Onions | 4.50% |
| Natural Honey | 16% |
| Bananas | 16% |
| Biscuits | 4.50% |
| Bakery Products | 4.50% |
Training for Proper Pesticide Application
According to APEDA, European countries have raised concerns about the pesticides used in Basmati rice production. To address this, farmers are being trained in the proper use of pesticides, including the use of drones for spraying and understanding the correct quantities. These efforts aim to reduce challenges within the next year and ensure compliance with international standards.