India’s large export of agricultural products has always been a powerful tool for India to create foreign exchange. However, this year, subject to the international situation, India’s agricultural products are facing considerable difficulties both in terms of domestic output and export. Do you continue to export agricultural products in large quantities to protect foreign exchange? Or give the policy preference to ordinary people with farmers as the main body to stabilize the people’s livelihood? It is worth weighing again and again by the Indian government.

India is a big agricultural country in Asia, and agriculture has always played a leading role in the national economy. In the past 40 years, India has been vigorously developing industries such as industry and information technology, but today, about 80% of the population in India still depends on agriculture, and the net agricultural output value accounts for more than 30% of the net domestic output value. It can be said that the growth rate of agriculture largely determines the growth rate of India’s national economy.

India has the largest arable land area in Asia, with 143 million hectares. From this data, India can be called a large agricultural production country. India is also a big exporter of agricultural products. The annual export volume of wheat alone is about 2 million tons. The export volume of other important agricultural products, such as beans, cumin, ginger, and pepper, also ranks first in the world.

The massive export of agricultural products has always been a powerful tool for India to create foreign exchange. However, this year, constrained by the international situation, India’s agricultural products are facing considerable difficulties both in terms of domestic output and export. The previous “sell sell sell” policy has also brought many problems in domestic economy, people’s livelihood and other aspects.

In 2022, Russia and Ukraine, as major grain exporters in the world, will be affected by the conflict, resulting in a sharp decrease in wheat exports, and the demand for Indian wheat exports as substitutes in the market will increase significantly. According to the prediction of Indian domestic institutions, India’s wheat export may reach 13 million tons in fiscal year 2022/2023 (April 2022 to March 2023). This situation seems to have brought great benefits to India’s agricultural export market, but it has also led to soaring domestic food prices. In May this year, the Indian government announced to slow down and even ban wheat exports to some extent on the grounds of “ensuring food security”. However, official data showed that India still exported 4.35 million tons of wheat in the first five months of this fiscal year (from April to August), up 116.7% year on year. The export volume of agricultural products increased sharply, and the prices of basic crops and processed products in India’s domestic market, such as wheat and wheat flour, rose sharply, leading to serious inflation.

The food structure of Indian people is mainly grain, and only a small part of their income will be consumed on such high priced foods as vegetables and fruits. Therefore, in the face of rising food prices, ordinary people’s living conditions are more difficult. To make matters worse, because of the rising cost of living, farmers have chosen to stock up on the rising prices of their crops. In November, officials of the Indian Cotton Association said publicly that the cotton crops of the new season had been harvested, but many farmers hoped that the prices of these crops would continue to rise as before, so they were unwilling to sell them. This mentality of covering sales undoubtedly further aggravates the inflation of Indian agricultural product market.

India has formed a policy dependence on a large number of agricultural exports, and has become a “double-edged sword” affecting the Indian economy. This issue is very obvious in the context of the complex and volatile international situation this year. If we investigate the reasons behind it, this dilemma has something to do with the realities of India for a long time. Specifically, India’s grain output is “large in total and small in per capita”. Although India has the largest arable land area in the world, it has a large population and a small per capita arable land area. In addition, India’s domestic agricultural modernization level is relatively backward, lacking advanced farmland irrigation facilities and disaster prevention facilities, relying heavily on manpower, and relying less on agricultural equipment, fertilizers and pesticides. As a result, the harvest of Indian agriculture will be greatly affected by the monsoon almost every year. According to statistics, India’s per capita grain output is only about 230 kg, far below the international average of 400 kg per capita. In this way, there is still a certain gap between India and the image of “big agricultural country” in people’s conventional perception.

Recently, India’s domestic inflation has slowed down, the banking system has gradually returned to normal, and the national economy has recovered. Do you continue to export agricultural products in large quantities to protect foreign exchange? Or give the policy preference to ordinary people with farmers as the main body to stabilize the people’s livelihood? It is worth weighing again and again by the Indian government.