India’s agricultural exports may remain flat this financial year because export curbs on commodities such as wheat, non-basmati rice, and sugar may result in a decline in outbound shipments worth $4.5-5 billion.
“We expect we will (maintain) that level in spite of a $4.5-5 billion impact due to the restrictions,” Additional Secretary Rajesh Agrawal told reporters on Thursday.
India exported agricultural products worth $53 billion in the previous financial year.
The decline in exports of these items could be balanced by promoting shipments of new products such as bananas and value-added millet products to new countries.
“In the next three years, we are hoping to increase banana exports to $1 billion,” Agrawal said.
While there’s no impact at the moment, if the situation persists, the trade will have to take a longer route for exports, which may result in a 15-20 per cent jump in prices of basmati rice shipments.
“Yesterday (Wednesday) we had a meeting with basmati exporters on the Red Sea issue. Right now, there is no problem but if this continues exports may see some disruption. Basmati is a premium product from India, so there is demand and exports will continue. If we look at alternative (longer) routes, the cost will increase by 15-20 per cent,” the official said, adding that the demand may not get altered.
Last year, India exported basmati rice worth $4.7 billion. During April-October this year, there were shipments worth $3 billion.
Geopolitical conflicts have prompted an increasing number of shipping lines to avoid the Red Sea. The Iran-aligned Yemeni Houthi militant group said it launched a drone attack on a cargo vessel in the area on Monday, the latest in a series of such strikes that it says are a response to Israel’s assault on the Gaza Strip.
