India’s tea, sugar exports raise sustainability concerns at home

Context: India is one of the world’s
largest agricultural product exporters. Indian agricultural export was valued
at $53.1 billion in 2022-23, up from $8.7 billion in 2004-05, a six-fold
increase in less than two decades. For an economically developing economy like
India, exports play a significant role in strengthening the economy by
increasing revenue, foreign exchange, and transactional options. But the rapid
surge in exports poses multiple challenges to sustainability of the production,
processing, and distribution systems of the respective commodities.

Export Data

·      
About: India’s
goods exports reached USD 41.68 billion in March 2024 compared to the FY
2022-23, despite a 0.67% decline from last year’s tally, Imports, on the other
hand, dropped by 6% to USD 57.3 billion during the same period. The goods trade
deficit contracted to USD 15.6 billion, the lowest in 11 months.

·      
Impact on Full-Year Figures
(2023-24): While goods exports averaged USD 35.4 billion in
the first ten months, the last two months’ spike lifted the full-year export
figure to USD 437.1 billion. This performance is 3.1% below the record USD
451.1 billion achieved in the previous year.

·      
FY 2023-24 Projections: Despite
persistent global challenges like the Ukraine war, and the West Asian crisis,
overall exports are estimated to surpass last year’s record.

Key points

·      
Overview: Agricultural
commodity production in India lives in a unique context — high domestic
consumption and now rapidly growing exports — that may benefit producers and
consumers; but increasing dependencies between different parts of the supply
chain compromise ecological sustainability

·      
Tea: India is the
world’s fourth-largest tea exporter and second-largest producer, contributing
10% of global exports. The latter totalled 188.76 million kg in 2022, with a
value of $641.34 million, and an increase of 21.47% year on year in volume and
12.43% year on year in value. The total value of Indian tea exports for 2022-23
was $793.78 million. Domestic consumption constitutes 80% of total production.
The top export destinations of Indian tea are the United Arab Emirates, Russia,
Iran, the U.S. and the U.K.

·      
Sugar: India
is the world’s second-largest sugar producer, with 34 million metric tonnes of
production, which is about a fifth of the global production. India’s sugar
exports grew by 291% from $1,177 million in FY 2013-14 to $4,600 million in FY
2021-22 and 64.90% in 2021-22. The country exported sugar to 121 countries,
according to the Directorate General of Commercial Intelligence and Statistics.
About 50 million farmers depend on sugar cane cultivation in India. An
additional half million depend on sugar and allied factories. According to NITI
Aayog, the industry has an annual turnover of ₹1 lakh crore.

·      
Way forward: There
needs to be more focus on addressing environmental issues and safeguarding the
health and safety of both workers and consumers to develop an inclusive
agrarian economy that benefits both local communities and global markets.