Agriculture - exports are growing 2x the pace of others

Agricultural Exports from India have grown at almost twice the growth rate of Non-Agricultural commodities in the past decade. In the past decade (FY20-21 average vs. FY10-11 average), while India’s overall merchandise exports grew by 3.5% Cagr, Agricultural exports grew by almost 7% Cagr. Non-Agricultural exports have grown by just over 3% Cagr. Agricultural exports accounted for 14% of India’s merchandise exports in FY21.

(we use 2 year average to reduce volatility in the data especially since FY21 data is a bit distorted due to the ongoing Pandemic).

Most of this growth has come from India’s traditional commodities. Five commodities in particular – Sugar, Rice, Marine Products, Spices and Buffalo Meat – have contributed to over 80% of the incremental exports during this period. The share of these five commodities in Agricultural exports has increased from 44% a decade back to 63% in the last 2 years (FY20-21 average).

Agricultural Imports have also seen robust growth in the past decade, but Imports have grown slower than Exports. Whereas Agricultural Exports have grown at almost 7% Cagr, Imports have grown at 6% Cagr. Consequently, India continues to be a net exporter of agricultural commodities. India’s trade surplus in Agriculture has increased from US$10bn in FY11 to US$19bn in FY21. For reference, India had a merchandise trade deficit of US$100bn in FY21. Agricultural exports (and the consequent trade surplus) are thus an important offset to India’s otherwise unfavourable external trade balance.