Cabinet may clear proposal today to boost agri exports
In a major fillip to India?s processed food exports, the Cabinet is set to clear a policy under which processed foods from agricultural commodities such as wheat, rice, onion and milk would not be subject to any export ban or restrictions.
The Cabinet Committee on Economic Affairs (CCEA) is set to clear the proposal on Thursday to exempt 14 types of processed food from the purview of export restrictions including oats, milk products, dehydrated onions, wheat and rice products.
The move was first reported in FE in July.
Sources told FE because of frequent bans on the exports of grains and milk in last few years, India has been unable to tap the global market for improving its agricultural and processed food exports.
?This policy would now allow exporters to enter into a long-term contact with importing parties,? a senior official said.
India had banned exports of onions, wheat, non-basmati rice and milk in the last few years to boost domestic stocks. Since there is no policy distinction between raw and processed items, this has hit exports of dehydrated onions, casein milk protein extracts and rice and flour-based products.
Now, even if export of a farm commodity is banned, the specified processed foods from them would continue to be exported.
?Many foreign buyers were reluctant to enter into deals with Indian exporters due to the government?s power to suspend exports of a particular commodity at short notice,? a dehydrated onion exporter said. India imposed a ban on onion export in December 2010 when the domestic prices rose sharply leading to stoppage of shipment of dried onion. The ban hit the R500-crore domestic onion dehydration industry, which has a 50% global share.
Similarly, the government had banned exports of casein and milk powder in February 2011. The agriculture minister Sharad Pawar then wrote to Prime Minister Manmohan Singh that the Centre?s policy on milk and milk products has been ?ambivalent? and demanded opening of exports of skimmed milk powder and casein, which the government announced last month.
India exported dairy products worth R608 crore last fiscal.
India removed exports restrictions on non-Basmati rice last fiscal leading to the country emerging as biggest rice exporter in the world.
Last year, the government lifted a four-year ban on wheat exports leading to more than 2.5 million tonnes of wheat exports from the government’s stocks till now.
The country?s ?agriculture and processed foods? exports (including basmati rice, fresh fruit, and dairy and meat products, among others) is expected to cross R1 lakh crore in the current fiscal against R82,480 crore in 2011-12.
However, India’s share in global market is still small compared to its production of agricultural items.
Fifteen countries including Saudi Arabia, UAE, UK, Bangladesh and South Africa account for more than 63% of India?s exports of fruits, vegetables and other agri-products.
