New Delhi: India has failed to capitalise on its vast agricultural strength to expand exports fully, the latest Economic Survey has pointed out, flagging a widening gap between the country’s position as the world’s second-largest agricultural producer and its modest presence in global agricultural trade, with a 2.2 per cent share in 2024.
The Economic Survey 2025-26—prepared by Chief Economic Adviser V. Anantha Nageswaran and presented in Parliament Thursday by Finance Minister Nirmala Sitharaman—has highlighted supply-side constraints, including inadequate processing facilities, infrastructure bottlenecks, and regulatory hurdles, which continue to weigh on India’s export growth.
The survey has noted that India could reach $100 billion in combined exports of agriculture, marine products, and food and beverages over the next four years, but has warned that ad hoc export bans and minimum export price restrictions disrupt supply chains, create uncertainty for foreign buyers and risk permanently ceding markets to competing exporters.
“Frequent policy changes can significantly disrupt export supply chains, create market uncertainty and cause foreign buyers to switch to other sources. Export markets once lost are not easily recovered,” the survey has stated.
It has further added, “Although these measures may temporarily stabilise domestic prices, they risk longer-term reputational costs, particularly as India is widely regarded as a source of high-quality agricultural products.”
India’s overall merchandise exports grew at a compounded annual growth rate (CAGR) of 6.9 percent between FY 2020 and FY 2025. Agricultural exports rose from $34.5 billion to $51.1 billion during the same period, clocking a higher CAGR of 8.2 per cent, the report has said.
However—despite this growth—agriculture’s share in India’s total merchandise exports has remained largely stagnant, fluctuating between 11 and 14 percent over the same time period.
More worryingly, India’s agricultural exports have plateaued since FY 2023, even as global agricultural exports expanded from $2.3 trillion in calendar year 2022 to $2.4 trillion in 2024.
As a fast-growing economy, India’s import demand is expected to rise over time, in line with global historical experience, the survey has pointed out. To sustainably finance these imports, the country will need to aggressively expand its agricultural export earnings.
Agricultural exports offer one of the most readily available opportunities to do so, with significant untapped potential and strategic value in global markets. Policy alignment, the survey has stressed, will be crucial to tap this advantage.
More overall export competitiveness
As global trade, investment and capital flows become increasingly sensitive to policy signals and geopolitical alignments, emerging economies such as India face stiff competition for capital and a more volatile external environment than during the era of hyper-globalisation, the survey has pointed out.
“For emerging market economies, this shift entails greater competition for capital, slower expansion of global trade volumes and heightened sensitivity of external flows to policy and geopolitical developments,” the survey has stated.
While India’s external sector is in a position of relative strength—backed by robust services exports, record non-petroleum merchandise exports, healthy foreign exchange reserves and moderate external debt—the survey has cautioned that regular inflow of foreign direct investment (FDI) will be critical to maintaining balance-of-payments stability, boosting productivity, and supporting export growth.
To attract and retain FDI in an increasingly competitive global capital market, the survey has called for sustained improvements in the investment climate, deeper integration into global value chains, and better policy coordination between the centre and states.
The survey has also sought “an export-oriented policy, a pressing necessity”, noting that currency stability and long-term external resilience are ultimately anchored in export competitiveness.
“History demonstrates that countries with sustained manufacturing export success are those that have maintained hard currency status, characterised by currency stability and strength,” the survey has said.
To boost India’s manufacturing competitiveness, the survey has called for a unified effort to reduce manufacturing costs by correcting inverted duties, improving logistics infrastructure, lowering logistics costs, and reducing regulatory expenses.
(Edited by Madhurita Goswami)
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Why should the world import agricultural products from socialist India while it doesn’t import the same? Socialist India wants the cake and eat it, too.