COMPOSITION & ROLE OF WTO IN AGRICULTURAL EXPORTS

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M.COM First Year Tutor Marked Solved Assignment

Course Code: IBO – 03
Course Title: India's Foreign Trade
Assignment Code: IBO-03/TMA/2019-20
Coverage: All Blocks

IBO – 03 India's Foreign Trade Solved Assignment for 2019-20

Q3.) Discuss the composition of the agricultural exports of India. What is the role of WTO in agricultural exports?

Ans: There are a large number of agricultural products available for exports from India. Most of these products are food items. India enjoys a natural comparative advantage in agricultural exports because import needs of inputs are low, labor costs are less and there is an abundance of natural resources. At present India is exporting following agricultural products : (a.) Tea (b.) Coffee (c.) Tobacco (d.) Cashew Nuts (e.) Groundnut (f.) Spices (g.) Foodgrains

Composition Of Agricultural Exports:

The economic environment for agriculture trade is changing in a remarkable way due to changes in the domestic policies and international trade arrangements. Satisfying domestic demand and still tapping export channels is an integral element of Indias's export strategy for agricultural products.

Tea: Plantation crops have a crucial role in India's agricultural exports. Of these, tea plays a valuable role in the national economy. It not only earns considerable foreign exchange for the country from exports but also generates large revenue for the country's exchequer by way of cess, sales tax, agricultural income tax.

The government has set up the Tea Board to look after the development, research and promotion of Indian tea. It has five offices abroad in London, Germany, New York, Dubai, and Moscow. To generate high-quality seeds from Darjeeling, Assam, and Nilgiris popular worldwide, the Tea Board regularly carries out publicity campaigns in potential markets.

Coffee: Coffee is another important and long-established item of India's agricultural exports. India is Asia's third-largest exporter of coffee. The major markets include Italy, Germany, and Russia. There have been several significant changes in the marketing of coffee. The Central Government has allowed Free Sale Quota to all coffee growers irrespective of the size of their holdings. 

The Coffee Board looks after the promotion of sale and consumption of coffee as a beverage in the domestic as well as global markets, conducting coffee research, financial assistance to establish small coffee growers and managing the surplus pool of unsold coffee.

Rice: Rice is the most prominent item in India's foodgrain exports. India is the leading exporter of the Basmati Rice to the global markets. Basmati Rice is long grain aromatic rice grown in majorly in J&K, Himachal Pradesh, Punjab, Haryana, Uttrakhand, Western Uttar Pradesh, Delhi. The major destination of Basmati Rice export in the world are Saudi Arabia, UAE, Iran, USA, Oman. Rice is the freely exportable item with no quantitative or price restrictions.

Wheat: Wheat is the major staple food grain in India, accounting for 35.10 percent of the total food grain production in the country. India is the second-largest producer of wheat in the world after China. The major wheat growing states are Uttar Pradesh, Punjab, Haryana, Rajasthan, Bihar, and Madhya Pradesh.

Meat and Meat Products: Meat Is exported both in fresh and frozen forms. Sheep and goat meats are generally exported in fresh forms. Buffalo meat is mostly sold abroad as frozen. The market for the meat and allied products are Malaysia, UAE, Philippines, Saudi Arabia, Iran, etc.

Role of WTO in Agricultural Exports: 

Agricultural trade has been one of the most managed of the sectors the world over. It started with keeping agriculture out of the purview of GATT. Many countries were willing to accept a common set of rules for trade in manufacturing and at the same time, they were interested in keeping their autonomy concerning agricultural trade. Later in 1995, agricultural trade was included as one of the areas in the WTO but there was and still is a considerable hesitancy in accepting all set of rules for agriculture by a whole lot of countries whether developed or developing.

(a.)Non-tariff barriers to agricultural imports were tarrified and bound and are scheduled for phased reductions and export subsidies have been reduced.

(b.)WTO focuses on multi-trade liberalization and also agricultural trade liberalization, to have improved market access for least developed countries.