India's Agricultural Export Policy: Performance, Gaps, And Reform Priorities

Policy Update
Tulsi Kumari

Introduction

India is the world’s second largest agricultural producer, however it contributes to only 2.35% share of global agricultural exports as of 2022. On the other hand, USA accounted for 9.55%, Brazil for 6.36% and China for 4.14% of global agricultural export share during the same period. Agriculture’s contribution to India’s total merchandise export for the period 2022-23 stood at 11.63%, declining from 13.90% in 2012-13.

India’s agricultural trade policy historically was embedded in the Foreign Trade Policy (FTP) which was administered by Ministry of Commerce and Industry (MoCI). Sector specific bodies such as APEDA, MPEDA, Tea Board, Coffee Board, Spices Board, etc. all operated in silos. It was only in 2010s that a meaningful shift was seen towards systematic export.

The Government of India as a result launched Agricultural Export Policy (AEP) in 2018. This was the country’s first standalone Agri-export policy. AEP was accompanied by various schemes such as the Trade Infrastructure for Export Scheme (TIES), Market Access Initiatives (MAI), Transport and Marketing Assistance (TMA) and the Remission of Duties and Taxes on Exported Products (RoDTEP). The broad objectives of the policy are:

double agricultural exports from ~US$ 30 billion to US$ 60 billion by 2022;
diversify the export basket and destinations;
promote value-added and high-value exports; and
provide a stable institutional framework for sanitary and phytosanitary (SPS) compliance and market access.

Functioning of Agricultural Export Policy

Image: Agri-Export Zones in India; Source: Grant Thorton

The AEP operates through two broad tracks which are mentioned below:

Track	Key Components
Strategic	Policy Measures; Infrastructure & logistics support; greater state government involvement in agri-export planning; Holistic approach to boost exports
Operational	Cluster-based product focus; value-added export promotion; ‘Brand India’ marketing; private investment attraction; Quality regulation; R&D

Table 1: Policy Recommendations under AEP 2018. Source: Government of India, Agriculture Export Policy, 2018, Ministry of Commerce & Industry.

The foundation of AEP lies at the ‘cluster- based’ approach. Geographic clusters are mapped to agro-climatic advantages for specific commodities such as rice, marine products, spices, banana, mango, and pomegranate. States are required to designate nodal agencies and frame State Action plans. As of 2020, 8 states which include Maharashtra, UP, Kerala, Tamil Nadu, Assam, Punjab, Karnataka, and Nagaland had designated nodal agencies and 16 states had constituted Stat-Level Monitoring Committees.

Agricultural and Processed Food Products Export Development Authority (APEDA) plays central coordinating role for the functioning of the policy. Financial support is channelled through APEDA’s Financial Assistance Scheme (FAS) which covers infrastructure, quality improvement, and market promotion.

Performance

India’s agricultural exports grew at a CAGR of approximately 17% between 2003 and 2013 but decelerated sharply to around 6.2% from 2014 to 2023. In absolute terms, total agricultural exports rose from US$ 7.92 billion in 2003-04 to US$ 52.50 billion in 2022-23 (Akshara et al., 2025).

Year	Agri Exports (US$ Bn)	Total Exports (US$ Bn)	Agri Share (%)
2013-14	43.43	314.87	13.79
2015-16	32.90	262.17	12.55
2018-19	39.27	330.04	11.90
2020-21	41.56	292.76	14.20
2021-22	49.59	422.00	11.75
2022-23	52.50	451.07	11.63

Table 2: India’s Agricultural Export Trends (2013–2023). Source: DGCI&S; compiled from Ashkra et al. (2025)

Key commodity-level trends across the two sub-periods are as follows:

The period from 2003 -13 reflected a high growth phase. Commodities like Maize, Meat and Offals, Cereals, Rice, Spices and Coffee performed well. However, the period from 2014-23 reflected slowdown phase. Meat and Offals turned negative and the growth in all other commodities declined significantly (Tantri, 2022). Value-added agricultural exports remain below 15% of the total agricultural exports, which is a major unmet objective of the AEP (Gulati et al., 2019).

Impact

The impact of AEP policy has been mixed which can be explored through the following aspects:

Impact on different Commodities

Marine products especially shrimp have shown a steady export growth. Basmati rice, spices such as pepper, cardamom, and cumin, and fresh vegetables have also grown consistently in global markets. After the removal of the non-basmati rice export ban in 2011, India became the world’s largest rice exporter (Chandrasekhar & Ghosh, 2019).

However, some exports have declined. Guargum was once a leading export, earning about US$ 4 billion between 2011 and 2013. By 2019–20, it had fallen sharply to about US$ 330 million. This drop was due to lower demand from the United States and delayed monsoons (Jha, 2014).

Meat and offals were major export drivers in 2013–14. In recent years, their exports have also declined significantly (Ashkra et al., 2025).

Institutional Outreach and State Engagement

The AEP’s emphasis on state-level participation has produced partial results. As of 2020, only 8 of 28 states had finalised State Action Plans (Economic Times, 2020), despite the policy’s intent to mainstream all states into agricultural export planning. Since agriculture is a State List subject under the Constitution but trade and commerce fall under the Union List, states have historically lacked a formal role in export policy. The design of AEP policy was meant to bridge this gap. However, implementation has been uneven and northeastern states in particular lack testing laboratories, cold chain infrastructure, and trained personnel, and these states often rely on Kolkata for produce testing (Tantri, 2022).

Recovery of Exports after 2016

Exports fell to US$ 32.9 billion due to lower global commodity prices and domestic policy restrictions between 2014-16. But by 2022-23, agricultural exports gradually recovered, reaching US$ 52.5 billion. The COVID-19 pandemic catalysed some export gains for rice, wheat and spices. Also, from 2019 to 2021-22, India’s share in global agricultural exports rose briefly from ~2.09% to ~2.35%. However, this recovery remains fragile (Ashkra et al., 2025).

Quality and Standards

APEDA’s Mahagrapes program helped grape exports to Europe. It kept farmers in Maharashtra informed about changing rules on pesticides and packaging (Tantri, 2022). This improved the acceptance of Indian grapes in European markets. Similar progress is seen in basmati rice exports. Iran, Saudi Arabia, and the UAE together buy about 72.19% of India’s basmati rice exports (APEDA). However, some problems still remain. For example, pomegranate exporters in Karnataka face difficulties in getting Global GAP certification. Because of this, they struggle to access European markets (Tantri, 2022).

Competitiveness Constraints

A structural obstacle to AEP’s impact is the Minimum Support Price (MSP) regime. MSP for key crops can be between 10.9% and 119.3% above international prices, directly eroding India’s price competitiveness in global markets (Kapoor, 2020). Additionally, the average Most Favoured Nation (MFN) applied tariff for agriculture stood at 36.5% in 2020-21 which is among the highest for any major agricultural exporter, a fact highlighted in WTO’s Trade Policy Review of India. Periodic export bans and minimum export price (MEP) requirements on commodities like rice, wheat, and onions have further damaged India’s reputation as a reliable supplier (WTO, 2019).

Emerging Issues

Old Policy in a New Form:The AEP’s cluster model is very similar to the earlier Agricultural Export Zones (AEZ) policy. However, it does not clearly explain why AEZ failed. The earlier policy had problems with coordination, infrastructure, and value chain management (Tantri, 2022).

Errors in Selecting Cluster: Some important products and states have been left out. Karnataka’s cashew and marine exports are not included in AEP clusters, even though they have high export value. Gujarat which is the top turmeric-producing state is not a part of the turmeric cluster. Tamil Nadu, which is strong in pomegranate production, has also been ignored. Instead, less productive states have been included (Tantri, 2022).

Lack of Infrastructure: India has only 207 registered pack houses as of January 2021. Out of these, 72% are in Maharashtra alone (APEDA, 2021). Cold storage facilities are limited. Ports lack enough space for perishable goods. Testing laboratories are also poorly developed, especially in the Northeast.

Problems in Trade Facilitation: Logistics costs in India are high. They make up 14 to 15% of export value, while in developed countries it is only 8 to 9%. The AEP does not require 24/7 single-window clearance for perishable goods. Its complaint system is optional, not compulsory.

Unclear Funding and Low Investment in Research:The AEP does not clearly mention how much money is given to states. Agriculture is mainly a state subject, while trade is handled by the Centre. This creates confusion and weak accountability. India spends only about 0.5% of its agricultural GVA on research and development. However in comparison, USA spends about 6.9% and Japan spends about 14.5% (Satishkumar et al., 2016; Ashkra et al., 2025). Low spending affects innovation, quality improvement, and traceability.

Weak Centre-State Coordination: There are communication gaps between APEDA and state agencies like KAPEC in Karnataka. Because of this, some export clusters do not match the real strengths of the states.

Reforms Needed to Strengthen Agricultural Export Competitiveness

For India to meaningfully expand its footprint in global agricultural trade, the following steps are needed:

Update product focus using real data and Improve basic facilities: India should choose which crops to promote for export based on clear data about how much is grown, how productive the land is and where India has an advantage compared to other countries. State governments must be involved in this process. The government should set aside special funds to build more pack houses, cold storage chains, and testing labs. These facilities should be spread fairly across all states. Right now, too many pack houses are concentrated in Maharashtra and therefore, this needs to be fixed quickly.

Improve Trade Facilitation: Mandate 24/7 single-window clearance at major ports; make grievance redressal portals mandatory; harmonise domestic farm practices with international SPS and GlobalGAP standards.

Scale R&D Investment: Increase agricultural R&D spending to at least 1% of agriculture GVA by 2027, with emphasis on traceability, residue management, and post-harvest technology.

Leverage Post-COVID Supply Chain Realignment: India must use the ongoing global supply chain reconfiguration as a strategic window to lock in long-term export relationships in rice, spices, and marine products since these are the sectors where it holds genuine comparative advantage.

Conclusion

India’s Agricultural Export Policy of 2018 has shown some positive results, with exports growing to US$ 52.5 billion by 2022-23. However, products like rice, shrimp and spices have performed well globally. However, the target of US$ 60 billion by 2022 was missed and overall progress has been slow. Key problems such as poor infrastructure, high logistics costs, weak state participation, frequent export bans and low investment in research continue to hold India back. These issues prevent India from competing with countries like the USA, Brazil, and China in the global agricultural markets.

India has strong potential due its vast farming base and diverse crops. But without fixing these structural gaps and improving Centre-State coordination, agricultural exports will continue to grow well below their true potential.

References

Aggarwal, A. (2004). Export processing zones in India: Analysis of the export performance (ICRIER Working Paper No. 148). Indian Council for Research on International Economic Relations. DOI: https://hdl.handle.net/10419/176170

Agricultural and Processed Food Products Export Development Authority. (n.d.). Agriexchange: India exports statistics. APEDA. http://agriexchange.apeda.gov.in/

Ashkra, Jadaun, K. K., & Khan, A. A. (2025). Analysis of agricultural export performance and policy prospects in India: A two-decade review (2003–2023). Asian Journal of Agricultural Extension, Economics & Sociology, 43(6), 91–98.DOI: https://doi.org/10.9734/ajaees/2025/v43i62764

Chandrasekhar, C. P., & Ghosh, J. (2019). The dynamics of India’s rice exports boom. The Hindu Business Line. https://www.thehindubusinessline.com/opinion/columns/c-p-chandrasekhar/the-dynamics-of-indias-rice-export-boom/article25994349.ece

Directorate General of Commercial Intelligence and Statistics. (2023). Export-import data bank. Ministry of Commerce and Industry, Government of India. https://tradestat.commerce.gov.in/

Government of India. (2018). Agriculture export policy. Ministry of Commerce and Industry. https://commerce.gov.in/wp-content/uploads/2020/01/AgriculturalExportPolicy2018.pdf

Gulati, A., Kapur, D., & Bouton, M. (2019). Reforming Indian agriculture (ICRIER Working Paper). Indian Council for Research on International Economic Relations.

Ministry of Finance. (2023). Economic survey 2022–23. Government of India. https://www.indiabudget.gov.in/economicsurvey/

Press Information Bureau. (2019). Agri export zones [Press release]. Ministry of Commerce and Industry, Government of India. https://pib.gov.in/newsite/PrintRelease.aspx?relid=186993

Press Information Bureau. (2024). APEDA catapults agricultural exports to USD 26.7 billion in FY 2022–23 [Press release]. Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2006731

Press Information Bureau. (2025). Target for export of agricultural commodities [Press release]. Government of India. https://www.pib.gov.in/PressReleasePage.aspx?PRID=2149703

Tantri, M. L. (2022). The missing thread in the making of agricultural export policy in India. Indian Journal of Agricultural Economics, 77(2), 277–293.

World Trade Organization. (2019). World trade statistical review 2019. WTO. https://data.wto.org/

About the Contributor

Tulsi Kumari is a Policy Research and Editorial Intern at IMPRI. She is currently pursuing a Master’s degree in Public Policy and Governance at TISS Hyderabad and holds a bachelor’s degree in Political Science. Her research interests include institutions, public economics,development economics, and gender studies.