At A Glance: Indian Export Market

IP-Indian Export Mkt, Graph-150730
Data Source: FAS Global Agricultural Trade System; United Nations
Jul 30, 2015
ARLINGTON, VA -- Over the past several years, Asian exporters have looked to diversify their export markets and with relatively low prices, have grown their market share in many areas in Africa, the Western Hemisphere and in developing countries.  India has had phenomenal growth in their exports, particularly to developing countries which now account for nearly 80 percent of their exports.  In particular, least developed countries (LDCs) have become increasingly important markets for Indian exporters and the Indian agricultural trade surplus with these markets has soared.  India is now the world's seventh-largest agricultural exporter, up from 13th a decade ago.  In 2013, India became the top agricultural supplier to LDCs, with overall sales of $5.2 billion.  This is nearly $1 billion more than the European Union, which is the second largest supplier.

Rice is one of India's largest agricultural exports.  Indian rice exports grew from $2.4 billion in 2009 to more than $8 billion in 2013 and shipments have been particularly strong to LDCs.  In 2009, rice exports to LDCs accounted for only 3 percent of India's total rice exports; by 2013, it accounted for 22 percent!  Ironically, this increase in Indian exports has come at the same time many of these countries are seeking to attain rice self-sufficiency.

Rapidly increasing government support for both production and exports has contributed to India's surge in exports.  India's public stockholding program has been especially instrumental in increasing rice exports to LDCs.   As noted in the recent Section 332 study on Rice: the Global Competitiveness of the U.S. Industry, the Indian government purchases rice at minimum support prices that are announced well before the planting seasons.  There are also several types of subsidies for inputs, including fertilizer, irrigation, electricity, seeds, and machinery.

"Ensuring that there is a level playing field is becoming more important as many of our competitors are ramping up production and increasing their market share in our export markets," says Jim Guinn, USA Rice vice president for international promotion.  "That is why research which monitors our competitors, such as this Section 332 study, and a constant reevaluation of potentially new or growing markets is an important part of what we do."

 

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