TPCI proposed five pronged strategy to thrust agri exports from country
TPCI proposed five pronged strategy to thrust agri exports from country
– 100 billion agri export target is achievable: TPCI
New Delhi, 3rd January, 2019:
1. 100% pre export certification
Before trading in a new market, most countries demand that your products conform to national and international standards. As a result, your products need to be designed and tested so that they can be sold in your target countries without hassles. Our import and export certification services enable you to reach new markets by ensuring that your products provide the required safety and regulatory compliance.
The objective behind pre export certification is as below;
• Ensure regulatory compliance for your products and meet the requirements of the countries you want to operate in
• Understand the concept of diverse certification and the various steps you need to take in order to comply
• Obtain the approvals, permits, import certificates, export certificates and licenses that you need for your products so that you can reach new markets
If this is ensured the quality of our product will also fetch premium value for F&B exports. The mandatory 100% pre- export certification such will create the brand as a reliable and good quality exporter. In short run, best way forward towards the target of $100 billion, as projected by Agri export policy and recently released FAO report.
Fixing accountability of the testing labs
The best way forward is fixing the accountability of testing labs and certifying agencies. This can be done by ascertaining financial plenty to the agency if a particular consignment is rejected.
TPCI also recommends National portal to register the labs that tests the pre- export shipments. The portal should have include the following;
• Audits of your product manufacturing processes
• Document checks and assessments of conformity with the requirements of applicable technical regulations and standards
• Physical inspections prior to shipment
• Sampling, testing and analysis in fully accredited laboratories
USA alone rejected 12365 consignments from India from 2014-2019, primarily of spices, basmati and marine products. Who is accountable for this?
India’s export consignment data rejected by USA (Source: US FDA) related to F&B products have experienced in past five years is as below.
|Number of rejections
Similarly, in EU under the border rejections of Indian food products there has been 3348 notifications which is essential to address and resolve between 2008-19. (Source: RASFF Portal EU).
Other than this, there are few products which is banned in particular market like milk and milk based products, eggplant, (Taro plat (Arbi), bitter gourd (Karela) in banned in EU region.
Also, scrutinization of India samples such as Okra, green chillies and pepper have increased. Now EU examines 20% of the total consignment which was initially 10% for analysing pesticides residues.
European Commission reduced maximum residues level for Tricyclazole to 0.01 parts per million (ppm) from 1 ppm for all crops in 2018.
After 2018, the export of basmati from India to EU declined by 38.35% and 9% in 2018-19 and 2019-20 respectively, primarily due to the pesticide residue issue.
India’s exports of Basmati rice to EU
|Quantity (‘000 MT)
|Value (USD Million)
As per industry inputs received, many exporters have talked about how the mandatory NMR (Nuclear Magnetic Resonance) certification can help fetch premium price for honey of approximately $2000 to $2400 per consignments, as against the current export price in the range of $1100 to $1600 per consignments. Also help weed out the exporters who are indulging in adulteration to gain short term profits which has far reaching effect on brand of India.
2. Increase the customer base to boost sales
India is not tuned to create different products which suits to the global demands, for which TPCI recommends to rope in/hire international consultants which can help India create project reports for producing the most consumed products globally. Eg French fries.
Frozen French Fries: As per UNcomtrade, India’s export of frozen French Fries/ processed potato in 2018 was only 3534 tonnes, while India exported 336,714 tonnes of raw potato to the world in the same time period. Frozen French fries is a globally demanded product. It is important that we divert the products towards processing rather than exporting raw product based on global demand.
This can be done by diversifying the export basket
Top 3 products i.e. Rice ($7.4 billion), marine products ($7.8 billion) and Meat products ($6.4 billion) alone constitute more than 60% of the total food and beverage export ($38 billion) from India in 2018.
The India’s share in the global market for 19 commodities is just 1.5% or USD 1.5 billion as against potential of 97 billion USD. Eg – while the global market for meat and chicken export is whopping USD 20.6 billion India’s share is only 4.4%. For butter and cow milk the global market is to the tune of 8 billion USD, India’s export is zero. The global market for banana is USD 15 billion whereas the India’s share is just USD 480 million.
India has been a net exporter of agriculture products with little change in the structure and composition of exports and imports. The input-output analysis based on WIOD data base shows that the domestic value addition of agri-commodities for final demand remains low and stagnant. Hence, need of the hour is to diversify the export basket primarily through global demand focussed value addition.
An initiative India should take is branding agri-products through steps such as geographical indication (GI), especially for organically-produced commodities that would realise higher returns in global markets. Establishing effective agricultural brands can help farmers gain a competitive advantage in ‘buyer-driven’ global markets. One of the best example to cite is Araku Coffee, which is able to fetch very high price (more than 100 times) because of market placement in European market. Similar efforts must be taken for other products.
Some globally recognised brands (California almonds, Chilean wines, Swiss chocolates) enjoy a high stature in their respective product groups. Branded items usually fetch better price and can lead to brand loyalty, and are seen as a move towards a strong customer base. Branding adds value by differentiating the product and also because of the consumer perception that such products are of superior quality than unbranded ones.
Other examples of global demand: Thrust on value addition should be aligned to global demand for example China produces more pasta than Italy or more sea weed rolls than Japan, this trend shows that the focus of the industry should be to produce for the global market, rather than the current trend of producing for Indian diaspora living in other countries to increase export.
4. Strengthening last mile connectivity for agri produce
Providing the last mile connectivity to the agri produce from the country is the need of the hour and crucial for the exports too. Our farm produce is either undervalued in global market or overvalued domestically as in case of most of the spices which fails to get a market for exports. Eg pepper, cardamom, cashew, etc.
There is strong disconnect from farm to retail or export. IndusFood is one of the World’s largest Indian food & beverage sourcing show which sets the platform for India’s products reach global consumer. The show has grown to 700 suppliers in the 3rd edition, having 100% growth yoy, with 1300 hosted buyers. The world comes to India during IndusFood- Global top sourcing giants of F&B industry such as- Walmart, LULU, Carrefour, Lotte Plaza Market, Nesto, Quality Natural Food Canada Inc to Mustafa and many more. Top buying houses, manufacturers of processed food as well as supermarket chains from across the globe are gearing up to source their F&B requirements from India through their participation as visitor buyers in IndusFood 2020.
IndusFood 2020, in the sidelines, will also witness 25 bilateral and multilateral meeting engaging 1000 participants. The business delegations from Denmark, China, Turkey, Korea, Afghanistan, etc. will also participate in IndusFood 2020.
The second edition of IndusFood saw on spot business deals worth USD 1.2 billion.
5. Revamp SEZ policy for food exports
There is one area within the SEZ policy that needs to be addressed. India has huge potential in the food exports and global investors are looking at SEZ as one destination for investing. Due to the lack of incentives for value added F&B manufacturing and exports is inhibiting them to come to India. A foreign investor should be allowed to import raw material at zero duty and avail duty rebate proportionate to value addition. Also, foreign investors should be incentivised by lower duty on value addition they achieve, especially for the food sector where duty is already high.
Also, it will lead to automatic cauterization as the incentive will act as a pull factor. This is one incentives which is if announced will also be WTO compliant.
It is to be noted that, exports from SEZs are growing at a faster rate than overall exports from the country. In April-June 2019, even as overall export growth from India slowed down to 2 per cent valued at Rs 5,62,000 crore, exports from SEZs posted a robust 15 per cent growth at Rs 1,85,763 crore.
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