An Explanatory Analysis of International Agricultural Trade of India Along with a Glimpse of COVID-19
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Date
2022
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Abstract
The research study entitled “An Explanatory Analysis of
International Agricultural Trade of India along with a Glimpse of
COVID-19” was aimed to study growth and instability in exports and
imports, India‟s comparative advantages among exporters of major
agricultural commodities, the bilateral trade flow of major agricultural
commodities from India to major other partners, export demand and
supply functions of selected major crops, factors affecting agricultural
trade of India and also explore the quick glimpse of covid-19.
The present study was based on the secondary data for the
period 2001-02 to 2019-20. The data were collected from various
sources like official website of APEDA, DGCI&S Kolkata, FAO and
world bank etc. These data were analyzed through various statistical
methods (i. e. exponential function, Cuddy-Della index, Balassa‟s index
of Revealed Comparative Advantage, gravity model of trade,
simultaneous equation model, Cob-Douglas production function and
glimpse of COVID-19 also assessed on the basis of secondary data)
for achieving the stated objectives.
The results of the study revealed that all the agricultural
commodities had significant growth in exports and imports at 1 per centlevel of significance during the study period 2001-02 to 2019-20.
Agricultural commodities like basmati rice, non-basmati rice, sugar,
cotton, tobacco, guar, sesame, groundnut, castor oil, spices, coffee,
vegetables, fruits, meat and edible meat offal, marine products and
dairy products were registered high growth in exports as compared to
pulses, oil meal, tea and cashew nut.
Among the all selected commodities, cotton registered highest
growth by 26.93 per cent in exports whereas, lowest growth observed
by cashew nut at the rate of 4.03 per cent per annum during the study
periods. In case of agricultural imports, vegetable oil was the largest
imported commodity which registered growth by 12.76 per cent per
annum. The highest growth in agricultural imports was reported by
sugar at the rate of 22.56 per cent while, cotton registered lowest
growth by 8.06 per cent during the periods. All the agricultural
commodities were found significant growth in import at 1 per cent level
of significance.
The analysis of instability index showed that high degree of
instability in agricultural exports registered by commodities like basmati
rice, non-basmati rice, pulses, sugar, cotton, guar groundnut, oil meal
and dairy products whereas, moderate degree of instability was found
in exports of tobacco, sesame, castor oil, coffee, cashew nut,
vegetables, meat and edible meat offal and marine products. The low
degree of instability in export was reported by spices, tea and fruits
during the study period 2001-02 to 2019-20.
The instability index in imports of agricultural commodities
revealed that fruits, pulses, alcoholic beverage, cotton, sugar and
miscellaneous edible preparations had high instability whereas,
vegetable oil, cashew nut and cocoa products indicated medium
instability in imports. Only spices were observed low instability in
imports during the periods.
The study of India‟s comparative advantages among exporters
of major agricultural commodities depicted that India was found to
enjoy comparative advantages in exports of commodities like rice,
pulses, sugar, guar, sesame, groundnut, castor oil, oil meal, spices,
tea, coffee, cashew nut and marine products while, tobacco,
vegetables, fruits and dairy products had registered as comparative
disadvantage during the study periods. In case of cotton and meat and
edible meat offal, export was found initially comparative disadvantage
but later it was improved in India.
The results of bilateral trade flows between India and other
major continent‟s exporter indicated that agricultural GDP and per
capita income was found positive and significant relationship with
bilateral trade among all countries. While distance was found negative
relationship with bilateral trade, Contiguous border did not have any
major influenced on trade between India and Asian countries. Regional
trading agreements substantially influence India‟s bilateral trade
whereas India had not found any trade agreements between European
countries during the study periods.
The analysis of exports demand functions revealed that India‟s
export price of tea, basmati rice, spices, sugar and cotton had
significant relationship with exports demand. The world exports price
was significantly affected export demand of tea, coffee, cashew nut,
Sugar, fresh fruit and fresh vegetables. In case of coffee, basmati rice,
spices, cashew nut, sugar and cotton, world real income had significant
relationship with exports demand. While lagged export demand was
found significant in case of export demand for basmati rice, tobacco
and spices.
The exports supply functions indicated that India‟s exports price
of coffee, basmati rice, tobacco, cashew nut and sugar had significant
relationship with exports supply, whereas, exports supply in case of
tea, spices, fresh fruits, fresh vegetables and cotton had insignificant
relationship. Supply shock had significant relationship with export
supply of spices, cashew nuts, sugar, fresh fruits and cotton, while
relationship with exports supply was found insignificantly in case of tea,
coffee, basmati rice, tobacco and fresh vegetables. Demand pressure
recorded as negative and significant relationship with exports supply of
tea, fresh fruits and fresh vegetables, whereas it was found positive
and significant relationship with export supply for basmati rice and
tobacco. Time variable was found positive and significant relationship
in case of tea and sugar while, it had negative and significant
relationship for cashew nuts. Further, lagged dependent variable
(supply of previous year) had significantly affected the exports supply
of basmati rice, spices and fresh vegetables.
The analysis of factors affecting in agricultural export depicted
that agricultural GDP and agricultural production index had positive and
significantly affected agricultural exports, while inflation rate was found
negative and significant relationship with agricultural export.
Agricultural imports, exchange rate and per capita income was found
insignificant during the study period 2001-02 to 2019-20.
The study on glimpse of covid-19 during pandemic periods
showed that the value of India‟s agricultural exports was increased i.e.,
` 3.05 lakh crore in 2020-21 against the ` 2.56 lakh crore in the year
previous year 2019-20. This indicated that India‟s agricultural exports
were surpassed the pandemic COVID-19 and agricultural sector was
more resilient against COVID-19 pandemic.