India

Agriculture is the second-largest contributor to GDP and a major source of employment and export earnings. India is self-sufficient in grain production and is a leading producer of rice, wheat, coarse grains, pulses, cotton and milk. India is also a major producer of tea, spices, cashew nuts, mangoes and bananas. The processed food industry is less developed than compared to other countries in the region, resulting in only a small portion of India's agricultural output being processed. Deregulation of the food processing sector should contribute to the modernization and production capacity of the sector.

India's agriculture trade policy has been primarily driven by the objective of attaining self-sufficiency in order to eradicate hunger and provide essential food at reasonable prices. The Indian government provides support in input subsidies and output prices, procures food grains at support prices and maintains public stocks for disbursement among low-income groups at subsidized prices through a national network, the Public Distribution System. The domestic market is still insulated from world competition by restrictive trade policies, high tariffs and non-tariff barriers, and government controls and regulations over agricultural trade.

India's tariffs on agricultural products remain high by global standards, in particular when surcharges and additional duties make the aggregate tariff prohibitive. Tariff quotas are maintained on some edible oils, maize and milk powder. Import prohibitions are in place for certain fats, oils of animal origin, and beef, based on GATT Article XX that permits countries to restrict imports on religious grounds. Some products, such as wheat, rye, oats, maize, rice, canary seed and other cereals, continue to be traded by the Food Corporation of India.

The National Policy on Agriculture announced in July 2000 calls for annual growth of over four percent in agriculture by 2005, along with further institutional and structural reforms necessary to improve the productivity of agriculture and the conservation of resources, and to increase returns to farmers and maximize benefits from exports.

In the WTO agriculture negotiations, India is seeking very ambitious reform for developed countries, with significant changes to eliminate trade-distorting support and protection. At the same time, India is seeking a very generous degree of flexibility for developing countries, to increase trade-distorting support and to increase tariff bindings, in order to meet development objectives.

Canada's total agri-food exports to India in 2002 were $129 million and total agri-food imports were $103 million. The top five exports to India in 2002 in descending order of importance were peas, chickpeas, lentils, canola and mustard seed. The top imports from India were rice, cashew nuts, pepper, sesame seeds, mucilages and thickeners.

India is a member of the World Trade Organization, Indo-Sri-Lankan Free Trade Agreement, South Asian Free Trade Area and South Asian Association of Regional Cooperation.

Relevant Sources and Links:

• Agri-Food Trade Service - Market Information, India
• Opening Doors to the World: Canada's International Market Access Priorities 2004 (DFAIT) - India
• InfoExport - India
• ExportSource
• World Trade Organization's Trade Policy Review - India (2002)
• United States Trade Representative's 2004 National Trade Estimate Report on Foreign Trade Barriers - India
• The World Fact Book 2003 - India
• Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India
• Canadian Embassy in New Delhi, India
• High Commission of India in Ottawa, Canada

For more information, please contact:

Chantal Bernier
Telephone: (613) 759-7689
Fax: (613) 759-7503
E-mail: bernierch@agr.gc.ca