Both agricultural exports from and imports into India have scaled new highs in the fiscal year in India that ended March 31, 2023.

Provisional data from the Department of Commerce of India shows total farm exports at $53.15 billion and imports at $35.69 billion during 2022-23, surpassing their previous year’s records of $50.24 billion and $32.42 billion respectively.

The resultant agricultural trade surplus has marginally dipped from $17.82 billion to $17.46 billion. The surplus narrows further if one adds the import of fertilizers, which have risen from $14.17 billion in 2021-22 to $17.21 billion in 2022-23.

The drivers – global prices

The chart shows the country’s farm trade over the last decade.

Between 2013-14 and 2015-16, exports sharply fell from $43.25 billion to $32.81 billion. The basic driver was global prices.

The UN Food and Agriculture Organization’s Food Price Index (FPI) crashed from an average of 119.1 points in 2013-14 to 90 points in 2015-16. However, imports continued to rise, bringing down the farm trade surplus from a peak of $27.72 billion in 2013-14 ($21.46 billion net of fertilizer imports) to a low of $8.05 billion by 2016-17.

The FPI – a weighted average of world prices of a basket of food commodities over a base period value (2014-16=100) – recovered to 102.5 points by 2020-21, and further to 133 points in 2021-22 and 139.5 points in 2022-23. And as that made India’s agri-commodities more globally price competitive, exports also soared to $41.90 billion, $50.24 billion and $53.15 billion during these three years.