Agriculture critical to India-UK FTA talks

• India has been one of the few countries whose primary exports during Covid phase experienced a proliferation which mainly includes cereals, animal and vegetable fats, sugar, fruits, vegetables, pharmaceuticals, processed oils and fats. This has been the litmus test for Indian exporters during the pandemic phase and they have very justified their robustness.
• Overall, India’s agriculture exports to UK in May 2020 was US$ 56.35 Million. World’s exports of agriculture to UK for the same month was US$ 5,187 million. If we compare monthly figures, India covers roughly 1.1% of agricultural needs of UK.
• If we see the growth rate of imports from India and UK, for agriculture products, India’s rate is significantly higher for all those products where India is experiencing positive exports growth
• The scope to improve and escalate our market presence in UK is immense. Even a 5% target will push our agricultural exports significantly.

India is going to initiate negotiation over an India-UK free trade agreement (FTA) this year, which is a separate trade agreement negotiation from the European Union (EU). After at least four years, a new FTA is getting initiated by India, and that too with a developed nation. With the benefit of hindsight, Indian policymakers should try to make this deal more lucrative in terms of realizing market share in UK, especially for Indian agriculture products. We have observed most of the times that agricultural goods are either ostracized from trade negotiations or they remain dormant while exercising trade agreements (Aksoy, 2004).

Statistically, it is noteworthy that UK is a net agriculture importer, as its net imports of said products amount to US$ 34 billion, as indicated in the graph below. Thus, it seems to be an excellent gateway for India to promote its agriculture products from scratch while negotiating the agreement.

Source: ITC Trade Map, 2020, figures for UK in US$ billion

Focus on agriculture Products

India has been one of the few countries whose primary exports post-COVID experienced a rise, which mainly includes cereals, animal and vegetable fats, sugar, fruits, vegetables, pharmaceuticals, processed oils and fats. This has been a litmus test for Indian exporters during the pandemic phase and they have justified their credentials.

Here, we will be analysing India’s agri exports to UK during the pandemic phase, i.e. from February 2020 till May 2020, which is the latest data available. This will be compared with UK’s overall monthly exports from the world. If the intensity to import by UK is higher from India than from the world overall, then Indian products have a huge potential to cover UK’s market if a trade agreement can be established.

Overall, India’s agriculture exports to UK in May 2020 stood at US$ 56.35 million. The world’s exports of agricultural products to UK for the same month were at US$ 5,187 million. If we compare the monthly figures, India covers roughly 1.1% of agricultural needs of UK. Hence, the scope to improve and escalate our market presence in UK is immense. Even a 5% target will push our agricultural exports significantly.

Table: India’s exports to UK as per product category under agriculture in US$ Million and growth rate in %. Highlighted rows show a positive growth during this four-month time period

Product Feb ’20  Mar ’20 Apr ’20 May ’20 Growth (%)
0 Food & live animals 49.02 69.13 58.35 53.57 0.97
00 Live animals 0 0 0 0
01 Meat & meat preparations 0 0 0 0
02 Dairy products & eggs 0 0 0 0
03 Fish & shellfish 12.93 12.95 8.46 4.69 -29.28
04 Cereals 9.98 14.9 16.56 16.68 17.89
05 Vegetables & fruit 14.13 26 21.02 21.25 10.65
06 Sugar 0.3 0.39 0.25 0.98 36.87
07 Coffee, tea, cocoa etc 7.89 9.42 7.5 6.67 -7.09
08 Animal feeding stuffs 1.09 2.73 3.05 1.67 14.88
09 Miscellaneous foods 2.7 2.74 1.51 1.64 -18.89
1 Beverages & tobacco 0.14 0.18 0.1 0.62 46.99
11 Beverages 0.14 0.18 0.1 0.62 47.4
12 Tobacco 0 0 0 0 0.97
4 Animal & vegetable oils & fats 1.32 1.34 1.11 1.96 10.55
41 Animal oils & fats 0 0 0 0.05
42 Vegetable oils & fats 1.24 1.22 1.04 1.74 9.02
43 Processed oils & fats 0.08 0.12 0.08 0.17 18.76

Source: Office for National Statistics, UK

It is evident that India’s agricultural exports growth to UK remained significantly positive for cereals, fruits and vegetables, sugar, animal feeding stuff, beverages and tobacco, processed oil fats. These could be some of the products, which could find the place under positive list while negotiating for India-UK trade agreement.

A similar comparison is made for world’s exports to see the intensity to import for UK from India vis-s-vis the world for agricultural products.

Table: World’s exports to UK as per product category under agriculture in US$ million and growth rate in %. Highlighted rows show a positive growth during this four-month time period

Product Feb ’20 Mar ’20 Apr ’20 May ’20 Growth in %
0 Food & live animals 3,976.7 4,637.1 4,288.7 4,193.8 0.8
00 Live animals 22.1 18.2 22.1 40.3 22.1
01 Meat & meat preparations 653.9 796.9 629.2 583.7 -5.6
02 Dairy products & eggs 300.3 362.7 313.3 351 3.3
03 Fish & shellfish 332.8 400.4 323.7 317.2 -3.5
04 Cereals 397.8 500.5 457.6 456.3 3.3
05 Vegetables & fruit 1209 1353.3 1388.4 1329.9 3.2
06 Sugar 120.9 98.8 118.3 87.1 -7.7
07 Coffee, tea, cocoa etc 396.5 425.1 390 367.9 -3.1
08 Animal feeding stuffs 228.8 276.9 230.1 280.8 4.4
09 Miscellaneous foods 314.6 404.3 416 379.6 6.1
1 Beverages & tobacco 730.6 861.9 820.3 841.1 3.8
11 Beverages 565.5 668.2 648.7 657.8 4.3
12 Tobacco 165.1 193.7 171.6 183.3 1.9
4 Animal & vegetable oils & fats 126.1 167.7 166.4 152.1 5.7
41 Animal oils & fats 7.8 7.8 13 10.4 14.7
42 Vegetable oils & fats 88.4 122.2 110.5 109.2 5.5
43 Processed oils & fats 29.9 37.7 42.9 32.5 3.9

Source: Office for national statistics, UK

If we see the growth rate of imports from India and UK, for agriculture products, India’s rate is significantly higher for all those products, where it is experiencing positive exports growth. So, going by India’s performance and potential in the domain of agriculture exports and that too during pandemic, it appears to be cogent that, by putting agriculture products in positive list, we can surely brand and escalate our products in UK directly.

 

Appendix: List of Agriculture Products where India is competitive and UK is also a significant importer of the products. After analysing UK’s imports, following products can be included in the positive list for negotiation:

List of Products:

Tariff Lines (at 8 digit) Product Description
3061792 Frozen shrimps of the genus “penaeus”, even smoked, whether in shell or not, incl. shrimps
10062098 Long grain husked [brown] rice, length-width ratio >= 3 (excl. parboiled)
9024000 Black fermented tea and partly fermented tea, whether or not flavoured, in immediate packings
8061010 Fresh table grapes
17031000 Cane molasses resulting from the extraction or refining of sugar
10063098 Wholly milled long grain rice, length-width ratio >= 3, whether or not polished or glazed
7099960 Fresh or chilled sweetcorn
15153090 Castor oil and fractions thereof, whether or not refined, but not chemically modified
3061799 Frozen shrimps and prawns, even smoked, whether in shell or not, incl. shrimps and prawns
8045000 Fresh or dried guavas, mangoes and mangosteens
20019010 Mango chutney, prepared or preserved by vinegar or acetic acid
9042200 Fruits of the genus capsicum or of the genus pimenta, crushed or ground
10062017 Long grain husked [brown] rice, length-width ratio >= 3, parboiled
20055900 Unshelled beans “vigna spp., phaseolus spp.”, prepared or preserved otherwise than by vinegar
23040000 Oilcake and other solid residues, whether or not ground or in the form of pellets
9103000 Turmeric “curcuma”
7132000 Dried, shelled chickpeas “garbanzos”, whether or not skinned or split
20089948 Guavas, mangoes, mangosteens, papaws “papayas”, tamarinds, cashew apples, lychees,
8013200 Fresh or dried cashew nuts, shelled
20059980 Vegetables, prepared or preserved otherwise than by vinegar or acetic acid, not frozen
9011100 Coffee (excl. roasted and decaffeinated)
21039090 Sauces and preparations therefor, mixed condiments and mixed seasonings (excl. soya sauce
23080090 Maize stalks, maize leaves, fruit peel and other vegetable materials, waste, residues and by-products
7122000 Dried onions, whole, cut, sliced, broken or in powder, but not further prepared
9093100 Cumin seeds, neither crushed nor ground
12074090 Sesamum seeds, whether or not broken (excl. for sowing)
19059080 Pizzas, quiches and other bakers wares containing by weight …
21069092 Food preparations, n.e.s., not containing milkfats, sucrose, isoglucose starch or glucose or
13023210 Mucilages and thickeners of locust beans or bean seeds, whether or not modified
9109105 Curry
12119086 Plants and parts of plants, incl. seeds and fruits, used primarily in perfumery, in pharmacy
15159099 Solid fixed vegetable fats and oils and their fractions, whether or not refined, but not chemically
20011000 Cucumbers and gherkins, prepared or preserved by vinegar or acetic acid
16052900 Shrimps and prawns, prepared or preserved, in airtight containers (excl. smoked)
21069098 Food preparations, n.e.s., containing, by weight, >= 1,5% milkfat, >= 5% sucrose or isoglucose,
10063067 Wholly milled long grain rice, length-width ratio >= 3, parboiled, whether or not polished
13023290 Mucilages and thickeners of guar seeds, whether or not modified
20089963 Guavas, mangoes, mangosteens, papaws “papayas”, tamarinds, cashew apples, lychees, jackfruit
21011100 Extracts, essences and concentrates, of coffee
24012085 Partly or wholly stemmed or stripped flue-cured tobacco, otherwise unmanufactured
9093200 Cumin seeds, crushed or ground
13023900 Mucilages and thickeners derived from vegetable products
14049000 Vegetable products n.e.s
10063048 Semi-milled long grain rice, length-width ratio >= 3 (excl. parboiled)
9041100 Pepper of the genus piper, neither crushed nor ground
13021970 Vegetable saps and extracts (excl. opium, liquorice, hops, vanilla oleoresin and genus ephedra)
11061000 Flour, meal and powder of peas, beans, lentils and the other dried leguminous vegetables
7133100 Dried, shelled beans of species “vigna mungo
8109075 Fresh fruit, edible (excl. nuts, bananas, dates, figs, pineapples, avocados, guavas, mangoes
9041200 Pepper of the genus piper, crushed or ground
6031100 Fresh cut roses and buds, of a kind suitable for bouquets or for ornamental purposes
9092200 Coriander seeds, crushed or ground
12130000 Cereal straw and husks, unprepared, whether or not chopped, ground, pressed or in the form
20049098 Vegetables and mixtures of vegetables, prepared or preserved otherwise than by vinegar or acetic
16052110 Shrimps and prawns, prepared or preserved, in immediate packings of a net content of <= 2 kg
9023000 Black fermented tea and partly fermented tea, whether or not flavoured, in immediate packings
12024200 Groundnuts, shelled, whether or not broken (excl. seed for sowing, roasted or otherwise cooked)
11010011 Durum wheat flour
3038990 Frozen fish, n.e.s.
9083100 Cardamoms, neither crushed nor ground
11010015 Flour of common wheat and spelt
7031019 Onions, fresh or chilled (excl. sets)
19019091 Food preparations of flour, groats, meal, starch or malt extract, containing no milkfats, sucrose
16042005 Preparations of surimi
3074338 Squid “loligo spp.”, frozen
9092100 Coriander seeds, neither crushed nor ground
19053191 Sweet sandwich biscuits, whether or not containing cocoa, containing < 8% milkfats
7096099 Fresh or chilled fruits of genus capsicum or pimenta
9101200 Ginger, crushed or ground
8134065 Dried tamarinds, cashew apples, lychees, jackfruit, sapodillo plums
9096100 Juniper berries and seeds of anise, badian, caraway or fennel, neither crushed nor ground
13019000 Lac; natural gums, resins, gum-resins, balsams and other natural oleoresins
9022000 Green tea in immediate packings of > 3 kg
20019097 Vegetables, fruit, nuts and other edible parts of plants, prepared or preserved by vinegar
3028990 Fresh or chilled fish, n.e.s.
20019020 Fruit of genus capsicum, prepared or preserved by vinegar or acetic acid
7149090 Jerusalem artichokes and similar roots and tubers with high inulin content, fresh, chilled
8023200 Fresh or dried walnuts, shelled
8011900 Fresh coconuts, whether or not shelled or peeled
20059950 Mixtures of vegetables, prepared or preserved otherwise than by vinegar or acetic acid, not
7139000 Dried, shelled leguminous vegetables, whether or not skinned or split
7099990 Fresh or chilled vegetables n.e.s.
16055400 Cuttlefish and squid, prepared or preserved
9062000 Crushed or ground cinnamon and cinnamon-tree flowers
7134000 Dried, shelled lentils, whether or not skinned or split
21039010 Mango chutney, liquid
20081110 Peanut butter
7129090 Dried vegetables and mixtures of vegetables, whole, cut, sliced, broken or in powder
8119085 Guavas, mangoes, mangosteens, papaws “papayas”, tamarinds, cashew apples, lychees, jackfruit
15155099 Sesame oil and its fractions, whether or not refined
3035990 Frozen Indian mackerels
7108095 Vegetables, whether or not cooked by boiling in water or by steaming, frozen
19012000 Mixes and doughs of flour, groats, meal, starch or malt extract, not containing cocoa
10063094 Wholly milled medium grain rice, whether or not polished or glazed (excl. parboiled)
9109910 Fenugreek seed
19023010 Dried, prepared pasta (excl. stuffed)
23091019 Dog or cat food, put up for retail sale, containing glucose, glucose syrup
9109991 Spices, neither crushed nor ground

 

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Bot gao lut
11 months ago

Wow, fantastic blog layout! How long have you been blogging
for? you made blogging look easy. The overall look of your website is magnificent, let alone the content!

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