Agricultural Policy Monitoring and Evaluation 2024

13. India

Main findings

Support to agriculture

Net support to producers in India has been negative throughout the last two decades but fluctuates markedly. Domestic producers have been implicitly taxed on average, as budgetary payments to farmers did not offset the price-depressing effect of complex domestic marketing regulations and trade policy measures. Virtually all gross producer transfers (whether positive or negative) come in potentially most production – and trade-distorting forms – a consistent pattern since the early 2000s.

Support to producers in 2021-23 includes budgetary transfers corresponding to 8.8% of gross farm receipts, positive Market Price Support (MPS) of +1.9% of gross farm receipts for commodities that are supported and negative MPS of as much as -26.1% for those that are taxed. Overall, this led to negative net support of -15.4% of gross farm receipts in 2021-23, against a backdrop of increasing prices at the border for many of the exported commodities covered, particularly rice, wheat, maize, and milk. Export restrictions apply since 2022-23 to various types of rice, wheat, sugar, onions, and related products (e.g. wheat flour). Commodities with positive Single Commodity Transfers (SCT) – ranging between 3.9% and 27.4% of commodity receipts in 2021-23 – include sugar, chickpeas, other pulses, and poultry meat.

Budgetary transfers to producers are dominated by subsidies for variable input use, mainly fertilisers, electricity, and irrigation water. However, budgetary allocations to the direct income transfer programme, PM-KISAN, have been increasing since its implementation in 2018 and represent 10.6% of budgetary spending in 2021-23.

Public expenditures financing general services to the sector (General Service Support Estimate, GSSE), mainly related to investments in off-farm irrigation systems, are around half the level of subsidies for variable input use. Expenditures for GSSE increased to 4% of the value of agricultural production in 2021‑23, from 3.2% in 2000-02.

Policies that affect farm prices provide implicit support to consumers. Food subsidies provided through the Targeted Public Distribution System, whose allocations increased substantially during the COVID-19 pandemic, also reduce costs for consumers. The consumer support estimate is 38.7% of expenditure on average across all commodities in 2021-23.

Key recent policy changes

India introduced various export restrictions on rice throughout 2023. In July 2023, it banned the export of non-basmati white rice (allowing exports requested by foreign governments for food security needs). In August 2023, India imposed a 20% export duty on parboiled non-basmati rice and introduced minimum export prices for basmati rice exports. In addition, India banned the export of onions at the end of 2023 before reintroducing in 2024 a 40% export tax and a minimum export price.

Fertiliser subsidies were reduced in financial year 2023/24 from INR 2.55 trillion (USD 31 billion) to INR 1.9 trillion (USD 23 billion). The 25.5% reduction was triggered by lower fertiliser prices during the 2023/24 marketing year. The allocation foreseen for financial year 2024/25 is also lower, at INR 1.64 trillion (USD 20 billion).

As regards support to consumers, end November 2023, India extended for five years the Pradhan Mantri Garib Kalyan Anna Yojana programme providing free food grains to the poorest segments of the population. The programme starting on 1 January 2024 would cover more than 800 million beneficiaries and is expected to cost INR 11.8 trillion (USD 142 billion).

As regards support to producers, in June 2023, India increased the minimum support price (MSP) for several summer planted crops, including rice, maize, groundnuts, soybeans, pigeon peas, black gram, and cotton. In October 2023, India also increased the MSPs for winter planted crops, including wheat, barley, gram, lentils, and rapeseed. In June 2023, India increased the Fair and Remunerative Price for sugarcane by 3.3%.

Assessment and recommendations

• India’s agriculture faces productivity and sustainability challenges. The low productivity of farmers, and particularly the prevalence of marginal and small-scale farmers with limited access to finance and technology, represent a substantial challenge. This is exacerbated by fragmented and complex supply chains involving numerous intermediaries, restrictive domestic marketing policies and border measures that have been on average reducing prices below those on international markets over most of the period reviewed. At the same time, the sustained growth in agricultural output and fertiliser use have put mounting pressures on natural resources, particularly land and water.

• Investments in agricultural research continue to be a major driver of sustainable productivity growth, including through new crop varieties and management practices. These are a good response to increased environmental pressures and rising threats from climate change. However, measurable targets for agriculture sustainable productivity growth are missing.

• Agricultural support could be better aligned with climate change mitigation and adaptation efforts. Scaling back variable input subsidies (fertiliser, irrigation water and electricity) can lower greenhouse gas (GHG) emissions and increase flexibility to adjust production systems in response to a changing climate. Resulting savings could be reoriented to train farmers in more efficient and sustainable input use and ensure extension systems can reinforce digital skills and resilience.

• New investments in irrigation should be better co-ordinated with water management objectives to help reduce water consumption in dry or groundwater depleting regions. Overall, long-term transitional efforts could focus on enhanced collaborative planning and multi-disciplinary research that accounts for India’s regional diversity.

• Increased investments in the agricultural knowledge system and knowledge transfer through Farmer Producer Organisations could drive sustainable productivity growth. Promoting new technologies and production practices is important for improved and sustainable agricultural productivity.

• Enhancing the electronic National Agricultural Market (e-NAM) set up in 2016 should remain a priority to foster efficient markets and competitive agro-food supply chains across states. In addition, the 2017 model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act should be implemented in a more harmonised and consistent way across states and synchronised with reforms to the MSP system through coherent plans. Complementing these programmes with investments in transport infrastructure, marketing, training, and other general services to agriculture will help farmers reap the benefits in productivity and income. Budgetary allocations for rural infrastructure and digitalisation in agriculture in recent Union Budgets are positive steps in this direction.

• The large share of employment in agriculture compared to its GDP contribution reflects the persistent labour-productivity gap relative to other sectors and translates into low farm incomes. In the short-to-medium term, direct cash transfers (such as through PM-KISAN) can support the poorest farmers’ livelihoods and adjustment to new market conditions. In the longer term, policies focused on education and financial services are needed to facilitate significant structural adjustments, including the transition of farm labour to other activities and consolidation towards farm operations sufficiently large to exploit economies of scale.

• India is an important agro-food exporter. The Agricultural Export Policy (AEP) framework adopted in 2018 helped reduce uncertainty and transaction costs throughout supply chains by easing export restrictions on organic and processed agricultural products. However, recent export restrictions on products such as rice, wheat, sugar, onions, and related products directly affect India’s reliability as a supplier and exacerbate the persistent challenge of low farm incomes. An extension of the AEP to all agri-food products should be considered to create a stable and predictable market.

• Recent reductions in tariffs and relaxation of quantitative restrictions on selected pulses, albeit temporary, are additional positive steps towards improving food security and diversifying diets. Together with domestic marketing reforms, easing export and import restrictions would make the market more predictable and increase incentives for producers and traders to invest in supply chains. More generally, agricultural policy could be better anchored in a broad and long-term policy framework, moving towards more neutral, stable, predictable, and targeted policies.

• India made significant progress eliminating inefficiencies in the food-distribution system in the period before the COVID-19 pandemic, and these efforts could continue. The experimental replacement of physical grain distribution with direct cash transfers could be gradually expanded, including by drawing on recommendations made by the High-Level Commission on Restructuring the Food Corporation of India, which suggested focusing initially on cities with populations over 1 million, followed by grain surplus states.

Development of support to agriculture

Figure 13.1. India: Development of support to agriculture

Table 13.1. India: Estimates of support to agriculture

Million USD

	2000-02	2021-23	2021	2022	2023p
Total value of production (at farm gate)	112 282	447 264	457 177	438 678	445 937
of which: share of MPS commodities (%)	64.75	77.51	75.59	77.82	79.13
Total value of consumption (at farm gate)	109 060	406 087	405 207	398 376	414 679
Producer Support Estimate (PSE)	-2 709	-77 802	-80 792	-94 923	-57 691
Support based on commodity output	-11 243	-133 080	-133 431	-155 010	-110 798
Market price support¹	-11 243	-133 181	-133 731	-155 012	-110 798
Positive market price support	3 583	10 607	9 274	12 354	10 193
Negative market price support	-14 827	-143 788	-143 005	-167 366	-120 992
Payments based on output	0	101	301	2	0
Payments based on input use	8 519	47 069	43 304	52 333	45 571
Based on variable input use	8 519	46 365	42 828	51 808	44 458
with input constraints	0	0	0	0	0
Based on fixed capital formation	0	615	386	451	1 008
with input constraints	0	0	0	0	0
Based on on-farm services	0	90	89	75	105
with input constraints	0	0	0	0	0
Payments based on current A/An/R/I, production required	0	0	0	0	0
Based on Receipts / Income	0	0	0	0	0
Based on Area planted / Animal numbers	0	0	0	0	0
with input constraints	0	0	0	0	0
Payments based on non-current A/An/R/I, production required	0	0	0	0	0
Payments based on non-current A/An/R/I, production not required	0	7 832	8 975	7 255	7 266
With variable payment rates	0	0	0	0	0
with commodity exceptions	0	0	0	0	0
With fixed payment rates	0	7 832	8 975	7 255	7 266
with commodity exceptions	0	0	0	0	0
Payments based on non-commodity criteria	0	0	0	0	0
Based on long-term resource retirement	0	0	0	0	0
Based on a specific non-commodity output	0	0	0	0	0
Based on other non-commodity criteria	0	0	0	0	0
Miscellaneous payments	15	377	361	499	271
Percentage PSE (%)	-2.31	-15.43	-15.84	-19.03	-11.56
Producer NPC (coeff.)	0.91	0.77	0.77	0.74	0.80
Producer NAC (coeff.)	0.98	0.87	0.86	0.84	0.90
General Services Support Estimate (GSSE)	3 526	18 050	17 662	17 546	18 942
Agricultural knowledge and innovation system	402	1 321	1 274	1 269	1 420
Inspection and control	25	516	334	500	715
Development and maintenance of infrastructure	2 021	15 195	15 085	14 721	15 779
Marketing and promotion	14	103	12	147	151
Cost of public stockholding	1 044	901	953	892	858
Miscellaneous	21	13	4	17	19
Percentage GSSE (% of TSE)	..	..	..	..	..
Consumer Support Estimate (CSE)	14 692	145 378	144 769	170 690	120 675
Transfers to producers from consumers	10 856	115 916	116 743	136 252	94 753
Other transfers from consumers	-224	384	-80	1 157	76
Transfers to consumers from taxpayers	4 222	30 712	29 855	35 248	27 032
Excess feed cost	-163	-1 634	-1 749	-1 968	-1 186
Percentage CSE (%)	14.12	38.65	38.57	47.01	31.13
Consumer NPC (coeff.)	0.91	0.78	0.78	0.74	0.81
Consumer NAC (coeff.)	0.88	0.72	0.72	0.68	0.76
Total Support Estimate (TSE)	5 040	-29 040	-33 274	-42 129	-11 717
Transfers from consumers	-10 632	-116 300	-116 663	-137 409	-94 829
Transfers from taxpayers	15 896	86 876	83 469	94 123	83 035
Budget revenues	-224	384	-80	1 157	76
Percentage TSE (% of GDP)	1.02	0.85	-1.06	-1.24	0.33
Total Budgetary Support Estimate (TBSE)	16 283	104 141	100 457	112 883	99 081
Percentage TBSE (% of GDP)	3.33	3.09	3.19	3.33	2.79
GDP deflator (2000-02 = 100)	100	327	308	333	339
Exchange rate (national currency per USD)	47.25	79.21	74.50	80.36	82.77

.. Not available

Note: p: provisional. NPC: Nominal Protection Coefficient. NAC: Nominal Assistance Coefficient. A/An/R/I: Area planted/Animal numbers/Receipts/Income. 1. Market Price Support (MPS) is net of producer levies and excess feed cost. MPS commodities for India are: wheat, maize, rice, soybean, rapeseed, groundnuts, chick pea, other pulses, potatoes, onion, tomatoes, mango, bananas, sugar, cotton, milk, bovine meat, sheep meat, poultry and eggs.

Source: OECD (2024), “Producer and Consumer Support Estimates”, OECD Agricultural policy monitoring (database), https://data-explorer.oecd.org/.

Policy landscape

Main policy instruments

Agriculture and food is governed via six major policy channels: 1) managed prices and marketing channels for many farm products; 2) subsidised farm inputs; 3)  general services for the agricultural sector as a whole; 4) public stockholding through purchasing, storing and making certain food staples available to selected groups of the population at subsidised prices; 5) regulated border transactions through trade policy; and more recently, 6) the income support scheme PM-KISAN (OECD/ICRIER, 2018[1]; ICRIER, 2022[2]; Gulati, Kapur and Bouton, 2020[3]).

States have constitutional responsibility for many aspects of agriculture, but the central government sets national approaches to policy and provides the necessary funds to implement programmes at the state level. The central government (Union Cabinet) is responsible for some key policy areas, notably international trade policies, and for the implementation of the National Food Security Act (NFSA) of 2013.

Policies affecting domestic prices and marketing channels

Policies governing the marketing of agricultural commodities in India – for both producers and the food chain – include the national-level Essential Commodities Act (ECA), which controls the production, supply, distribution, and pricing of essential commodities, and the state-level Agricultural Produce Market Committees (APMC) Acts, which regulate the pricing, procurement, stocking, and trading of commodities. The first point of sale of agricultural products occurs at regulated market yards (mandis) under the responsibility of Agricultural Produce Market Committees (APMC). The APMC Acts establish the framework for government procurement under the minimum support price (MSP) system. Differences exist among states in the status of their respective APMC Acts and in how these acts are implemented.1

Based on the recommendations of the Commission for Agricultural Costs and Prices (CACP), the central government establishes a set of MSPs for 23 commodities each year. The CACP bases its recommendations on the average cost of production considering both the actual covered cost of production and the imputed value of family labour. State governments may also provide a bonus payable over and above the MSP for some crops. National and state-level agencies operating on behalf of the Food Corporation of India (FCI) can buy wheat, rice, and coarse grains. Several other agencies can buy pulses, oilseeds, and cotton at MSPs – including through the umbrella scheme Pradhan Mantri Annadata Aay Sanrakshan Yojna (PM-AASHA), introduced in 2018, which is designed to ensure remunerative prices to farmers for their produce. Some horticulture commodities without MSP are also procured. However, procurement under the price support scheme effectively operates mainly for wheat, rice, and cotton, and only in a few states. The MSP scheme only applies when approved agencies purchase commodities, it is not a guaranteed price to the farmer if they sell to intermediaries, private traders, consumers, or non-approved agencies.

The electronic National Agricultural Market (e-NAM) set up in 2016 and a model Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act were both recommended by the central government for adoption by state governments.2 E-NAM is an online trading platform for agricultural commodities in India, which aims to create a network of APMC mandis. It currently integrates more than 1 000 APMC markets in 18 states and 3 Union Territories (UTs); almost 17 million farmers and 150 000 traders are registered on the e-NAM platform.

Input subsidies and other budgetary transfers

Input support policies enable agricultural producers to obtain farm inputs at subsidised prices. Policies governing the supply of fertilisers, electricity and water are the largest of these. Other supported inputs are seeds, machinery, credit, and crop insurance. State-level loan debt waivers, compensating lending institutions for forgiving debt to farmers, have grown in importance. Aiming to improve formal credit penetration in the agricultural sector, the Reserve Bank of India (RBI) has mandated banks to allocate 40% of their adjusted net bank credit to Priority Sector Lending, of which 18% is reserved for agricultural credit. However, only 41% of small and marginal farmers are able to access bank credit and about 30% of agricultural loans continue to come from non-institutional sources (e.g. moneylenders), as opposed to financial institutions such as commercial banks.

The government of India (GoI) has also been covering part of the premium for crop insurance since 2000, through mechanisms including the National Agricultural Insurance Scheme, the Modified National Agricultural Insurance Scheme, the Weather Based Crop Insurance Scheme, the Coconut Palm Insurance Scheme, the National Crop Insurance Program, the Restructured Weather Based Crop Insurance Scheme, and most recently, the Pradhan Mantri Fasal Bima Yojna (PMFBY) scheme. PMFBY, introduced in 2016, provides insurance to farmers for crop losses due to monsoon fluctuations or other extreme weather events.

The PM-KISAN scheme provides an annual direct income transfer of INR 6 000 (USD 84) per farmer to all farmers with land titles. The payment does not require farmers to produce, is irrespective of the farm size, and may be used for any need.

General services policies focus on programmes for the development and maintenance of infrastructure (85% of general services support in 2021-23), particularly related to irrigation. Budgetary support is also significant for agricultural knowledge and innovation (7%) and for public stockholding (5%).

Support to consumers

Public distribution of food grains is the joint responsibility of the central and state governments. The Targeted Public Distribution System (TPDS) operates under the National Food Security Act (NFSA) in all states and UTs. Other Welfare Schemes (OWS) also operate under the NFSA. The central government allocates food grains to state governments and the FCI transports food grains from surplus states to deficit states. State governments distribute the food grain entitlements by allocating supplies within the state, identifying eligible families, issuing ration cards, and distributing food grains mainly through Fair Price Shops.

Trade policy

India’s Foreign Trade Policy is formulated and implemented by the Directorate General of Foreign Trade (DGFT) and announced every five years. It is reviewed and adjusted annually in consultation with relevant public agencies. The Basic Customs Duty (BCD), also known as the statutory rate, is agreed at the same time as the approval of the annual budget. In contrast to previous five-year Foreign Trade Policy frameworks, the latest Foreign Trade Policy 2023 – effective as of 1 April 2023 – does not include an end date.

Agricultural exports have been managed for several decades through a combination of export restrictions, including export prohibitions, licensing requirements, quotas, taxes, minimum export prices,3 and state trading requirements. How these restrictions are enforced, extended or terminated may change several times per year, according to domestic supplies and prices. The 2018 Agriculture Export Policy framework tries to address some of these issues through three main areas of action:

• Recommending that processed agricultural products and organic products are not subject to export restrictions.

• Undertaking consultations among stakeholders and ministries to identify those essential food security commodities to which export restrictions may be applied under specific market conditions.

• Reducing import barriers applied to agricultural products for processing and re-export.

Innovation for sustainable productivity growth

In India, the comparatively low productivity of farmers, and particularly the prevalence of marginal and small-scale farmers with limited access to finance and technology, represents a substantial challenge. Over half of India’s arable land relies on rainfall, directly influencing farmers’ productivity and incomes. Farmers lack the resources necessary to bolster productivity or effectively combat adverse weather conditions, pests, and diseases. Insufficient storage, improper handling, and deficient transportation infrastructure add to these challenges, resulting in post-harvest losses. This is exacerbated by a fragmented and intricate supply chain involving numerous intermediaries.

The sustained growth in agricultural output and fertiliser use have put mounting pressures on natural resources, particularly land and water. This is reflected in the nutrient surplus intensities at the national level, which have grown over time and are much higher than the average for OECD countries. The share of agriculture in total GHG emissions is also higher than the OECD average, partly due to the weight of the agricultural sector in the Indian economy. Methane emissions due to enteric fermentation by livestock (54.6%), anaerobic conditions during rice cultivation (17.5%) and nitrous oxide emissions from application of nitrogenous fertilisers in agricultural soils (19%) account for 91% of GHG emissions from agriculture. Emissions from the burning of crop residues are particularly significant in northern India, although only 2.1% of total agricultural emissions.

The GoI’s policies and initiatives in sustainable agriculture are designed to enhance farmers’ income, ensure food security, and promote environmentally friendly farming practices. These efforts aim to achieve long-term agricultural sustainability while improving the livelihoods of farmers across the country.

Strategic planning

The National Mission for Sustainable Agriculture (NMSA), which became operational in 2014-15, aims to improve agricultural productivity while ensuring the long-term sustainability of natural resources by promoting environmentally friendly agricultural practices and site-specific approaches. NMSA emphasises sustainable development pathways through a gradual transition to green technology, energy efficient equipment, conservation of natural resources, and integrated agriculture. It also promotes soil health management, water efficiency, an efficient use of chemicals, crop diversification, and agroforestry.

India ratified the Paris Agreement on Climate Change on 2 October 2016. India updated its Nationally Determined Contribution (NDC) in August 2022. The 2022 NDC comprises eight goals, three of which are quantitative targets to be achieved up to 2030: 1) to reduce emissions intensity relative to GDP by 45% from the 2005 level; 2) to achieve about 50% cumulative electric power installed capacity from non-fossil-fuel-based energy resources; and 3) to create an additional carbon sink of 2.5 billion to 3 billion tonnes CO_2-equivalents through forest and tree cover.

Programme implementation

Mitigation efforts to reduce GHG emissions from agriculture are largely through production techniques that improve emissions intensity (e.g. initiatives such as horticulture land extension, increased rice intensification systems, direct-seed rice cultivation, solar pumps, micro-irrigation, neem coated urea scheme, bio-fertilisers, balanced feedstock, and bypass protein for livestock).

Environmental sustainability and resilience measures in agriculture – and climate-change adaptation measures in particular – have been gaining prominence, notably through programmes called “missions” focused on water management, integrated farming systems, and soil health management. In addition, the Union Budget 2022-23 promoted “chemical-free natural farming” throughout the country.4

One component of the NMSA, Farm Water Management, was implemented with the objective of enhancing water-use efficiency by promoting technological interventions such as drip and sprinkler technologies, efficient water application and distribution systems, and secondary storage. These activities have since been subsumed under the “Per Drop More Crop” (PDMC) component of the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) scheme in 2015-16. This scheme prioritises water conservation and its management in agriculture with the objective to extend the area under irrigation while preserving water resources.

Also under the NMSA, Rainfed Area Development focuses on Integrated Farming Systems to enhance productivity and minimise risks associated with climatic variability. Under this system, crops such as cereals or oilseeds are integrated with other activities such as horticulture, livestock, fisheries, agroforestry, and beekeeping to support farmers by providing additional income opportunities and mitigate the impacts of droughts, floods, or other extreme weather events.

The Mission for Integrated Development of Horticulture (MIDH) includes a sub-component focused on “Creation of water resources”. Payments support the creation of water sources through construction of community tanks, farm ponds, and reservoirs with plastic or reinforced cement concrete lining for irrigation of horticulture crops. Payments under this programme are provided as support to fixed capital formation for horticulture farmers, as well as general services support. The National Food Security Mission (NFSM) includes components such as “Water Carrying Pipes” and “Mobile Rain Gun” focused on hydrological infrastructure and water-use efficiency. These programmes cover 50% of the cost when acquiring pipes and mobile rain guns (pressurised irrigation sprinklers).

The NMSA also includes the Soil Health Management component. It promotes integrated nutrient management through targeted use of mineral fertilisers, including secondary and micro-nutrients, in conjunction with organic manures and bio-fertilisers to improve soil health and productivity. It also improves soil and fertiliser testing facilities, providing soil test-based recommendations to farmers for improving fertility. The Soil Health Card implemented in 2015 provides information to farmers about the nutrient status of their soil and recommends the appropriate dosage of nutrients to improve its health and fertility.

India is implementing specific schemes to promote organic farming, including the Organic Value Chain Development for North-East Region, the MIDH component “Adoption of Organic Farming”, and the Paramparagat Krishi Vikas Yojana Mission. Supporting Missions such as the National Mission on Agricultural Extension and Technology also aim to improve soil health and climate-resilient agro-ecological systems by providing technical assistance.

The 2023-24 Union Budget, released in February 2023, introduced the Prime Minister’s Promotion of Alternate Nutrients for Agriculture Management (PM PRANAM) scheme, which seeks to promote soil health and agriculture productivity. PM PRANAM incentivises states and Union Territories to support balanced use of chemical fertilisers as well as the use of alternative fertilisers. The proposed budget for this initiative is sourced from the existing fertiliser subsidy schemes. It entails granting 50% of the saved fertiliser subsidy, resulting from decreased chemical fertiliser usage compared to the previous three-year average, to the respective State or Union Territory.

Research and innovation

Investments in agricultural research continue to be a major driver of sustainable productivity growth. Public-sector research focuses on developing new crop varieties and management practices to improve yields and tackle pests and diseases for various agro-climatic conditions. The Indian Council of Agricultural Research (ICAR) launched the National Innovations in Climate Resilient Agriculture (NICRA) project in 2011 to enhance the resilience of Indian agriculture to climatic variability and climate change through strategic research and technology demonstration in crops and livestock. The project focuses on selected sectors, such as wheat, rice, maize, pigeon pea, groundnut, tomato, mango, banana, cattle, buffalo, and small ruminants. Major research themes include assessing the vulnerability of major production zones; assessing the impacts of and developing grain and horticulture varieties tolerant to climatic stresses; enhanced water- and nutrient-use efficiency and conservation agriculture; studying changes in pest dynamics, pest- and pathogen-crop relationships, and emergence of new pests and pathogens under climate change. The emphasis on new varieties and new technologies can be seen in the development of ICAR programmes such as Crop Science, Horticulture Science, and Plant Science.

Ongoing agro-climatic research includes the development of drought- and heat-tolerant genotypes in chickpea, pigeon pea, and mung bean and the development of drought-tolerant onions and other horticultural crops. India’s research institutions have also developed flood- and drought-tolerant rice varieties and early maturing wheat varieties for late-sowing areas to avoid terminal heat stress at the time of maturity. The National Agricultural Research System (NARS) is developing location-specific wheat varieties with traits addressing crop duration, varied soil conditions, and improved grain qualities while increasing grain yield levels through traditional breeding.

ICAR and various state agricultural universities (SAU) are targeting research to develop response mechanisms through early planting and short-duration varieties to mitigate potential climate-change risks. The NFSM includes components focused on capacity building, namely “Cropping-system-based training and Demonstrations on improved package for rice”, while the MIDH includes “Technology dissemination through demonstration and Good Agriculture Practices”. Several programmes focus on improving production practices, such as the “National Innovations in Climate Resilient Agriculture” (NICRA), “Drought and heat tolerant genotypes”, or “Agronomic management - Early planting”.

Several government initiatives, such as the Digital Public Agriculture Infrastructure, Digital Agriculture Mission, and the electronic National Agricultural Market (e-NAM scheme), aim to promote diffusion and adoption of agri-tech solutions, including AI-based precision agriculture, Internet of Things-based real-time data collection systems, and drone-based agriculture to improve farmer yield and profitability.

Recent policy developments

Domestic policy developments in 2023-24

Strategic framework

The 2023-24 Union Budget, released in February 2023, introduced the Agriculture Accelerator Fund to encourage agricultural startups by young entrepreneurs in rural areas. The fund aims to develop innovative and affordable solutions for challenges faced by farmers, and support diffusion and adoption of modern technologies to transform agricultural practices, increase productivity and profitability. Through the 2023-24 Union Budget, financial support for subsidised agricultural credit was also increased by 11%.

The 2024-25 Union Budget, released early February 2024, aims to support agricultural productivity growth through interventions targeting crop insurance, expanding the use of nano-fertilisers,5 and promoting self-sufficiency in oilseed production. The 2024-25 Union Budget also supports public and private investments in storage, as well as in marketing through the Prime Minister’s Formalisation of Food Processing Micro-Enterprises scheme. The budget also foresees support for of a Dairy Development programme.

Domestic price support policies

In June 2023, the GoI increased the minimum support price (MSP) from the previous marketing season for several summer planted (kharif) crops, including rice (by 7%), maize (6.1%), groundnuts (6.3%), soybeans (6.5%), pigeon pea (5.7%), black gram (6%), and cotton (8.2%). In October 2023, the GoI also increased the minimum support prices for winter planted (rabi) crops, including wheat (by 7.1%), barley (6.6%), gram (2%), lentils (7.1%), and rapeseed (3.7%). In June 2023, the GoI increased the Fair and Remunerative Price for sugarcane by 3.3%.

Policies impacting stocks

Several actions were taken in 2023 specifically with respect to the wheat crop. In April, India relaxed wheat procurement quality norms for regions where crops were damaged by heavy rains and winds. This includes the affected states of Punjab, Haryana, and Rajasthan. In August, India announced it would sell 5 million tonnes of wheat and 2.5 million tonnes of rice from public stocks on the domestic market, with a view to curbing domestic price inflation. In mid-September, India announced that as of mid-October 2023, traders, wholesalers, and large retailers would be allowed to maintain no more than 2 000 tonnes of wheat. This is down from a prior stock limit of 3 000 tonnes that was set in June 2023.

In May 2023, India approved a new grain storage programme of INR 1 trillion (USD 12 billion), to boost warehouse capacity. The programme aims to increase the storage capacity by 70 million tonnes, bringing the total to 215 million tonnes within the next five years.

In response to increasing domestic retail prices, India disposed of onions from public stocks on the domestic market through open market sales and direct retail sales to consumers. In 2023, the GoI has also directed the National Cooperative Consumers Federation of India (NCCF) and the National Agricultural Cooperative Marketing Federation of India (NAFED) to procure 700 000 tonnes of onions for national buffer stocks.

Input subsidies

Fertiliser subsidies were reduced in financial year 2023/24 from INR 2.55 trillion (USD 31 billion) to INR 1.9 trillion (USD 23 billion). This 25.5% reduction was triggered by lower fertiliser prices during the 2023/24 marketing year. The allocation foreseen for financial year 2024/25 is also lower, at INR 1.64 trillion (USD 20 billion).

Support to consumers

At the end of November 2023, India extended for five years the Pradhan Mantri Garib Kalyan Anna Yojana programme, which provides free food grains to the poorest segments of the population. The programme would cover more than 800 million beneficiaries and is expected to cost INR 11.8 trillion (USD 142 billion).

Other policy developments

In October 2023, the GoI launched the Kasturi Cotton Bharat Brand website,6 an initiative that seeks to market Indian cotton as a premium brand by requiring farmers to produce cotton following a stipulated protocol. This is a joint initiative by the Ministry of Textiles, the Cotton Corporation of India, trade associations, and industry aimed at enhancing the global competitiveness of Indian cotton. The website will provide necessary information and updates for the registration process for ginners to produce cotton under this brand. To provide complete traceability of the brand across the supply chain, QR-based certification technology will be used at each stage of the processing and a blockchain based software platform will provide end-to-end traceability and transaction certificate.

In December 2023, India set a target of 20% blending of ethanol in petrol under the Ethanol Blending Programme (EBP) in ethanol supply year 2025-26. The estimated requirement is around 10.16 million litres, aiming to substitute this volume of petrol with ethanol. During the same month, the GoI also announced it would rely on maize for ethanol production to meet gasoline blending goals. However, in January 2024, India state fuel retailers raised the purchase price of maize-based ethanol by 8.8%, with the objective to improve domestic availability of sugar, another ethanol feedstock, amid an expected decline in domestic sugar output in the current marketing year.

The GoI implemented a multi-stakeholder approach to celebrate the International Year of Millets in 2023. The action plan focused on strategies to enhance production and productivity, consumption, strengthening value chains, marketing, and creating awareness of the health benefits of millets. The Indian Institute of Millets Research in Hyderabad has been declared as the Centre of Excellence for sharing best practices, research, and technologies at the national and international levels. The Ministry of Food Processing Industries has implemented the Production Linked Incentive Scheme for Food Processing Industry for Millet-based products until 2026 with an outlay of INR 8 billion (USD 97 million). In addition, under India’s G20 Presidency in 2023, the Agriculture Ministers endorsed the MAHARISHI Initiative (Millets And OtHer Ancient Grains International ReSearcH Initiative), emphasising the need to leverage the potential of millets for sustainable agriculture, food security, and rural development.

Trade policy developments in 2023-24

Export restrictions

On 20 July 2023, the Ministry of Commerce and Industry (MOCI) banned the export of non-basmati white rice, citing a significant rise in domestic prices.7 Export consignments would be allowed under restrictive conditions.8 This ban follows the export ban on broken rice in August 20229 and the levy of a 20% export duty on non-basmati white rice in September 2023. In addition, on 25 August 2023, India’s Ministry of Finance announced a 20% export duty on parboiled non-basmati rice.10 As of the last quarter of 2023, the GoI had imposed restrictions on nearly 80% of India’s total rice exports. Following the imposition of restrictive measures on non-basmati rice, the GoI approved shipments of rice to several countries in Asia and Africa between October and December 2023, upon the request of importing governments.11

On 27 August 2023, the MOCI also introduced minimum export prices for basmati rice exports. The GoI instructed the Agricultural and Processed Food Exports Development Authority (APEDA), responsible for regulating basmati rice exports, to issue export certificates only to basmati rice consignments with values exceeding USD 1 200 per tonne. Export contracts falling below this threshold need to be placed in suspension for further evaluation by a committee charged with reviewing the variation in prices.

On 8 December 2023, the MOCI extended until 31 March 2024 a ban on the export of de-oiled rice bran, a major ingredient in the preparation of cattle and poultry feed. Exports of de-oiled rice bran were initially banned in July 2023.

On 18 October 2023, the MOCI extended the export ban on sugar beyond 31 October 2023 to an indefinite period. The restriction is a continuation of the sugar export ban imposed between June and October 2022.12

In August 2023, India had imposed a 40% export tax on onions up to 31 December 2023. On 28 October 2023, India introduced until 31 December 2023 a minimum export price of USD 800 per tonne for onions. On 8 December 2023, the GoI banned the export of onions until 31 March 2024 and extended it in April 2024. However, it allowed exports to certain countries on a case-by-case basis. Following the removal of the ban early May 2024, India reintroduced a 40% export tax on onions as well as a minimum export price of USD 550 per tonne.13

To address problems of under-invoicing of apples being imported into India, in May 2023, the MOCI prohibited14 the import of apples where the cost, insurance and freight (CIF) import price is less than or equal to INR 50 (USD 0.6) per kg. The notification exempts Bhutan from the minimum import price conditions.

Tariff adjustments

On 1 April 2023, the GoI ended its 2022 tariff rate quotas (TRQs) of 2 million tonnes each for crude soybean and sunflower seed oils, which were previously set to function through 1 April 2024. The current revisions raise duties from 0% to 5.5% on both crude oils. This policy action attempts to reduce India’s reliance on imported edible oils while incentivising farmers to maintain large oilseed crop areas. Since 2021, the GoI amended its edible oil import duties eight times, having mostly altered the rates of unprocessed edible oils while keeping refined oil duties elevated to support domestic refineries.

On 15 May 2023, India revised its import tariffs on certain oilseeds and reduced tariffs on some types of vegetable oil. The import tariff on crude palm oil was lowered from USD 1 001 to USD 988 per tonne, while the tariff for Refined, Bleached & Deodorized (RBD) palm oil has been revised from USD 1 022 to USD 1 020 per tonne. Import tariffs on other vegetable oils were also lowered, with crude palm olein tariffs set at USD 1 030 per tonne; those on RBD palm olein set at USD 1 033 per tonne; and those on crude soybean oil lowered to USD 983 per tonne. In addition, on 15 June 2023, the Ministry of Finance reduced the import duty on refined sunflower and soybean oils, from 17.5% to 12.5%, until March 2024. This aligns with the government’s import duty for RBD palm olein and is intended to control fluctuating edible oil prices. On 22 December 2023, India announced it would extend the reduced tariff until March 2025.

On 5 September 2023, the Ministry of Finance lifted retaliatory tariffs imposed in 2019 on certain agricultural products of US origin. This includes products such as almonds, apples, chickpeas, lentils, and walnuts.15

In December 2023, India exempted imports of yellow peas from customs duties (set at 10%) and the domestic tax Agriculture Infrastructure and Development Cess16 (40%) through 31 March 2024.17 During this period, yellow pea imports are also allowed through ports other than Kolkata, which was the only authorised port prior to December 2023. However, all imports of yellow peas during this period are subject to compulsory registration under India’s Import Monitoring System.

Other trade policy developments

In October 2023, the Ministry of Health and Family Welfare Food Safety and Standards Authority of India (FSSAI) announced that India’s Customs Authority will no longer need to obtain the FSSAI’s clearance for food ingredients or products that are imported into India for re-export or to produce value-added products for export markets.

Policy context

Key economic and agricultural statistics

India is the seventh largest country in the world by land area and became the most populous country worldwide in 2022. While the share of urban population continued to increase over the past decade, about two-thirds of the population still lives in rural areas. At just 0.13 ha per capita, agricultural land is very scarce.

Agriculture continues to be an important part of India’s economy. The sector accounts for 16.7% of GDP, but the estimated 42.9% share of employment indicates that labour productivity remains significantly lower than in the rest of the economy (Table 13.2). The productivity gap is also reflected in the evolution of farm incomes, which have increased by less than one-third that of non-agricultural incomes in recent years. Agriculture’s weight in the economy has gradually declined, mostly in favour of services, which have led economic growth over the last two decades and played a more important role in India’s economic development than in most other major emerging economies.

Indian agriculture is continuing to diversify towards livestock and away from grain crops. While grains and milk remain dominant, there has been a gradual change in the composition of production to other crops – such as sugar cane, cotton, fruit and vegetables – as well as certain meat sub-sectors. The livestock sector has seen faster and less volatile growth than the crop sector. The agricultural sector continues to be dominated by a large number of small-scale farmers, as the national average farm size has been in steady decline.

Table 13.2. India: Contextual indicators

	India		International comparison
	2000*	2022*	2000*	2022*
Economic context			Share in total of all countries
GDP (billion USD in PPPs)	2 212	11 875	5.5%	8.7%
Population (million)	1 060	1 417	24.7%	26.9%
Land area (thousand km2)	2 973	2 973	3.6%	3.6%
Agricultural area (AA) (thousand ha)	180 975	178 528	6.1%	6.1%
			All countries1
Population density (inhabitants/km2)	356	477	52	64
GDP per capita (USD in PPPs)	2 087	8 379	9 363	25 965
Trade as % of GDP	10.2	17.5	12.3	16.6
Agriculture in the economy			All countries1
Agriculture in GDP (%)	21.6	16.7	2.9	3.8
Agriculture share in employment (%)	59.6	42.9	-	-
Agro-food exports (% of total exports)	10.9	10.4	6.4	8.0
Agro-food imports (% of total imports)	5.6	5.2	5.8	6.9
Characteristics of the agricultural sector			All countries1
Crop in total agricultural production (%)	73	63	-	-
Livestock in total agricultural production (%)	27	37	-	-
Share of arable land in AA (%)	89	87	32	34

Note: *or closest available year.

1. Average of all countries covered in this report.

Sources: OECD statistical databases; International Labour Organization (ILO); UN Comtrade; World Bank, WDI; FAO database and national data.

Real GDP growth has been fluctuating between 4% and 8% over the last two decades, highlighting remaining structural bottlenecks in areas such as labour markets or the business environment. The COVID-19 pandemic and related restrictions led to a 5.8% drop in GDP, but growth rebounded to 9.1% in 2021, placing India again among the fastest growing G20 economies. Growth moderated, however, in 2022 and 2023 against the backdrop of Russia’s war of aggression against Ukraine, supply chain disruptions, and rising energy and food prices. The relatively low unemployment figure (averaging about 6.4% in 2020-22) hides significant informal employment. Against a background of higher international prices and rising domestic wholesale prices for selected food items, inflation remains high at 5.6% in 2023 (Figure 13.3).

India is a consistent net agro-food exporter, with agro-food exports representing 10.4% of total exports. However, agro-food imports have until recently been growing faster than exports. Products for direct consumption – of low value, raw or semi-processed, and marketed in bulk – dominate agro-food exports, representing 58% of the total in 2022. Processed products for further processing by domestic industry are the main import category, accounting for 67% of total agro-food imports (Figure 13.4).

Agricultural output growth in India averaged 3.3% in 2012-21, well above the world average (Figure 13.5). This has been driven mainly by a significant increase in total factor productivity (TFP) which grew at 2.4% per year, backed by technological progress in the form of improved seeds and better infrastructure (including irrigation coverage, road density, and electricity supply).

However, the sustained growth in agricultural output and fertiliser use have put mounting pressures on natural resources, particularly land and water. This is reflected in the nutrient surplus intensities at the national level, which have grown over time and are much higher than the average for OECD countries (Table 13.3). Eighty-seven per cent of total water abstractions are by the agricultural sector. The share of agriculture in total GHG emissions is also higher than the OECD average, partly due to the weight of the agricultural sector in the Indian economy. Livestock rearing is the main source of GHGs.

Table 13.3. India: Productivity and environmental indicators

	India		International comparison
	1991-2000	2012-2021	1991-2000	2012-2021
			World
TFP annual growth rate (%)	0.4%	2.4%	1.7%	1.1%
			OECD average
Environmental indicators	2000*	2022*	2000*	2022*
Nitrogen balance, kg/ha	90.7	128.6	32.1	28.2
Phosphorus balance, kg/ha	20.8	26.6	3.3	2.3
Agriculture share of total energy use (%)	5.3	4.8	1.7	2.0
Agriculture share of GHG emissions (%)	23.3	14.4	8.7	10.1
Share of irrigated land in AA (%)	33.4	39.4	-	-
Share of agriculture in water abstractions (%)	..	87.0	47.0	49.5
Water stress indicator	..	..	8.7	..

Note: * or closest available year.

Sources: USDA Economic Research Service, Agricultural Productivity database; OECD statistical databases; FAO database and national data.

Historical trends in agricultural policies

Food security has been an important objective of agricultural and trade policy since India’s independence in 1947. Food shortages in the early 1960s made crop productivity and farm output a key policy ambition. While scope to further expand the area under cultivation was limited, the advent of the “green revolution” in the mid-1960s raised crop productivity through improved technologies and seed varieties. This was accompanied by expanded extension services and increased use of fertilisers, pesticides, and irrigation.

The government of India (GoI) introduced several marketing regulations affecting the sale, stocking, and trading of agricultural commodities. The Essential Commodities Act (ECA) introduced in 1955 provided for the control of production, supply, distribution, and pricing of essential commodities. During the 1960s and 1970s, most states also enacted and enforced Agricultural Produce Markets Regulation (APMR) Acts, with the first point of sale of agricultural products occurring at regulated market yards (mandis) under the responsibility of Agricultural Produce Market Committees (APMC). Two institutions were set up in 1965 to manage prices and distribution of wheat and rice, namely the Food Corporation of India (FCI) and the Agricultural Prices Commission, later renamed the Commission for Agricultural Costs and Prices (CACP). These institutions introduced complex domestic marketing regulations and border measures that increasingly penalised Indian farmers who often received less than international prices for their products.

In the 1970s, several government programmes were set up to increase production, covering industrial organisation, research, finance, and trade. In the case of milk production and processing, this took place at three levels:

• At the farm-level, dairy farmers were organised into co-operatives and provided with advanced technologies, such as animal breeds that produced more milk.

• At the district level, co-operative unions were formed, who owned and operated milk processing plants as well as storage and transport equipment and provided animal health services.

• At the state level, federations conducted and co-ordinated the nation-wide marketing of milk.

Government funding for agricultural research and extension increased, and many State Agricultural Universities (SAU) were set up. Institutional lending to farmers expanded by directing commercial banks (nationalised from 1969) to provide credit to agriculture. New financial institutions were established, such as the National Bank for Agriculture and Rural Development (NABARD) in 1982 and regional rural banks. Import competition was highly restricted to allow domestic agricultural production to increase.

In the 1980s and 1990s, yield-enhancing “green revolution” techniques were increasingly used, reaching new regions and crops such as pulses, oilseeds, and coarse grains. Broader economic deregulation at that time largely bypassed agriculture, in part because of the prevalence of state regulations in the sector. From 1980 to 1999, budgetary support to agriculture increased more than tenfold.

In the 2000s, agricultural policies focused increasingly on enhancing productivity and farmers’ incomes. The National Agricultural Policy (NAP), formulated in 2000, prioritised increasing cropping intensity on existing agricultural land, developing rural infrastructure, and developing and disseminating agricultural technologies. The National Policy for Farmers (NPF), approved in 2007, identified a need to focus more on the economic well-being of farmers than just on production.

The Eleventh Five-Year Plan 2007-12 focused on bringing technology to farmers, improving the efficiency of investments, access for the poor to land, credit, and skills, and addressing water management concerns. The Twelfth Five-Year Plan 2012-17 was articulated around more budgetary support to agriculture and infrastructure along with an aim to improve the functioning of markets, more efficient use of natural resources, and improved delivery of government services such as credit and animal health.

The 2012-17 plan established the Targeted Public Distribution System (TPDS) to replace the previous Public Distribution System (PDS, established in 1997). The new system aimed to reduce the amount of grain released from government stocks for distribution that did not reach intended beneficiaries.18 In addition, the plan redirected some food subsidies to other welfare schemes to better target the poor, introduced policies specific to individual states or areas, and redefined the definition of “poor” for the purpose of the TPDS. The 2013 National Food Security Act (NFSA) further addressed these concerns.

In 2016, the GoI set the target of doubling farmers’ income by 2022‑23 and by 2018 five-year plans were replaced by a framework of three-year action agendas. These agendas were prepared by the National Institution for Transforming India (NITI Aayog, the erstwhile Planning Commission of India), a policy think-tank of the government of India. The Agriculture Export Policy framework was established at the end of 2018, aiming to double agricultural exports by 2022-23 and boost the value-added of agricultural exports. To address farm indebtedness, several states implemented support packages for farm loan waivers between 2017 and 2020.

The only output support payments were introduced between 2018 and 2021 for clearing of arrears for sugar cane deliveries. The subsidies were provided directly to sugar cane farmers. These were replaced in 2022 by a support scheme for first-stage buyers of sugar cane (the scheme for providing assistance to sugar mills for expenses on marketing costs and other processing costs).

Marketing regulations under the Agricultural Produce Market Committees (APMC) Acts were progressively amended in 2003, 2007 and 2017. This was to address concerns around highly fragmented markets, inadequate physical marketing infrastructure, large numbers of intermediaries in supply chains and insufficient remuneration to farmers. Even though state governments were encouraged to adopt similar reforms, implementation of agricultural marketing reforms remained highly differentiated across India’s states.

In June 2020, the GoI initiated reforms to domestic agricultural marketing regulations as part of a COVID-19 support package. The proposed reforms included a set of ordinances to deregulate major food crops from the 1955 ECA, allow farmers to sell their agricultural products outside of government-regulated markets and allow barrier-free inter- and intra-state trade of agricultural commodities. The central government had also proposed providing a legal framework for farmers to facilitate contract farming schemes with processors and other market actors in supply chains to reduce price risk. However, on 29 November 2021, the Parliament approved a bill withdrawing the three laws. Moreover, in December 2021, the GoI set up a committee to review the legal framework for the MSP system.

In 2022, India introduced export restrictions for several commodities with an open-ended timeframe and the objective of stabilising fluctuations in domestic prices following Russia’s war of aggression against Ukraine. Commodities affected by export bans, duties, or permits include various types of rice, wheat, sugar, and related products (e.g. wheat flour).

Table 13.4. India: Agricultural policy trends

Period	Broader framework	Changes in agricultural policies
1950-1965	Expansion of agricultural area was the main source of output growth	Agrarian reforms (abolition of intermediary landlordship, imposition of land ceiling) Strengthening of co-operative credit institutions Essential Commodities Act 1955
1965-1980	Increase in productivity main was the source of growth “green revolution”	Promoting the adoption of technological breakthroughs in rice and wheat production Policy support for marketing, research and credit Introduction and formalisation of lending to priority sectors, including agriculture New institutions, e.g. State Agricultural Universities, Food Corporation of India, Agricultural Prices Commission Programmes to increase production and processing of milk (support to breeds producing more milk, producer organisations, and processing and transport equipment) Minimum support prices
1980s	Widespread use of technology in major crop areas	Some delicensing and deregulation Increase in subsidies to agriculture
1990s	Economic and trade liberalisation in agriculture lags behind general economic reforms	Cautious relaxation of trade protection in some products, e.g. sugar, cotton, edible oils, wheat, rice Increases in input subsidies Targeting of beneficiaries of public distribution system of food grains
2000s	Demand-driven shift towards producing more fruit, vegetables and livestock products Increasing price gaps between international and domestic prices for producers	Alternate tightening and loosening of market and trade regulations (including export restrictions) Agricultural marketing regulations influencing pricing, procuring, stocking, and trading of commodities Large increases in input subsidies, including credit Support to high productivity seeds particularly cotton
Since 2010	Major participant in world markets for some commodities Continued price gaps between international and domestic prices taxing producers Increasing direct payments to producers Increasing support to consumers	More structured interaction between central and state level authorities Expansion of food subsidies and 2013 National Food Security Act Pilots to replace physical distribution of grains with cash transfers in selected states and Union Territories Agriculture Export Policy framework aimed at ensuring processed and organic products are not subject to export restrictions Doubling Farmers’ Income by 2022-23 action plan State-level support packages for farm loan waivers Direct income transfer programme PM-KISAN Changes to domestic agricultural marketing regulations initiated in 2020 as part of the COVID-19 economic support package; withdrawal of reforms at the end 2021 Export restrictions applied to several commodities in 2022 and 2023 (rice, wheat, sugar, onions, and related products)

Over the past two decades, producer support was composed of negative market price support (MPS), and budgetary allocations, including almost exclusively input subsidies. India’s percentage PSE fluctuated markedly, registering a high of zero in 2000, a low of ‑31% in 2007, followed by large swings before increasing negative support in 2021-23 (Figure 13.6). Export restrictions apply since 2022 to various types of rice, wheat, sugar, onions, and related products (e.g. wheat flour). These variations were driven primarily by changes in the relative levels of domestic and international prices underlying MPS, while input subsidies followed a more steadily increasing trend. The particularly large absolute size of negative MPS in 2011-13 (and to some extent in 2007 and 2008) coincides with periods of high international commodity prices not or only partially transmitted to the domestic market, due at least in part to India’s use of export-impeding measures (for example, export restrictions or export bans applied in several of those years to wheat, non-basmati rice, chickpea, sugar and milk). The negative value of the PSE reflects that, on average, domestic producers were implicitly taxed, as the increasing budgetary payments to farmers did not offset the price-depressing effect of complex domestic regulations and trade policy measures. Payments not requiring production have been increasing since 2018, driven by higher budgetary allocations to the direct income transfer programme Pradhan Mantri Kisan Samman Nidhi (PM-KISAN). Against a backdrop of increasing reference prices for the exported commodities covered since 2020, MPS has been higher than during 2015‑19.

References

[3] Gulati, A., D. Kapur and M. Bouton (2020), “Reforming Indian Agriculture”, Economic & Political Weekly, Vol. 55/11, https://www.epw.in/journal/2020/11/special-articles/reforming-indian-agriculture.html (accessed on 15 March 2020).

[2] ICRIER (2022), Background Analysis for India chapter in Agricultural Policy Monitoring and Evaluation Reports.

[1] OECD/ICRIER (2018), Agricultural Policies in India, OECD Food and Agricultural Reviews, OECD Publishing, Paris, https://doi.org/10.1787/9789264302334-en.

Notes

← 1.  In the seven states or Union Territories (UTs) that do not have an APMC act, procurement can take place outside mandis.

← 2.  Agriculture marketing also covers the futures market governed by the Securities and Exchange Board of India (SEBI), with the largest value of agricultural commodity trade taking place through the National Commodity Derivative Exchange (NCDEX). In addition, the Negotiable Warehouse Receipt System (NWRS) – established under the Warehousing Development and Regulatory Authority (WDRA) – aims to support farmers by storing products in warehouses. However, farmers, especially small and marginal, do not directly trade in agri-futures market in India.

← 3.  This represents the price below which exporters are not allowed to export a specific commodity. A minimum export price is set taking into consideration concerns about domestic prices and supply of that specific commodity.

← 4.  “Natural farming” is a chemical-free farming system rooted in Indian tradition enriched with modern understanding of ecology, resource recycling, and on-farm resource optimisation. It is considered as agroecology based diversified farming system which integrates crops, trees, and livestock with functional biodiversity. It is largely based on on-farm biomass recycling with major stress on biomass mulching, use of on-farm cow dung-urine formulations, maintaining soil aeration and exclusion of all synthetic chemical inputs. Natural farming is expected to reduce dependency on purchased inputs.

← 5.  Nano-fertilisers are nutrients that are encapsulated or coated within nanomaterial in order to enable controlled release, and its subsequent slow diffusion into the soil.

← 6.  Information on the website is available at: https://pib.gov.in/PressReleasePage.aspx?PRID=1969673.

← 7.  Notification No. 20/2023 – Amendment in Export Policy of Non-basmati Rice under Harmonized System (HS) Code 1006.30.90 (semi-milled or wholly milled, whether polished or not, glazed: other).

← 8.  Exports were allowed only if vessel loading was underway, the shipping bill was filed and the vessel was already berthed, arrived, or anchored, or if the rice consignment was handed over to Indian Customs and registered in its system before MOCI’s notification. The notification also includes provisions to allow non-basmati white rice exports, as authorised by the Indian Government, of consignments requested by foreign governments for their food security needs.

← 9.  Under HS code 1006.40.00.

← 10.  Notification No. 49/2023 (Customs) applying to HS code 1006.30.10.

← 11.  This includes countries such as Nepal, Cameroon, Côte d’Ivoire, Guinea, Malaysia, the Philippines, Seychelles, Senegal, Indonesia, Mali, Bhutan, Egypt, and Kenya.

← 12.  The export of raw, white, refined, and organic sugar under HS codes 1701.14.90 and 1701.99.90 is restricted. For the sugar marketing year 2022/23, India put the export cap at 6.1 million tonnes of sugar, compared to 11.1 tonnes from the previous marketing year.

← 13.  In 2022, India exported 2.6 million tonnes of onions.

← 14.  Notification No. 5/2023 Amendment in Import Policy Conditions of Apples under the Indian Trade Classification (ITC) HS code 0808.10.00 of Chapter 08 of the ITC (HS) 2022.

← 15.  On 15 June 2019, India had imposed retaliatory tariffs on 28 US-origin products, levying additional duties of between 10% and 20% in response to the United States invoking Section 232 national security measures on India’s steel and aluminium and the termination of India’s Generalized System of Preferences status. In June 2023, India agreed to lift retaliatory tariffs on five agricultural products and two non-agricultural products.

← 16.  AIDC was introduced in the 2021-22 Union Budget as a tax imposed on the commercial production of agricultural produce. The cess is imposed at a specific rate on the value of these goods. It aims to raise funds specifically for financing the development of agriculture infrastructure in India.

← 17.  The measure applies to customs product code 07.13.10.10 and implies that yellow peas are exempt from the minimum import price of INR 200 per kg restriction for duty assessment during this period. The measure is introduced through the Ministry of Finance Customs Notification No. 64/2023 and the MOCI Notification No. 50/2023.

← 18.  The Targeted Public Distribution System (TPDS) plays the same role as the Public Distribution System (PDS) before the TPDS but with a special focus on the poor.