how to make india self reliant in agriculture sector
A limited number of items, mostly primary commodities or processed
agricultural products, are subject to duties. Currently, the only products subject
to an export tax (at the rate of 10%) are goat, sheep and bovine leathers.
Products may also be subject to a minimum export price. The list of products
subject to minimum prices includes basmati and non-basmati rice, cotton, and
hard and soft cotton waste. Most minimum export prices are specifiedin dollars
on an fob basis.
Settlement of Bills: The Government prescribes conditions for exchange control
and settlement of bills related to exports under the authority of the Foreign
Exchange Regulation Act, 1973. For normal commercial exports to all countries,
except Nepal and Bhutan, exporters are required to complete the GR Form in
duplicate. The GR Form covers exports not made by post.
With few exceptions, all exports must be declared on the appropriate form and
the exporter's code number as assigned by the Reserve Bank of India must be
shown on the form.
The payment arrangements are letter of credit, sight draft, time draft and
shipment on consignment. The time limit for settlement of export proceeds, that
is, the amount representing the full export value of the goods, is six months. A
maximum of 15 months is allowed for exports to Indian-owned warehouses
Documents: The following documents are required for exports:
1. GR form;
2. export licence;
3. export declaration;
4. customs entry form;
5. customs invoice;
6. commercial invoice;
7. certificate of origin;
8. bill of lading/air waybill;
9. packing list.
Special documents may be required depending on the type of product or
destination. Certain export products may require a quality control inspection
certificate from the Export Inspection Agency. Some food and pharmaceutical
product may require a health or sanitary certificate for export.
To cover products under GSP (generalized system of preferences) a certificate of
origin may be required. The Export Inspection Agency, the various export
promotion councils, chambers of commerce or the regional offices of the Chief
Controller of Imports and Exports are the responsible bodies for issuing the
certificate of origin.
In India, the main legislation concerning foreign trade is the Foreign Trade
(Development and Regulation) Act, 1992. The Act provides for the
development and regulation of foreign trade by facilitating imports into, and
augmenting exports from, India and for matters connected therewith or incidental
thereto. As per the provisions of the Act, the Government :- (i) may make
provisions for facilitating and controlling foreign trade; (ii) may prohibit, restrict
and regulate exports and imports, in all or specified cases as well as subject them
to exemptions; (iii) is authorised to formulate and announce an export and import
policy and also amend the same from time to time, by notification in the Official
Gazette; (iv) is also authorised to appoint a 'Director General of Foreign Trade' for
the purpose of the Act, including formulation and implementation of the export-
Accordingly, the Ministry of Commerce and Industry has been set up as
the most important organ concerned with the promotion and regulation of foreign
trade in India. In exercise of the powers conferred by the Act, the Ministry notifies
a trade policy on a regular basis with certain underlined objectives. The earlier
trade policies were based on the objectives of self-reliance and self-sufficiency.
While, the later policies were driven by factors like export led growth, improving
efficiency and competitiveness of the Indian industries, etc.
With economic reforms, globalisation of the Indian economy has been the
guiding factor in formulating the trade policies. The reform measures introduced in
the subsequent policies have focused on liberalization, openness and transparency.
They have provided an export friendly environment by simplifying the procedures
for trade facilitation. The announcement of a new Foreign Trade Policy for a five
year period of 2004-09, replacing the hitherto nomenclature of EXIM Policy by
Foreign Trade Policy (FTP) is another step in this direction. It takes an integrated
view of the overall development of India’s foreign trade and provides a roadmap
for the development of this sector. A vigorous export-led growth strategy of
doubling India’s share in global merchandise trade (in the next five years), with a
focus on the sectors having prospects for export expansion and potential for
employment generation, constitute the main plank of the policy. All such measures
are expected to enhance India's international competitiveness and aid in further
increasing the acceptability of Indian exports. The policy sets out the core
objectives, identifies key strategies, spells out focus initiatives, outlines export
incentives, and also addresses issues concerning institutional support including
simplification of procedures relating to export activities.
The key strategies for achieving its objectives include:-
Unshackling of controls and creating an atmosphere of trust and transparency;
Simplifying procedures and bringing down transaction costs;
Neutralizing incidence of all levies on inputs used in export products;
Facilitating development of India as a global hub for manufacturing, trading and
Identifying and nurturing special focus areas to generate additional employment
opportunities, particularly in semi-urban and rural areas;
Facilitating technological and infrastructural upgradation of the Indian economy,
especially through import of capital goods and equipment;
Avoiding inverted duty structure and ensuring that domestic sectors are not
disadvantaged in trade agreements;
Upgrading the infrastructure network related to the entire foreign trade chain to
Revitalizing the Board of Trade by redefining its role and inducting into it
experts on trade policy; and
Activating Indian Embassies as key players in the export strategy.
The FTP has identified certain thrust sectors having prospects for export expansion
and potential for employment generation. These thrust sectors include: (i)
Agriculture; (ii) Handlooms & Handicrafts; (iii) Gems & Jewellery; and (iv) Leather
& Footwear. Accordingly, specific policy initiative for these sectors have been
For the agriculture sector :-
A new scheme called "Vishesh Krishi Upaj Yojana (Special Agricultural
Produce Scheme)" to boost exports of fruits, vegetables, flowers, minor
forest produce and their value added products has been introduced. Under
the scheme, exports of these products qualify for duty free credit
entitlement (5 per cent of f.o.b value of exports) for importing inputs and
Duty free import of capital goods under Export Promotion Capital Goods
(EPCG) scheme, permitting the installation of capital goods imported under
EPCG for agriculture anywhere in the Agri- Export Zone (AEZ);
Utilizing funds from the 'Assistance to States for Infrastructure
Development of Exports (ASIDE) scheme' for development of AEZs;
Liberalization of import of seeds, bulbs, tubers and planting material, and
liberalization of the export of plant portions, derivatives and extracts to
promote export of medicinal plants and herbal products.
For the handlooms and handicraft sector :-
• Enhancing to 5 per cent of f.o.b value of exports duty free import of
trimmings and embellishments for handlooms and handicrafts;
• Exemption of samples from countervailing duty (CVD);
• Authorizing Handicraft Export Promotion Council to import trimmings,
embellishments and samples for small manufacturers; and
• Establishment of a new Handicraft Special Economic Zone.
For the gems and jewellery sector :-
• Permission for duty free import of consumables for metals other than gold
and platinum up to 2 per cent of f.o.b value of exports;
• Duty free re-import entitlement for rejected jewellery allowed up to 2 per
cent of f.o.b value of exports;
• Increase in duty free import of commercial samples of jewellery to Rs.1
• Permission to import of gold of 18 carat and above under the replenishment
For the leather and footwear sector, the specific policy
initiatives are mainly in the form of reduction in the incidence
of customs duties on the inputs and plants and machinery.
Increase in the limit for duty free entitlements of import trimmings,
embellishments and footwear components for leather industry to 3 per cent
of f.o.b value of exports and that for duty free import of specified items for
leather sector to 5 per cent of f.o.b value of exports;
Import of machinery and equipment for Effluent Treatment Plants for
leather industry exempted from customs duty; and
Re-export of unsuitable imported materials (such as raw hides and skin and
wet blue leathers) has been permitted.
 Expanding Trade Opportunities and Improving Trade
Capacity of Producers and Rural Industries
Regional growth, rapidly expanding urban areas, regional trade agreements,
and the advent of World Trade Organization accords have meant that agricultural
producers and entrepreneurs—both men and women—face greater domestic
competition for agricultural products. It also means that there are significantly
expanded opportunities for participating in markets, whether local, national,
regional, or international. However, governments must create enabling policies and
institutional environments that facilitate producers’ access to these markets. And
to achieve increased levels of income, agricultural producers and entrepreneurs
must have the capacity to respond to such opportunities.
To enable producers and rural industries to better connect themselves to
agricultural trade opportunities,
support the development of sound policy environments that enable open
markets, private sector investment, and gender-equitable access to factors
of production, products, and income.
promote effective institutions and governance to enable female and male
producers to acquire, protect, and use the assets they need to take
advantage of emergent market and trade opportunities.
expand rural finance to increase the capacity of producers and producers’
groups to invest in production and processing operations and over-come
gender-based constraints to access.
strengthen producers’ groups and other rural organizations to enable them to
gain market mastery and reduce transaction costs; gain access to and
effectively use information on domestic, regional, and international markets;
and facilitate technology transfer.
enhance access to production, storage, and processing technologies to
enable male and female producers to provide products demanded by the
market in the right qualities and at competitive prices focus on more
nutritious foods (natural and fortified) that can be marketed as higher-value
and benefit producers and consumers.
. Improving the Social, Economic, and Environmental
Sustainability of Agriculture
Because biodiversity and natural resources are central to the livelihoods of
rural populations throughout the developing world, they cannot be separated from
the broader context of social, economic, and development challenges. Sound
environmental and natural resource management is fundamental to the
sustainability of agricultural production systems and economic benefit streams, and
offers possibilities of increasing productivity in the future.
For rural populations, access to and control over natural resources are major
governance issues. Improved governance and economic frameworks maximize the
ability of rural populations to benefit from their resource base, while creating a
powerful force for preserving land, water, and biodiversity over the long term.
Sound environmental managementis key to reducing vulnerability of rural
communitiesinan evolving global marketplace of increasing competitiveness in
agricultural and natural resource-based enterprises.
To ensure positive benefits to local incomes and the ecosystem, We should
1. restore the health of land, water, and forestry resources and develop
sustainable and renewable energy sources to regain productivity of degraded
lands; maintain viable ecosystems; reduce vulnerability to disasters; and
ensure adequate quality and quantity of resources for domestic, industrial,
agricultural, and environmental needs.
2. support the development and application of environmental assessment
methodologies that enable communities and implementing partners to better
assess environmental risks and damage due to natural and conflict-related
3. strengthen local capacity for integrated management of agricultural and
natural landscapes to maximize benefits to individual women and men, while
valuing public goods.
4. improve analytical and economic frameworks linking agriculture and natural
resource investments to achieve the dual goals of resource protection and
economic growth, while enhancing competitiveness in global economic
5. protect natural ecosystems by finding organisms endangered in nature and
securing them in seed banks and botanical gardens to improve biodiversity
. Mobilizing Science and Technology and Fostering Capacity
Crop and livestock research has led to the production of more food at lower
costs. Doubling and tripling yields mean that wheat, rice, and maize are now
cheaper for consumers by half—in real terms—than 40 years ago. Overall, the
productivity growth in staple food crops has made a critical contribution to
agricultural development and reductions in poverty and hunger.8 Continued
research and development are needed to sustain these achievements.
Growth in staple food crops alone does not ensure agricultural development
and food security. Access to nutritious food is also important, as is the need to
improve the availability of protein and micronutrients in staple foods and
vegetables. Another way to address the nutritional aspects of food security is
through access to a variety of foods. Animal-source proteins and micronutrients
can have long-term impact on productivity and economic development; these
nutrients have been shown to have a strong and positive impact on the cognitive,
physical, and behavioral development of children.9 Advances in science and
technology that enhance protein content and increase bioavailability of
micronutrients will contribute positively to the health status of poor consumers,
especially girls and boys particular culture, and ensure that investments in science
and technology yield maximum benefits
• support technology development and application, addressing the different needs
and constraints of men and women throughout the agricultural sector, to raise
agricultural productivity for increased economic competitiveness; stabilize and
enhance food, feed, and fiber production in developing countries; increase
protein con-tent and bioavailability of micronutrients in staple foods and
vegetables; and reduce environmental degradation and pollution.
• expand public and private sector partnerships and networks to facilitate
collaboration on applied research activities by networks of specialists on crops,
including staple foods and vegetables; natural resource management; and other
aspects of the food, feed, and fiber system.
• foster science and technology innovation capacity and national innovation
systems to meet the challenges of today’s agricultural environment, including
volatile climatic and market changes, evolving grades and standards, infectious
disease, political instability, and the special needs of women.
.Strengthening Agricultural Training and Education Outreach,
and Adaptive Research
Major advances in agricultural science and technology over the past decade
have had uneven impacts on people’s productivity and livelihoods. Some farmers
perceive some new technologies as too risky, either in production or financial
terms. Farmers’ use of other technologies is limited by lack of access to necessary
inputs (such as fertilizer and pesticides) or markets. Still othe potentially beneficial
technologies are never adopted because farmers never hear about them.
Over the past 20 years, new information and communication technologies
have affected opportunities for productive enterprises as well as trade and
commerce. Such technologies have enabled farmers to tap into new markets and
acquire information about new production approaches. The ability to access and
manage information is fast becoming a fundamental requirement for rural
producers to participate effectively in an increasingly global food, feed, and fiber
Education and training programs that reach out to women and men who are
rural producers and others in related processing and marketing chains can benefit
from new information and communication technologies.
■ support education and training tailored to reach women and girls as well as long-
term training and basic education curricula in the agricultural sciences and related
subjects to strengthen the human and institutional capacity of developing countries
■ develop and extend innovative rural information and communication technology
systems that address the differential abilities and needs of men and women to
improve access by dispersed farmers and agribusiness entrepreneurs to
information across an array ofagricultural disciplines and uses.
■ improve problem-based, site-specific learning approaches to solve problems—
local, organiza- tional, and site-specific—by using adaptive research and getting
“on-the-shelf ” solutions into the field
What to Export
Commodity Composition of Exports Over the past decade, exports (measured in
rupees) have grown by 21.7% on an average. Some commodities have enjoyed
much faster export growth than others. Given below is the export
performance, in Million US$, of some commodities during 1994-95 and its
change in percentage terms over levels in 1993-94.
Composition of Indian Export
1994-95 1995-96 1995-96 1996-97
Agriculture& allied 16.0 19.2 16.1 20.6
1. Tea 1.2 1.1 1.1 1.0
2. Coffee 1.3 1.4 1.6 1.6