Abstract
Today, India ranks second worldwide in farm output. The economic contribution of agriculture to India's GDP is steadily declining. India is the largest producer, consumer and exporter of spices and spice products. It ranks third in farm and agriculture outputs. Agricultural export constitutes 10 per cent of the country‘s exports and is the fourth-largest exported principal commodity (APEDA, India). The total agricultural exports to United Arab Emirates rose from US $ 368 million in 2003 to US $ 2,296 million in 2012, which is almost three times greater than the exports in 2003. There is a growth in India‘s exports to UAE around $ 1,928 million in a decade that is from 2003 to 2012.This study highlights the major agriculture products of India to UAE. It has also shed light on the current status of agriculture bilateral trade between India and UAE. Agriculture policies of both countries are also being taken into account.
Keywords: GDP, Agriculture trade, bilateral trade, Output, APEDA.
Introduction
India is a major producer and consumer of agricultural or primary products but still insignificantly contributes in international trade. Moreover its share in world agriculture trade is declining due to self-sufficiency and food security policies of the government following the green revolution. Thus comparing India‘s domestic price with world price is of huge importance. Agriculture plays a very important role in India‘s economy. About 58 per cent of the rural households depend on agriculture as their principal means of livelihood. Agriculture, along with fisheries and forestry, is one of the largest contributors to the Gross Domestic Product (GDP). Today, India ranks second worldwide in farm output (Economic survey 2017-18). The economic contribution of agriculture to India's GDP is steadily declining. India is the largest producer, consumer and exporter of spices and spice products. It ranks third in farm and agriculture outputs. Agricultural export constitutes 10 per cent of the country‘s exports and is the fourth-largest exported principal commodity (APEDA, India). The agro industry in India is divided into several sub segments such as canned, dairy, processed, frozen food to fisheries, meat, poultry, and food grains. The Department of Agriculture and Cooperation under the Ministry of Agriculture is responsible for the development of the agriculture sector in India. It controls many other bodies, such as the National Dairy Development Board (NDDB), to develop other allied agricultural sectors. India exported $39 billion worth of agricultural products in 2013, making it the seventh largest agricultural exporter worldwide and the sixth largest net exporter (APEDA, India).
India's arable land area of 159.7 million hectares (394.6 million acres) is the second largest in the world, after the United States. Moreover India‘s total irrigated crop area of 82.6 million hectares (215.6 million acres) is the largest in the world (world bank). India is among the top three global producers of many crops, including wheat, rice, pulses, cotton, peanuts, fruits and vegetables. Worldwide, as of 2011, India had the largest herds of buffalo and cattle, and the largest producer of milk and has one of the largest and fastest growing poultry industries (annual account report by APEDA,2016-17).
Agriculture Sector of India at a glance
India is a country known for its agriculture sector .There was a time when more than 50% national income was generated from primary sector of India but as the pace development paved its way, other sector sectors over taken this traditional sector .And now the contribution of agriculture and allied sectors in GDP is 17.5%.Top five trading partners of India
The above table shows India‘s major trading partners .The table highlights India‘s total trade with China, UAE, USA, Saudi Arab and Hong Kong for the year 2017-2018.we have taken latest bilateral trade data from the source so that we can identify UAE‘s position which is second in terms of exports and its value is US$ 28146 Million. While UAE has fourth position in terms of imports valued of around US$ 21739 million. During 2017-18 India was having positive balance of trade with UAE and along with that with USA.Besides that with China, Saudi Arab and Hongkong, India has been experiencing negative balance of trade (APEDA report 2017-18).
Indian Agriculture products and its major importers
In this section we will be discussing about different categories of agriculture produce of India. It would help to know what products UAE imports from India and also provides information about other major importers of Indian primary goods. In order to simplify the study some significant commodities for the year 2017-2018 are taken.
India’s status as an importer country with UAE during the year 2017.
Pattern of trade of both countries that is India and UAE is quite different as exports of UAE dominates in oil sector and exports of India dominates in agriculture sector .Here we have some data from UN Comrade, it reveals that India imports very little (agriculture products ) from UAE. This table shows imports of India from UAE for the 2017, it is because we have tried to study recent trade pattern between the two countries.
India has recently imported dates from UAE equivalent US$ 19.16 million. Then sugarcane products accounts for US$3.58 million .Whiskey and protein supplement accounts for US$3.41 and US$3.42 million respectively. Flaked oats contribute very little that is US$2.84 million. India has import juices of citrus fruits of valued US$ 3.09 million and other juices accounts for US$0.24million.Natural honey imported by India equal to the value of US$ 0.3 million. Hence it is clearly noticed that India dominates in agriculture production and it imports very little in comparison to UAE which relies on India for many commodities like basmati rice, non basmati rice, fruits pulp, cocoa products, floriculture, fruits etc.
Status of UAE in India’s Agriculture Trade
On the basis of recent data available (source, APEDA) on agriculture exports of India to different countries we have find out that UAE is one of the major trading partner of India. For UAE India is a major source of Agriculture products. India has recently exported Basmati rice, Cashew, Cereal preparations, Cocoa products, Dairy Products, Floriculture, fresh vegetables, fresh fruits and fruit and vegetable seeds and processed meat to UAE. Among these primary products UAE is the top major importer of processed meat ,fresh vegetables and fresh fruits.
The total agricultural exports to United Arab Emirates rose from US $ 368 million in 2003 to US $ 2,296 million in 2012, which is almost three times greater than the exports in 2003. There is a growth in India‘s exports to UAE around $ 1,928 million in a decade that is from 2003 to 2012. From 2003 to 2004 there is considerable increase in agriculture exports of India to UAE. In 2008 India exported to UAE equivalent to 1702 million dollar, there was a slight decline in exports in 2009, it was of the value 1586 million dollars then in 2012 India‘s exports to UAE were of 2296 million dollars (world trade atlas data base) .There is a great potential for Indian exports to UAE due to same consumption pattern as in India. It is because considerable numbers of Indian migrants are living in UAE, and they are demanding for fresh vegetables, fruits, meats and processed food items. On the other hand UAE is an oil based economy with higher level of gross per capita income this is another reason for high demand for agriculture commodities.
UAE ̳s total exports to India were of the value of 19622.81 million dollars in 2012 - 2013.UAE‘s exports of Fish and Aquatic vertebrates to India in the year 2002-2003 was 0.28 Million dollars and in 2003-04 it was 0.09 UAE exported dairy products to India accounts for 0.3 million dollars and for 2003-04 it was also 0.3.Then we come to certain roots and tubers which accounts for 0.55 million dollar in the year 2002-03 and 0.06 in the next consecutive year. Fruits, Nuts, Melons accounts for 1.71 million dollars and for 2003-2004 it was 0.77 million dollars .Oil seeds and Grains for 2002-03 and 2003-04 has remain same that is 0.04 million dollars , coffee, tea, spices accounts for 0.38 million dollars and for 2003-04 it accounts for 0.16 million dollars. As we can observe very clearly that UAE‘s imports to India in agriculture or primary products is not so much impressive in fact it is very little in quantity .UAE‘s exports to India in agriculture products are more or less remain same over the years .As the above mention data has also suggested that there is almost same pattern in agriculture products imported by India from UAE(UAE, central bank,2014).
Agriculture exports of India to UAE have considerable share in UAE‘s market .Data extracted from DGCIS at HS code four, says that among all cereals, the most demanding export commodity of India to UAE is Rice it accounted as $292.9 million in 2017 and for the next consecutive year it is accounted as $278 million. Other important cereals are wheat and maize. As far as coffee tea mates and spices are concerned, India exports heavily tea to UAE in 2017, the amount was $1611 million and for 2018 it has accounted as $1785 million, coffee is the other most important export commodity to UAE out of this category. Among vegetables, dried leguminous vegetables are observed to be most demanding, in 2017 leguminous vegetables accounted as $269million and in 2018 $228 million to UAE from India. Ground nuts and sunflower seeds are also important exports of India to UAE. In 2017 the exports of sunflower seeds was equivalent to $1.3 million and in 2018 it reached to $7.2 million. As far as ground nuts export is concerned it was $5.2 million in 2017 and in 2018 it is found to be $4.9 million.
Agriculture Trade Policy of India
India is a labor intensive country whose back bone is agriculture sector. India is one of largest producer of sugar tea spices seafood vegetables fruits rice etc. India‘s share in global exports has been increasing which is satisfactory indicator of its growth. A few years back Share of agriculture products in global exports was 1% that has increased to 2.2% which is a substantial figure.
Ministry of Commerce desires to frame such agriculture export policy which also helps farmers get benefit of their hard work. Agriculture export policy of India launched by Ministry of Commerce, Government of India in 2018 with a view to double farmers‘ income by 2020. But due to corona crisis policy could not work. Farmer‘s condition has become more vulnerable. Government is working on it to overcome this crisis.
India’s Agriculture Export Policy
Objectives
. To double agricultural exports from present US$ 30+ Billion to US$ 60+ Billion by 2022 and reach US$ 100 Billion in next few years thereafter, with a stable trade policy regime.
. To diversify our export basket, destinations and boost high value and value added agriculture exports including focus on perishables
. To promote novel, indigenous, organic, ethnic, traditional and non-traditional agri products exports.
. To provide an institutional mechanism for pursuing market access, tackling barriers and deal with sanitary and phyto sanitary issues.
. To strive to double India‘s share in world agri exports by integrating with global value chain at the earliest.
. To enable farmers to get benefit of export opportunities in overseas market.
A Brief Study of Agriculture sector of UAE
UAE is a federation made up of seven Emirates: Abu Dhabi, Ajman, Al Fujairah, Dubai, Ras al Khaimah, Sharjah, and Umm al Qaiwain .In the recent times the largest emirate is Abu Dhabi and Abu Dhabi City is the capital of both the emirate and the whole country. In 2005, the national Gross Domestic Product (GDP) of the United Arab Emirates was US$180.617 billion. Then became US$ 358.135 in 2015 and it was US$65.744 billion (Economist intelligence unit, Emirates NBD research).The main source of income is the revenue from oil exports. In 2005 economically active population was 2.7 million (59 percent of the total population), of which 86 percent was male and 14 percent female. Agriculture employed an estimated 4 percent of the labor force and accounted for 2 percent of the country‘s GDP. The entire labor force working in agriculture is male. UAE‘s economy is oil based but there is a little scope for agriculture especially for organic farming. UAE has 34 organic farms (Dubai customs, NBD research, 2014). UAE from last few years focusing on organic farming and successful in producing broccoli, tomatoes, kale strawberries, cucumbers, chilies, potatoes, peas, carrots etc. One significant produce of UAE‘s economy is organic palm dates.
From the last decade UAE experienced some relative improvement in its non-oil sectors, achieving the goal of being the second largest Arab economy and, very recently, the country has been ranked as the 7th strongest Asian economy. The UAE‘s economy, like other oil exporting countries, faced considerable oil price volatility in the 1990s. However, during that period UAE registered a real average GDP growth about 7 percent.
Agriculture Policy of UAE
Agriculture sector of UAE is quite limited; it is confined to few products only. Existing agriculture sector of UAE going through transformation. Farmers are moving towards organic farming. Agriculture mainly practiced in Ras Al Khaimah, Fujairah, Al ain and in some other areas in Dubai and Abu Dhabi. In UAE agriculture is highly dependent on use of latest technology due to lack of fertile land and lack of water resources. Agriculture hydroponics is a significant technology in UAE. Hydroponics is basically a subset of hydro culture in which plants are grown in water instead of soil, plants are kept in mineral nutrients solution .It is a creative and useful way of farm production. It is worthy to mention that the use of sprinkler, drip and fountain irrigation systems rose to 91 per cent in 2011 from 32 per cent in 1999.
UAE – India agriculture deals
The then Union minister (GOI) Mr. Suresh Prabhu announced that UAE and Saudi Arabia are going to invest in India‘s agriculture sector for the sake of food security in their respective countries. India will provide them primary product which is a great deal for UAE and Saudi Arabia. This deal is closely related to the concept of special economic zone. According to the sources, UAE wants to invest in food processing industries and in Organic farming. In an effort to improve food security, the UAE government has invested in sustainable food security projects in the region and abroad especially in Vietnam, Egypt, Pakistan, Romania, Sudan to safeguard supply against market price fluctuations. The UAE re-exports nearly 50% of imported food products to other GCC countries as well as Russia, India, Pakistan and East Africa. According to Economist Intelligence Unit, in 2010, the UAE‟s imports accounted for US$3.6 billion. This is estimated to rise to US$8.4 billion in 2020.
Conclusion
India is a nation blessed with fertile land as compared to UAE which is still struggling for quality land availability. About 90% of the Gulf‘s food demand is met with imports as agriculture is restricted due to climatic conditions and land use restrictions. The report highlights that agriculture contributes only 0.9% of the UAE‘s GDP and only 1% of the UAE land is available for agriculture in comparison to the UK which uses 24% of the its land for agriculture. UAE re- exports nearly 50% of imported food products to other GCC countries as well as Russia, India, Pakistan and East Africa. According to the Economist Intelligence Unit, in 2010, the UAE‘s imports accounted for US$3.6 billion. This figure is estimated to rise to US$8.4 billion in 2020. The UAE is one of the biggest re-exporters of rice. In 2010, the UAE re-exported a total of US$520.8 million, which accounted for approximately 90% of the world‘s re-exports (Dubai multi commodity centre report, 2011). According to Dubai Exports, 85.7% of the UAE‘s re- exported rice goes to Western Asia. The other markets include Oman, Nigeria, Zimbabwe, US, Mozambique, Madagascar, Sri Lanka, South Africa, Zambia, Uganda, Rwanda, Mauritania and Ethiopia. Not only UAE but the whole MENA region is an essential export destination of Indian agriculture exports (Business Standard.com, 2019). Major export destination of the UAE of vegetables are Iran, Saudi Arabia, Oman Kuwait, Iraq (2018). India, USA, Canada, Australia and Spain were major vegetable exporters to UAE for the year 2018 (Trade statistics, WITS). India is a significant market for UAE, and UAE is also equally economically important for India. There is much more scope of agriculture trade between these two countries as UAE is the known re- exporter of agriculture goods. India is a prominent producer of agriculture base products so the agriculture deals may go high and pave way for further bilateral trade in various sectors and areas.
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