Sealed Borders, Silent Fields: Why Indian Agriculture Hesitates at the FTA Table

ECONOMY & AGRICULTURE

🎯 Thematic Focus:

Trade Policy | Agricultural Economy | Global Market Access | Centre–State Coordination

🕊️ Opening Whisper

In a world trading across borders, Indian farms still wait behind gates.

🔍 Key Highlights:

• While India actively negotiates Free Trade Agreements (FTAs) with countries like the UK, EU, Australia, and UAE, the agriculture sector remains largely excluded.
• India opted out of the RCEP citing fears of an import surge in sensitive sectors like dairy and pulses.
• Agriculture is a State subject, whereas Trade is on the Union List, leading to fragmented policy responses, bans, and export restrictions.
• Infrastructure gaps in cold chains, logistics, and processing hubs make India’s agri-exports uncompetitive, especially from landlocked regions.
• Key concerns include non-compliance with Sanitary and Phytosanitary (SPS) standards, pesticide residues, and packaging issues.

🌍 Global Examples:

• Thailand: Over 18 FTAs; industrial crops like rubber, cassava, and strong agro-processing chains.
• Brazil: Strategic focus on mechanisation, infrastructure, and exports in soy, beef, and coffee — over $166 billion in agri-exports.

India’s Current Strengths:

• Basmati rice accounts for over 21% of India’s agri-exports.
• Growing niche in GI-tagged and organic products under schemes like One District One Product (ODOP).
• Agencies like APEDA offer support in quality certification and capacity building.

🚧 Why India Holds Back

1. Farmer Vulnerability: Cheap imports could hurt smallholders in dairy, oilseeds, pulses.
2. Lack of Branding: Commodities dominate, with little value addition.
3. Policy Uncertainty: Frequent bans, export quotas reduce global trust.
4. Infrastructural Weakness: Cold chains and agri-export hubs remain underdeveloped.
5. Regulatory Gaps: Poor compliance with global SPS standards and traceability norms.

🛠️ Pathways to FTA-Readiness

• Branding & Processing: Shift from raw commodities to value-added exports.
• National Agricultural Trade Council: Coordinate Centre–State–Industry voices.
• Infrastructure: Invest in cold storage, container depots, and rural logistics.
• Digital Trade Compliance: Create single-window export systems.
• DBT over Subsidies: Encourage crop diversification and global competitiveness.

📘 GS Paper Mapping:

• GS Paper 3: Agriculture – Marketing and Trade, Infrastructure
• GS Paper 2: Federalism – Centre-State Relations
• GS Paper 3: Economy – Free Trade Agreements, Globalization

✨ A Thought Spark — by IAS Monk

Trade isn’t just a policy. It’s a mirror. If our farmers can’t see their reflection in it, then the mirror is broken. And we must fix the frame — before opening the gate.

High Quality Mains Essay For Practice :

Word Limit 1000-1200

Why Indian Agriculture Remains Absent from Free Trade Agreements: Fear, Gaps, and the Way Forward

Introduction

India has embraced global trade diplomacy in recent years — inking bilateral trade agreements with the UAE, Australia, and negotiating with the UK, EU, and Canada. Yet one crucial sector often sits on the sidelines of these deals: agriculture. Despite being a pillar of India’s rural economy, employing over 40% of the workforce, agriculture has been conspicuously missing from India’s most ambitious Free Trade Agreements (FTAs). The reasons are complex — and rooted in farmer vulnerability, policy asymmetry, infrastructure gaps, and global regulatory mismatches.

Why is Agriculture Being Left Out?

1. Fear of Import Surges

India’s exit from the Regional Comprehensive Economic Partnership (RCEP) in 2019 was driven largely by the fear that cheap dairy and grain imports from New Zealand, Australia, and Southeast Asia would displace local farmers. Indian smallholders, with average landholdings of less than 2 hectares, cannot compete with highly mechanized, subsidized, or export-driven agribusinesses from developed nations.

2. Agriculture–Trade Jurisdiction Divide

Agriculture is a State subject, while foreign trade is under the Union list. This constitutional division leads to inconsistent or contradictory policies — sudden export bans, restrictions on onions or rice, or delayed quarantine clearances. Exporters often complain of bureaucratic uncertainty, which erodes global buyer confidence.

3. Infrastructure Deficiency

India lacks robust infrastructure for high-value agricultural trade. Most inland states do not have cold chains, agro-processing clusters, or efficient port connectivity. This means that even if market access is negotiated through an FTA, India may not be able to meet quantity, quality, or delivery timelines.

4. Regulatory Barriers and SPS Norms

Indian farm exports often fall short on Sanitary and Phytosanitary (SPS) standards — especially for residues of pesticides, aflatoxins, and microbiological contamination. Lack of traceability and certification systems hinders agricultural integration into global supply chains.

Learning from Global Peers

• Thailand has signed over 18 FTAs, boosting exports of rubber, fruits, and processed food. It leverages industrial-scale processing and global branding.
• Brazil built agri-exports worth over $166 billion, using mechanisation, logistics corridors, and market-focused research. Its success in soy, beef, and coffee is rooted in both efficiency and diplomacy.

India’s Strengths in Agri-Trade

Despite the cautious approach, India holds several advantages:

• Basmati Rice accounts for 21% of total agri-exports and has strong global brand value.
• GI-tagged products (like Alphonso mangoes, Darjeeling tea, Bhut Jolokia) and initiatives like One District One Product (ODOP) can unlock niche markets.
• APEDA (Agricultural and Processed Food Products Export Development Authority) facilitates certification, branding, and training, although it needs deeper outreach to smallholders.

Agri-FTA Readiness: What Needs to Change

1. Shift to Branding & Value Addition

Move from bulk commodities to branded, packaged, organic, or ready-to-eat exports. Agro-processing must become central to India’s FTA strategy.

2. Institutional Coordination

Establish a National Agricultural Trade Council, with representation from Centre, States, exporters, and farmer groups to build consensus on FTA inclusions.

3. Infrastructure Modernisation

Set up agri-export clusters, cold storages, rural logistic corridors, and inland container depots in landlocked states to bridge last-mile gaps.

4. Regulatory Reforms

Create digital, single-window export systems; harmonize domestic pesticide standards with global MRLs (Maximum Residue Limits); improve SPS labs.

5. Reforms in Subsidy System

Replace input subsidies with Direct Benefit Transfers (DBT) to incentivize farmers to diversify crops and adopt export-oriented practices.

Government Steps So Far

• Agri Export Policy 2018: Targets product diversification, value addition, and better branding.
• PKVY & NPOP: Promoting organic farming and certification for global markets.
• APEDA’s Support: Facilitates traceability, GI tagging, and buyer-seller meets.
• Bilateral Negotiations: India continues to negotiate tariff and non-tariff barriers reduction for its agri-exports in multiple FTAs.

Conclusion

India’s caution in keeping agriculture out of FTAs is not unfounded — it shields vulnerable farmers from sudden global shocks. But in the long run, this approach may prove strategically limiting. A phased, reform-oriented model with smart branding, deep coordination, and farmer empowerment can help unlock India’s true agricultural export potential.

In a globalised economy, Indian agriculture must learn not just how to grow — but how to go global.

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