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India Delivers Just 3.7% of Promised Export-Restricted Food Commodities to Committed Countries Over Two Years


Published Date: June 05, 2024
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Due in part to steps taken to control domestic prices, India has only been able to deliver about 73,000 tonnes, or 3.7%, of the agricultural goods guaranteed to its major collaborators under bilateral arrangements. Due to Indian exporters who Agro-Commodities Exporters are quoting prices greater than the ones of other top producer nations as a result of the G2G agreement, some farm exports from India are no longer competitive. According to a senior government source, another factor is the lower amounts that the Indian government has permitted due to the necessity to safeguard homegrown supplies.

Prices of Indian exports are higher due to a 20% export duty.

The National Cooperative Exports Ltd., or NCEL, was founded last year, and its involvement in the supply chain has resulted in longer supply chains and greater costs. These factors have combined to drive up the prices of Indian exports. 20% export levies have been imposed on essential commodities. In response to subpar crops over the previous two years, India implemented a number of policies aimed at reducing food inflation, including export restrictions on wheat, broken rice, non-basmati white rice, sugar, and onions. While some of these are more recent, like onion, others date back to 2022.

But in an effort to strengthen its position in the global south, the government lifted the export prohibition on a few of these goods, which are sold through National Cooperative Exports Ltd., an export organisation it set up in accordance with the Multi State Cooperative Societies (MSCS) Act, 2002.

India's G2G Food Export Commitments Fall Short Due to Price and Logistics Issues

Under G2G agreements, for sellers looking to export bulk agro-commodities India has authorised the export of 1.93 million tonnes of non-basmati white rice, broken rice, sugar, wheat, and onions over the past two years to nations like Bhutan, Bangladesh, Cote D'Ivoire, Egypt, Kenya, Nepal, Philippines, Rep. Guinea, Singapore, and the United Arab Emirates. But at the end of April this year, according to the official mentioned above, NCEL could only supply 3.9% of the allotted non-basmati rice, 3.2% of broken rice, 3% of wheat, and none of the sugar.

"This, we have been informed, is due to the fact that, in addition to our less competitive prices, some countries were requesting a waiver of the 20% export duty that was applied on different kinds of rice, while others demanded exports in tranches." According to the official, “the government is having trouble exporting food items that are restricted at the G2G level to 13 countries, and exporters have been found to be lying with huge quantities of food.”

Conclusion

Due to demands from importing nations, logistical challenges, and high domestic pricing, India finds it difficult to fulfill its food export obligations. Competitiveness has been weakened by policies like a 20% export duty and attempts to control inflation. In the last two years, just a small portion of the pledged quantities have been fulfilled, despite programs such the National Cooperative Exports Ltd.

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