Port Wings, 16 October 2019:
In the latest disclosure, the World Bank has projected that India’s growth rate may fall to 6 per cent. In 2018-19, the growth rate of the country stood at 6.9 per cent.
The report, which has been released ahead of the annual meeting of the World Bank with the International Monetary Fund, noted India’s economic growth decelerated for the second consecutive year.
With the situation getting out of control, India needs many concrete steps, including wider Chinese market access, to arrest falling growth.
Going by various media reports in the backdrop of Prime Minister Narendra Modi and Chinese President Xi Jinping’s “Informal Summit” held in Tamil Nadu, New Delhi is looking for greater access to the Chinese market as it seeks to arrest the fall in farm commodity exports.
After hitting a record of $43.2 billion in 2013-14, India’s exports of agricultural produce began declining gradually due to lack of innovation and competitiveness and the sustained increase in minimum support prices (MSP).
It may be noted that both the countries have discussed the issue of expanding bilateral trade at the informal meeting. The decline in exports, which began after FY14, has continued this fiscal.
According to data available, between April and August 2019 alone, products registered with the government owned Agricultural & Processed Food Products Export Development Authority reported a decline of 16 per cent in dollar terms and a staggering 22 per cent drop in cereal exports. APEDA oversees half of India’s overall farm exports. The total drop in exports does not seem that sharp due to sea food exports.
While China has already allowed its market access to many of India’s farm commodities including rice and sugar, the country is looking at including many other products, especially marine and other items. India’s Dhampur Sugar has signed a memorandum of understanding (MoU) with Chinese importers for shipment of 50,000 tonnes of sugar. Exports of certain products such as buffalo meat are routed through Vietnam, despite their having received formal approval for direct entry into China.
While China has already started importing limited quantities of rice from India, there is further potential of around $500 million worth of rice trade, according to experts. India’s marine exports have had impressive growth, though, surging to $485 million in the first half of the current financial year from around $141 million in 2017-18.
According to Ajay Sahai, Director General, Federation of Indian Export Organization, India is looking for about $1 billion worth of marine exports to China alone.
There is a huge demand for India’s agricultural produce in China, but market access has been an issue which China should resolve, he added.
With the summit ending on a positive note, India can expect a good reply from the Chinese officials in the coming weeks. If India gets an unrestricted market access, it will be win-win situation for both the Asian giants.